Document:

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                                  EXHIBIT 10.9

                              INVESTMENT AGREEMENT

                                     BETWEEN

                           THEHEALTHCHANNEL.COM, INC.

                                       AND

                           SWARTZ EQUITY PARTNERS, LLC

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                              THEHEALTHCHANNEL.COM

                              INVESTMENT AGREEMENT

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

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

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

        SEE ADDITIONAL LEGENDS AT SECTIONS 4.7.

               THIS INVESTMENT AGREEMENT (this "Agreement" or "Investment
Agreement") is made as of the 15th day of August, 2000, by and between
thehealthchannel.com, a corporation duly organized and existing under the laws
of the State of Delaware (the "Company"), and the undersigned Investor executing
this Agreement ("Investor").

                                    RECITALS:

        WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue to the Investor, and the
Investor shall purchase from the Company, from time to time as provided herein,
shares of the Company's Common Stock, as part of an offering of Common Stock by
the Company to Investor, for a maximum aggregate offering amount of Thirty
Million Dollars ($30,000,000) (the "Maximum Offering Amount"); and

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

                                     TERMS:

        NOW, THEREFORE, the parties hereto agree as follows:

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

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

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

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

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

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

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

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

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

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

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

        "Agreement" shall mean this Investment Agreement.

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

        "Bring Down Cold Comfort Letters" shall have the meaning set forth in
Section 2.3.6(b).

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

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

        "Cap Amount" shall have the meaning set forth in Section 2.3.10.

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

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

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

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

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then such dispute shall be resolved by an investment banking firm mutually
acceptable to the Company and the Investor in this offering and any fees and
costs associated therewith shall be paid by the Company.

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

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

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

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

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

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

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

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

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

        "Conditions to Investor's Obligations" shall have the meaning as set
forth in Section 2.2.2.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

        "Investment Agreement" shall mean this Investment Agreement.

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

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

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

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

        "Late Payment Amount" shall have the meaning set forth in Section 2.3.8.

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

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

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

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

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

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

        "Material Facts" shall have the meaning set forth in Section 2.3.6(a).

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        "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 2.3.10.

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

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

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

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

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

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

        "Payment Due Date" shall have the meaning set forth in Section 2.3.8.

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

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

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

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

        "Purchase" shall have the meaning set forth in Section 2.3.7.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

        "SEC" shall mean the Securities and Exchange Commission.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

        "Truncated Put Share Amount" shall have the meaning set forth in Section
2.3.11(b).

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

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

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

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

        "Warrants" shall mean Purchase Warrants and Commitment Warrants.

        2.     PURCHASE AND SALE OF COMMON STOCK.

               2.1  OFFER TO SUBSCRIBE.

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

               2.2    INVESTMENT COMMITMENT.

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

                      2.2.2  CONDITIONS TO INVESTOR'S OBLIGATIONS.  As a
prerequisite to the Investment Commitment Closing and the Investor's obligations
hereunder, all of the following (the "Conditions to Investor's Obligations")
shall have been satisfied prior to or concurrently with the Company's execution
and delivery of this Agreement:

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

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

               (c)    [Intentionally Left Blank].

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

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

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               2.3  PUTS OF COMMON SHARES TO THE INVESTOR.

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

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

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

        Notwithstanding the above, if, at the time of delivery of an Advance Put
Notice, more than two (2) Calendar Months have passed since the date of the
previous Put Closing, such Advance Put Notice shall provide at least twenty (20)
Business Days notice of the intended Put Date, unless waived in writing by the
Investor. In order to effect delivery of the Advance Put Notice, the Company
shall (i) send the Advance Put Notice by facsimile on such date so that such
notice is received by the Investor by 6:00 p.m., New York, NY time, and (ii)
surrender such notice on such date to a courier for overnight delivery to the
Investor (or two (2) day delivery in the case of an Investor residing outside of
the U.S.). Upon receipt by the Investor of a facsimile copy of the Advance Put
Notice, the Investor shall, within two (2) Business Days, send, via facsimile, a
confirmation of receipt (the "Advance Put Notice Confirmation," the form of
which is attached hereto as EXHIBIT F) of the Advance Put Notice to the Company
specifying that the Advance Put Notice has been received and affirming the
intended Put Date and the Intended Put Share Amount.

                             (b) PUT SHARE AMOUNT. The "Put Share Amount" is the
number of shares of Common Stock that the Investor shall be obligated to
purchase in a given Put, and shall equal the lesser of (i) the Intended Put
Share Amount, and (ii) the Individual Put Limit. The "Individual Put Limit"
shall equal the lesser of (i) 1,500,000 shares, (ii) 15% of the sum of the
aggregate daily reported Trading Volumes in the outstanding Common Stock on the
Company's Principal Market, excluding any block trades of 20,000 or more shares
of Common Stock, for all Evaluation Days (as defined below) in the Pricing
Period, (iii) the number of Put Shares which, when multiplied by their
respective Put Share Prices, equals the Maximum Put Dollar Amount, and (iv) the
9.9% Limitation, but in no event shall the Individual Put Limit exceed 15% of
the sum of the aggregate daily reported Trading Volumes in the outstanding
Common Stock on the Company's Principal Market, excluding any block trades of
20,000 or more shares of Common Stock, for the twenty (20) Business Days
immediately preceding the Put Date (this limitation, together with the
limitation in (i) immediately above, are collectively referred to herein

<PAGE>

as the "Volume Limitations"). Company agrees not to trade Common Stock or
arrange for Common Stock to be traded for the purpose of artificially
increasing the Volume Limitations.

        For purposes of this Agreement:

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

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

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

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

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

                             (e) DELIVERY OF REQUIRED PUT DOCUMENTS. On or
before the Put Date for such Put, the Company shall deliver the Required Put
Documents (as defined in Section 2.3.5 below) to the Investor (or to an agent of
Investor, if Investor so directs). Unless otherwise specified by the Investor,
the Put Shares of Common Stock shall be transmitted electronically pursuant to
such electronic delivery system as the Investor shall request; otherwise
delivery shall be by physical certificates. If the Company has not delivered all
of the Required Put Documents to the Investor on or before the Put Date, the Put
shall be automatically cancelled, unless the Investor agrees to delay the Put
Date by up to three (3) Business Days, in which case the Pricing Period begins
on the Business Day following such new Put Date. If the Company has not
delivered all of the Required Put Documents to the Investor on or before the Put
Date (or new Put Date, if applicable), and the Investor has not agreed in
writing to delay the Put Date, the Put is automatically canceled (an
"Impermissible Put Cancellation") and, unless the Put was otherwise canceled in
accordance with the terms of Section 2.3.11, the Company shall pay the Investor
$5,000 for its reasonable due diligence expenses incurred in preparation for the
canceled Put and the Company may deliver an Advance Put Notice for the
subsequent Put no sooner than ten (10) Business Days after the date that such
Put was canceled, unless otherwise agreed by the Investor.

                             (f) LIMITATION ON INVESTOR'S OBLIGATION TO PURCHASE
SHARES. Notwithstanding anything to the contrary in this Agreement, in no event
shall the Investor be required to purchase, and an Intended Put Share Amount may
not include, an amount of Put Shares, which when added to the number of Put
Shares acquired by the Investor pursuant to this Agreement during the 31 days
preceding the Put Date with respect to which this determination of the permitted
Intended Put Share Amount is being made, would exceed 9.99% of the number of
shares of Common Stock outstanding (on a fully diluted basis, to the extent that
inclusion of unissued shares is mandated by Section 13(d) of the Exchange Act)
on the Put Date for such Pricing Period, as determined in accordance with
Section 13(d) of the Exchange Act (the "Section 13(d) Outstanding Share
Amount"). Each Put

<PAGE>

Notice shall include a representation of the Company as to the Section 13(d)
Outstanding Share Amount on the related Put Date. In the event that the
Section 13(d) Outstanding Share Amount is different on any date during a
Pricing Period than on the Put Date associated with such Pricing Period, then
the number of shares of Common Stock outstanding on such date during such
Pricing Period shall govern for purposes of determining whether the Investor,
when aggregating all purchases of Shares made pursuant to this Agreement in
the 31 calendar days preceding such date, would have acquired more than 9.99%
of the Section 13(d) Outstanding Share Amount. The limitation set forth in
this Section 2.3.1(f) is referred to as the "9.9% Limitation."

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

                             (a) the Company shall not exercise a Put or any Put
thereafter if, at any time, either the Company or any director or executive
officer of the Company has engaged in a transaction or conduct related to the
Company that has resulted in (i) a Securities and Exchange Commission
enforcement action, or (ii) a civil judgment or criminal conviction for fraud or
misrepresentation, or for any other offense that, if prosecuted criminally,
would constitute a felony under applicable law;

                             (b) the Company shall not exercise a Put or any Put
thereafter, on any date after a cumulative time period or series of time
periods, including both Ineffective Periods and Delisting Events, that lasts for
an aggregate of four (4) months;

                             (c) the Company shall not exercise a Put or any Put
thereafter if at any time the Company has filed for and/or is subject to any
bankruptcy, insolvency, reorganization or liquidation proceedings or other
proceedings for relief under any bankruptcy law or any law for the relief of
debtors instituted by or against the Company or any subsidiary of the Company;

                             (d) the Company shall not exercise a Put after the
sooner of (i) the date that is three (3) years after the Effective Date, or (ii)
the Put Closing Date on which the aggregate of the Put Dollar Amounts for all
Puts equal the Maximum Offering Amount; and

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

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

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

                             (a) notwithstanding the amount of any Put, the
Investor shall not be obligated to purchase any additional Put Shares once the
aggregate Put Dollar Amount paid by Investor equals the Maximum Offering Amount;

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

<PAGE>

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

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

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

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

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

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

                             (c) the representations and warranties of the
Company are true and correct in all material respects as if made on such date
and the conditions to Investor's obligations set forth in this Section 2.3.4 are
satisfied as of such Closing, and the Company shall deliver a certificate,
signed by an officer of the Company, to such effect to the Investor;

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

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

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

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

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

<PAGE>

                             (b) the following documents: Put Opinion of
Counsel, Officer's Certificate, Put Notice, Registration Opinion, and any report
or disclosure required under Section 2.3.6 or Section 2.5;

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

                      2.3.6  ACCOUNTANT'S LETTER AND REGISTRATION OPINION.

                             (a)  The Company shall have caused to be delivered
to the Investor, (i) whenever required by Section 2.3.6(b) or by Section 2.5.3,
and (ii) on the date that is three (3) Business Days prior to each Put Date (the
"Registration Opinion Deadline"), an opinion of the Company's independent
counsel, in substantially the form of EXHIBIT R (the "Registration Opinion"),
addressed to the Investor stating, inter alia, that no facts ("Material Facts")
have come to such counsel's attention that have caused it to believe that the
Registration Statement is subject to an Ineffective Period or to believe that
the Registration Statement, any Supplemental Registration Statement (as each may
be amended, if applicable), and any related prospectuses, contain an untrue
statement of material fact or omits a material fact required to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. If a Registration Opinion cannot be delivered by the
Company's independent counsel to the Investor on the Registration Opinion
Deadline due to the existence of Material Facts or an Ineffective Period, the
Company shall promptly notify the Investor and as promptly as possible amend
each of the Registration Statement and any Supplemental Registration Statements,
as applicable, and any related prospectus or cause such Ineffective Period to
terminate, as the case may be, and deliver such Registration Opinion and updated
prospectus as soon as possible thereafter. If at any time after a Put Notice
shall have been delivered to Investor but before the related Pricing Period End
Date, the Company acquires knowledge of such Material Facts or any Ineffective
Period occurs, the Company shall promptly notify the Investor and shall deliver
a Put Cancellation Notice to the Investor pursuant to Section 2.3.11 by
facsimile and overnight courier by the end of that Business Day.

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

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

                      2.3.7  INVESTOR'S OBLIGATION AND RIGHT TO PURCHASE SHARES.
Subject to the conditions set forth in this Agreement, following the Investor's
receipt of a validly delivered Put Notice, the Investor shall be required to
purchase (each a "Purchase") from the Company a number of Put Shares equal to
the Put Share Amount, in the manner described below.

                      2.3.8  MECHANICS OF PUT CLOSING. Each of the Company and
the Investor shall deliver all documents, instruments and writings required to
be delivered by either of them pursuant to this Agreement at or prior to each
Closing. Subject to such delivery and the satisfaction of the conditions set
forth in Sections 2.3.4 and 2.3.5, the closing of the purchase by the Investor
of Shares shall occur by 5:00 PM, New York City Time, on the date which is five
(5) Business Days following the applicable Pricing Period End Date (the "Payment
Due Date") at the offices of Investor. On each or before each Payment Due Date,
the Investor shall deliver to the Company, in the manner specified in Section 8
below, the Put Dollar Amount to be paid for such Put Shares, determined as
aforesaid. The closing (each a "Put Closing") for each Put shall occur on the
date that both (i) the Company has

<PAGE>

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 In addition to any other remedies the Company
may have, in the event that the Investor fails to make payment for any shares
Put to it by the Company under this Agreement within 30 days of the date that
the Company has notified the Investor, in writing, that such payment is past
due, and the Company has complied with this Agreement in all material respects,
the Company may terminate the unexercised portion of the Commitment Warrant.

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

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

                      2.3.11  PUT CANCELLATION.

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

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

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

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

                      2.3.12  INVESTMENT AGREEMENT CANCELLATION.   The Company
may terminate (a "Company Termination") its right to initiate future Puts by
providing written notice ("Termination Notice") to the Investor, by facsimile
and overnight courier, at any time other than during an Extended Put Period,
provided that such

<PAGE>

termination shall have no effect on the parties' other rights
and obligations under this Agreement, the Registration Rights Agreement or the
Warrants. Notwithstanding the above, any cancellation occurring during an
Extended Put Period is governed by Section 2.3.11.

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

               2.4  WARRANTS.

                      2.4.1  COMMITMENT WARRANTS. In partial consideration
hereof, following the execution of the Letter of Agreement dated on or about
June 19, 2000 between the Company and the Investor, the Company issued and
delivered to Investor or its designated assignees, warrants (the "Commitment
Warrants") in the form attached hereto as EXHIBIT U, or such other form as
agreed upon by the parties, to purchase 3,450,000 shares of Common Stock. Each
Commitment Warrant shall be immediately exercisable in accordance with its
terms, and shall have a term beginning on the date of issuance and ending on
date that is five (5) years thereafter. The Warrant Shares shall be registered
for resale pursuant to the Registration Rights Agreement. The Investment
Commitment Opinion of Counsel shall cover the issuance of the Commitment Warrant
and the issuance of the common stock upon exercise of the Commitment Warrant.

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

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

               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

<PAGE>

advisors and representatives prohibiting them from trading in Common Stock
during such period of time as they are in possession of nonpublic
information) in form reasonably satisfactory to the Company and the Investor.

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

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

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

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

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

               2.6 COMMITMENT PAYMENTS.

        On the last Business Day of each six (6) Calendar Month period following
the Effective Date (each such period a "Commitment Evaluation Period"), if the
Company has not Put at least $1,000,000 in aggregate Put Dollar Amount during
that Commitment Evaluation Period, the Company, in consideration of Investor's
commitment costs, including, but not limited to, due diligence expenses, shall
pay to the Investor an amount (the "Semi-Annual Non-

<PAGE>

Usage Fee") equal to the difference of (i) $100,000, minus (ii) 10% of the
aggregate Put Dollar Amount of the Put Shares put to Investor during that
Commitment Evaluation Period. In the event that the Company delivers a
Termination Notice to the Investor or an Automatic Termination occurs, the
Company shall pay to the Investor (the "Termination Fee") the greater of (i)
the Semi-Annual Non-Usage Fee for the applicable Commitment Evaluation
Period, or (ii) the difference of (x) $200,000, minus (y) 10% of the
aggregate Put Dollar Amount of the Put Shares put to Investor during all Puts
to date, and the Company shall not be required to pay the Semi-Annual
Non-Usage Fee thereafter.

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

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

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

               3.2  INVESTMENT EXPERIENCE; ACCESS TO INFORMATION; INDEPENDENT
INVESTIGATION.

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

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

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

                      3.2.4  DISCLOSURE DOCUMENTS.  Investor, in making
Investor's investment decision to subscribe for the Investment Agreement
hereunder, represents that (a) Investor has received and had an opportunity to
review (i) the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1999, (ii) the Company's quarterly report on Form 10-QSB for the
quarters ended March 31, 2000, (iii) the Risk Factors, attached as EXHIBIT J,
(the "Risk Factors") (iv) the Capitalization Schedule, attached as EXHIBIT K,
(the "Capitalization Schedule") and (v) the Use of Proceeds Schedule, attached
as EXHIBIT L, (the "Use of Proceeds Schedule"); (b) Investor has read, reviewed,
and relied solely on the documents described in (a) above, the Company's
representations and warranties and other information in this Agreement,
including the exhibits, documents prepared by the Company which have been
specifically provided to Investor in connection with this Offering (the
documents described in this Section 3.2.4 (a) and (b) are collectively referred
to as the "Disclosure Documents"), and an independent investigation made by
Investor and Investor's representatives, if any; (c) Investor has, prior to the
date of this Agreement, been given an opportunity to review material contracts
and documents of the Company which have been filed as exhibits to the Company's
filings under the Act and the Exchange Act and has had an opportunity to ask
questions of and receive answers from the Company's officers and directors; and
(d) is not relying on any oral representation of the Company or any other
person, nor any written representation or assurance from the Company other than
those contained in the Disclosure Documents or incorporated herein or therein.
The foregoing, however, does not limit or modify Investor's right to rely upon
covenants, representations and warranties of the Company in

<PAGE>
Sections 5 and 6 of this Agreement. Investor acknowledges and agrees that the
Company has no responsibility for, does not ratify, and is under no
responsibility whatsoever to comment upon or correct any reports, analyses or
other comments made about the Company by any third parties, including, but
not limited to, analysts' research reports or comments (collectively, "Third
Party Reports"), and Investor has not relied upon any Third Party Reports in
making the decision to invest.

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

               3.3  EXEMPT OFFERING UNDER REGULATION D.

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

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

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

                             (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
<PAGE>

Common Stock for any minimum or other specific term and reserves the right to
dispose of the Common Stock at any time in accordance with federal and state
securities laws applicable to such disposition.

               3.4  DUE AUTHORIZATION.

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

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

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

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

        4.     ACKNOWLEDGMENTS.     Investor is aware that:

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

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

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

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

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

               4.6 EXEMPT TRANSACTION. Investor understands that the Securities
are being offered and sold in reliance on specific exemptions from the
registration requirements of federal and state law and that the

<PAGE>

representations, warranties, agreements, acknowledgments and understandings
set forth herein are being relied upon by the Company in determining the
applicability of such exemptions and the suitability of Investor to acquire
such Securities.

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

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

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

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

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

<PAGE>

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

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

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

               5.6 REPORTING COMPANY. The Company is subject to the reporting
requirements of the Exchange Act, but does not have 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 Company shall use its reasonable
best efforts to cause its Common Stock to become duly listed or approved for
quotation on the O.T.C. Bulletin Board as soon as practicable after the date
hereof, and in any event prior to initiating any Put. The Company has filed all
reports required under the Exchange Act. The Company has not furnished to the
Investor any material nonpublic information concerning the Company.

               5.7 CAPITALIZATION. The capitalization of the Company as of the
date hereof, is, and the capitalization as of the Closing, subject to exercise
of any outstanding warrants and/or exercise of any outstanding stock options,
after taking into account the offering of the Securities contemplated by this
Agreement and all other share issuances occurring prior to this Offering, will
be, as set forth in the Capitalization Schedule as set forth in EXHIBIT K. There
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities. Except as disclosed in
the Capitalization Schedule, as of the date of this Agreement, (i) there are no
outstanding options, warrants, scrip, rights to subscribe for, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exercisable or exchangeable for, any shares of capital stock
of the Company or any of its

<PAGE>

subsidiaries, or arrangements by which the Company or any of its subsidiaries
is or may become bound to issue additional shares of capital stock of the
Company or any of its subsidiaries, and (ii) there are no agreements or
arrangements under which the Company or any of its subsidiaries is obligated
to register the sale of any of its or their securities under the Act (except
the Registration Rights Agreement).

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

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

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

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

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

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

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

               5.15 NO INTEGRATED OFFERING. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales of any of the Company's securities or
solicited any offers to buy any security under circumstances that would prevent
the parties hereto from consummating the transactions contemplated hereby
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

<PAGE>

the SEC. The Company has not engaged in any form of general solicitation or
advertising in connection with the offering of the Common Stock or the
Warrants.

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

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

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

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

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

               5.21 APPLICATION OF TAKEOVER PROTECTIONS. The Company and its
board of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination or other
similar anti-takeover provision under Delaware law which is or could become
applicable to the Investor as a result of the transactions contemplated by this
Agreement, including, without limitation, the issuance of the Common Stock, any
exercise of the Warrants and ownership of the Common Shares and Warrant Shares.
The Company has not adopted and will not adopt any "poison pill" provision that
will be applicable to Investor as a result of transactions contemplated by this
Agreement.

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

<PAGE>

               5.23   MAJOR TRANSACTIONS.  There are no other Major Transactions
currently pending or contemplated by the Company.

               5.24 FINANCINGS. There are no other financings currently pending
or contemplated by the Company.

               5.25 SHAREHOLDER AUTHORIZATION. The Company shall, at its next
annual shareholder meeting following its listing on either the Nasdaq Small Cap
Market or the Nasdaq National Market, or at a special meeting to be held as soon
as practicable thereafter, use its best efforts to obtain approval of its
shareholders to (i) authorize the issuance of the full number of shares of
Common Stock which would be issuable under this Agreement and eliminate any
prohibitions under applicable law or the rules or regulations of any stock
exchange, interdealer quotation system or other self-regulatory organization
with jurisdiction over the Company or any of its securities with respect to the
Company's ability to issue shares of Common Stock in excess of the Cap Amount
(such approvals being the "20% Approval") and (ii) the increase in the number of
authorized shares of Common Stock of the Company (the "Share Authorization
Increase Approval") such that at least 50,000,000 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 50,000,000 shares of Common Stock for issuance under this
Agreement.

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

        6.     COVENANTS OF THE COMPANY

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

               6.2 CORPORATE EXISTENCE AND TAXES. The Company shall, until at
least the Termination Date, maintain its corporate existence in good standing
and, once it becomes a "Reporting Issuer" (defined as a Company which files
periodic reports under the Exchange Act), remain a Reporting Issuer (provided,
however, that the foregoing covenant shall not prevent the Company from entering
into any merger or corporate reorganization as long as the surviving entity in
such transaction, if not the Company, assumes the Company's obligations with
respect to the Common Stock and has Common Stock listed for trading on a stock
exchange or on Nasdaq and is a Reporting Issuer) and shall pay all its taxes
when due except for taxes which the Company disputes.

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

               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  RIGHTS OF FIRST REFUSAL.

                      6.5.1  CAPITAL RAISING LIMITATIONS.  During the period
from the date of this Agreement until the date that is one year after the
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 delivered a Termination Notice to the Investor, or (c) the date
of an Automatic Termination, 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

<PAGE>

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.

                      6.5.2  INVESTOR'S RIGHT OF FIRST REFUSAL. For any private
capital raising transactions of Equity Securities which close after the date
hereof and on or prior to the date that is one (1) year after the 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
delivered a Termination Notice to the Investor, or (c) the date of an Automatic
Termination, not including any warrants issued in conjunction with this
Investment Agreement, the Company agrees to deliver to Investor, at least ten
(10) days prior to the closing of such transaction, written notice describing
the proposed transaction, including the terms and conditions thereof, and
providing the Investor and its affiliates an option (the "Right of First
Refusal") during the ten (10) day period following delivery of such notice to
purchase the securities being offered in such transaction on the same terms as
contemplated by such transaction.

                      6.5.3  EXCEPTIONS TO CAPITAL RAISING LIMITATIONS AND
RIGHTS OF FIRST REFUSAL. Notwithstanding the above, neither the Capital Raising
Limitations nor the Rights of First Refusal shall apply to any transaction
involving issuances of securities in connection with a merger, consolidation,
acquisition or sale of assets, or in connection with any strategic partnership
or joint venture (the primary purpose of which is not to raise equity capital),
or in connection with the disposition or acquisition of a business, product or
license by the Company or exercise of options by employees, consultants or
directors, or a primary underwritten offering of the Company's Common Stock, or
the transactions set forth on Schedule 6.5.1. The Capital Raising Limitations
and Rights of First Refusal also shall not apply to (a) the issuance of
securities upon exercise or conversion of the Company's options, warrants or
other convertible securities outstanding as of the date hereof, (b) the grant of
additional options or warrants, or the issuance of additional securities, under
any Company stock option or restricted stock plan for the benefit of the
Company's employees, directors or consultants, or (c) the issuance of debt
securities, with no equity feature, incurred solely for working capital
purposes. If the Investor, at any time, is more than five (5) business days late
in paying any Put Dollar Amounts that are then due, the Investor shall not be
entitled to the benefits of Sections 6.5.1 and 6.5.2 above until the date that
the Investor has paid all Put Dollar Amounts that are then due.

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

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

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

<PAGE>

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

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

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

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

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

        7. INVESTOR COVENANT/MISCELLANEOUS.

               7.1 REPRESENTATIONS AND WARRANTIES SURVIVE THE CLOSING;
SEVERABILITY. Investor's and the Company's representations and warranties shall
survive the Investment Date and any Put Closing contemplated by this Agreement
notwithstanding any due diligence investigation made by or on behalf of the
party seeking to rely thereon. In the event that any provision of this Agreement
becomes or is declared by a court of competent

<PAGE>

jurisdiction to be illegal, unenforceable or void, or is altered by a term
required by the Securities Exchange Commission to be included in the
Registration Statement, this Agreement shall continue in full force and
effect without said provision; provided that if the removal of such provision
materially changes the economic benefit of this Agreement to the Investor,
this Agreement shall terminate.

               7.2 SUCCESSORS AND ASSIGNS. This Agreement shall not be
assignable without the Company's written consent. If assigned, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement. Investor may assign Investor's rights
hereunder, in connection with any private sale of the Common Stock of such
Investor, so long as, as a condition precedent to such transfer, the transferee
executes an acknowledgment agreeing to be bound by the applicable provisions of
this Agreement in a form acceptable to the Company and provides an original copy
of such acknowledgment to the Company.

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

               7.4 TITLES AND SUBTITLES; GENDER. The titles and subtitles used
in this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement. The use in this Agreement of a
masculine, feminine or neither pronoun shall be deemed to include a reference to
the others.

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

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

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

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

<PAGE>

        8.     SUBSCRIPTION AND WIRING INSTRUCTIONS; IRREVOCABILITY.

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

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

        9.     INDEMNIFICATION.

        In consideration of the Investor's execution and delivery of the
Investment Agreement, the Registration Rights Agreement and the Warrants (the
"Transaction Documents") and acquiring the Securities thereunder and in addition
to all of the Company's other obligations under the Transaction Documents, the
Company shall defend, protect, indemnify and hold harmless Investor and all of
its stockholders, officers, directors, employees and direct or indirect
investors and any of the foregoing person's agents, members, partners or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"Indemnitees") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorney's fees and disbursements (the "Indemnified Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
documents contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(c) any cause of action, suit or claim, derivative or otherwise, by any
stockholder of the Company based on a breach or alleged breach by the Company or
any of its officers or directors of their fiduciary or other obligations to the
stockholders of the Company, or (d) claims made by third parties against any of
the Indemnitees based on a violation of Section 5 of the Securities Act caused
by the integration of the private sale of common stock to the Investor and the
public offering pursuant to the Registration Statement.

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

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

                           [INTENTIONALLY LEFT BLANK]

<PAGE>

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

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

<PAGE>

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

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

Dated this 15th day of August, 2000.

SWARTZ PRIVATE EQUITY, LLC

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

SECURITY DELIVERY INSTRUCTIONS:
Swartz Private Equity, LLC
C/o Eric S. Swartz
200 Roswell Summit, Suite 285
1080 Holcomb Bridge Road
Roswell, GA 30076
Telephone: (770) 640-8130

THIS AGREEMENT IS ACCEPTED BY THE COMPANY IN THE AMOUNT OF THE MAXIMUM OFFERING
AMOUNT ON THE 15TH DAY OF AUGUST, 2000.

                                            THEHEALTHCHANNEL.COM

                                            By: /Donald Shea
                                               --------------------------------
                                                Donald Shea, CEO

                                    Address: Attn: Donald Shea, CEO
                                             260 Newport Center Drive, Suite 250
                                             Newport Beach, CA  92660
                                             Telephone   (949) 631-8317
                                             Facsimile    (949) 719-6055

<PAGE>

                               ADVANCE PUT NOTICE

THEHEALTHCHANNEL.COM (the "Company") hereby intends, subject to the Individual
Put Limit (as defined in the Investment Agreement), to elect to exercise a Put
to sell the number of shares of Common Stock of the Company specified below, to
_____________________________, the Investor, as of the Intended Put Date written
below, all pursuant to that certain Investment Agreement (the "Investment
Agreement") by and between the Company and Swartz Private Equity, LLC dated on
or about August 15, 2000.

                      Date of Advance Put Notice: ___________________

                      Intended Put Date: ____________________________

                      Intended Put Share Amount: ____________________

                      Company Designation Maximum Put Dollar Amount (Optional):
                      _______________________________________________

                      Company Designation Minimum Put Share Price (Optional):
                      _______________________________________________

                                            THEHEALTHCHANNEL.COM

                                            By:
                                               -------------------------------
                                                Donald Shea, CEO
                                   Address: Attn: Donald Shea, CEO
                                            260 Newport Center Drive, Suite 250
                                            Newport Beach, CA  92660
                                            Telephone   (949) 631-8317
                                            Facsimile    (949) 719-6055

EXHIBIT E

<PAGE>

                       CONFIRMATION OF ADVANCE PUT NOTICE

_________________________________, the Investor, hereby confirms receipt of
THEHEALTHCHANNEL.COM's (the "Company") Advance Put Notice on the Advance Put
Date written below, and its intention to elect to exercise a Put to sell shares
of common stock ("Intended Put Share Amount") of the Company to the Investor, as
of the intended Put Date written below, all pursuant to that certain Investment
Agreement (the "Investment Agreement") by and between the Company and Swartz
Private Equity, LLC dated on or about August 15, 2000.

                   Date of Confirmation: ____________________

                   Date of Advance Put Notice: _______________

                   Intended Put Date: ________________________

                   Intended Put Share Amount: ________________

                   Company Designation Maximum Put Dollar Amount (Optional):
                      _______________________________________________

                   Company Designation Minimum Put Share Price (Optional):
                      _______________________________________________

                         INVESTOR(S)

                                  ____________________________________
                                  Investor's Name

                                  By: ________________________________
                                         (Signature)
                   Address:       ____________________________________

                                  ____________________________________

                                  ____________________________________

                   Telephone No.: ___________________________________

                   Facsimile No.:  ___________________________________

EXHIBIT F

<PAGE>

                                   PUT NOTICE

THEHEALTHCHANNEL.COM (the "Company") hereby elects to exercise a Put to sell
shares of common stock ("Common Stock") of the Company to
_____________________________, the Investor, as of the Put Date, at the Put
Share Price and for the number of Put Shares written below, all pursuant to that
certain Investment Agreement (the "Investment Agreement") by and between the
Company and Swartz Private Equity, LLC dated on or about August 15, 2000.

                   Put Date:_________________

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

                   Company Designation Maximum Put Dollar Amount (Optional):
                                  ____________________________________

                   Company Designation Minimum Put Share Price (Optional):
                                  ____________________________________

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

                                            THEHEALTHCHANNEL.COM

                                            By:
                                                ______________________________
                                                Donald Shea, CEO

                                    Address: Attn: Donald Shea, CEO
                                             260 Newport Center Drive, Suite 250
                                             Newport Beach, CA  92660
                                             Telephone   (949) 631-8317

                                                        Facsimile (949) 719-6055

EXHIBIT G

<PAGE>

                           CONFIRMATION OF PUT NOTICE

_________________________________, the Investor, hereby confirms receipt of
thehealthchannel.com (the "Company") Put Notice and election to exercise a Put
to sell ___________________________ shares of common stock ("Common Stock") of
the Company to Investor, as of the Put Date, all pursuant to that certain
Investment Agreement (the "Investment Agreement") by and between the Company and
Swartz Private Equity, LLC dated on or about August 15, 2000.

                                   Date of this Confirmation: ________________

                                   Put Date:________________

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

                                   Volume Evaluation Period: _____ Business Days

                                   Pricing Period: _____ Business Days

                                   INVESTOR(S)

                                     ___________________________________
                                   Investor's Name

                                   By: _________________________________
                                          (Signature)
                             Address:       ___________________________________

                                            ___________________________________

                                            ___________________________________

                             Telephone No.: ___________________________________

                             Facsimile No.: ___________________________________

EXHIBIT H

<PAGE>

                             PUT CANCELLATION NOTICE

THEHEALTHCHANNEL.COM (the "Company") hereby cancels the Put specified below,
pursuant to that certain Investment Agreement (the "Investment Agreement") by
and between the Company and Swartz Private Equity, LLC dated on or about August
15, 2000, as of the close of trading on the date specified below (the
"Cancellation Date," which date must be on or after the date that this notice is
delivered to the Investor), provided that such cancellation shall not apply to
the number of shares of Common Stock equal to the Truncated Put Share Amount (as
defined in the Investment Agreement).

                                   Cancellation Date: _____________________

                                   Put Date of Put Being Canceled: __________

                                   Number of Shares Put on Put Date: _________

                                   Reason for Cancellation (check one):

                                          [   ] Material Facts, Ineffective
                                          Registration Period.

                                          [    ] Delisting Event

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

                                            THEHEALTHCHANNEL.COM

                                            By:
                                                ________________________________
                                                Donald Shea, CEO

                                    Address: Attn: Donald Shea, CEO
                                             260 Newport Center Drive, Suite 250
                                             Newport Beach, CA  92660
                                             Telephone   (949) 631-8317
                                             Facsimile    (949) 719-6055

<PAGE>

                      PUT CANCELLATION NOTICE CONFIRMATION

The undersigned Investor to that certain Investment Agreement (the "Investment
Agreement") by and between the thehealthchannel.com's, and Swartz Private
Equity, LLC dated on or about August 15, 2000, hereby confirms receipt of
thehealthchannel.com's (the "Company") Put Cancellation Notice, and confirms the
following:

                                   Date of this Confirmation: ________________

                                   Put Cancellation Date: ___________________

                                   INVESTOR(S)

                                            ____________________________________
                                   Investor's Name

                                   By: _________________________________
                                          (Signature)
                             Address:       ____________________________________

                                            ____________________________________

                                            ____________________________________

                             Telephone No.: ___________________________________

                             Facsimile No.: ____________________________________

                                     90
                                 EXHIBIT C
<PAGE>

                           THEHEALTHCHANNEL.COM, INC.

                        EXHIBIT C: SCHEDULE OF EXCEPTION

                                      91
                                  EXHIBIT C

<PAGE>

                             SCHEDULE OF EXCEPTIONS

        This SCHEDULE OF EXCEPTIONS is issued pursuant to Section 5:
Representations and Warranties of the Company, of that certain INVESTMENT
AGREEMENT (the "Agreement") entered into as of August 15, 2000 by and between
SWARTZ PRIVATE EQUITY, LLC and thehealthchannel.com, Inc. (the "Company"), with
headquarters located at 260 Newport Center Drive, Suite 250 Newport Beach,
California 92660 and the investor (the "Investor") set forth on the execution
page of said Agreement.

SECTION 5.2    CORPORATE CONDITION

        The Company has been named as a cross-defendant in a cross-complaint
filed by Michael Grandon in an action pending in the Superior Court State of
California for the County of San Francisco, Case No. 307364. This action was
initiated by Biologix International, Ltd. against Michael Grandon on October 22,
1999 alleging causes of action against Michael Grandon for: (1) temporary
restraining order and preliminary and permanent injunction; (2) breach of
fiduciary duty; (3) fraud by intentional misrepresentation; (4) conversion; (5)
possession of personal property; (6) declaratory relief; and (7) accounting. The
claims alleged by Biologix International, Ltd. relate to the actions and conduct
of Mr. Grandon while an officer and director of Biologix International, Ltd.
thehealthchannel.com is named as a cross-defendant in the cross-complaint of
Michael Grandon in a cause of action for breach of contract based upon an
alleged employment agreement between Michael Grandon and Biologix International
Ltd. Mr. Grandon claims that this alleged employment agreement is the
responsibility of thehealthchannel.com based upon thehealthchannel.com's
purchase of the internet related assets of Biologix International Ltd.
thehealthchannel.com was served with the cross-complaint on December 14, 1999.
Mr. Grandon seeks $400,000 in damages and options to purchase one million shares
of Biologix stock

        The Company has received correspondence from the SEC alleging that
certain actions taken by BioLogix, Inc. (the owner of thehealthchannel.com
website prior to its acquisition in July, 1999), Innovative Tracking Solutions,
Inc. ("IVTX") (the previous name of thehealthchannel.com) and
thehealthchannel.com, Inc. may have been in violation of applicable federal and
state securities laws. These allegations include the unavailability of an
exemption from registration for the exchange of shares by the BioLogix
shareholders. While the Company has provided correspondence to the SEC denying
these allegations and providing an explanation regarding why the Company
believes its actions were in compliance with applicable securities laws, the SEC
has indicated that it continues to disagree with the Company's position.

SECTION 5.2.1  TRANSACTIONS WITH AFFILIATES

        The Company has a Consulting Agreement with Jeffrey Berg, a director of
the Company, whereby, for a one time payment of 22,000 shares of common stock of
the Company, Mr. Berg assists the Company in locating, negotiating, and managing
its financing.

SECTION 5.5    COMPLIANCE WITH OTHER INSTRUMENTS

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                                  EXHIBIT C

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        The Bylaws of the Company require the Company to hold an annual meeting
        within five months after each fiscal year end. The annual meeting that
        should have been held by May 31, 2000 has been tentatively scheduled for
        October 12, 2000.

SECTION 5.7    CAPITALIZATION

The Company is obligated to register, along with the registration of the shares
contemplated by the Agreement, the following shares:

Investors in 506 Offering                         5,072,040 shares
(approximately 105 investors)

Laguna Pacific Partners, L.P.                     2,500,000 shares

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

Institute for Medical Studies                     1,200,000 shares

Investors in 506 Offering                         5,093,469  shares
(approximately 105 investors)

Les Dube and Irene Dube                           1,579,000 shares

                                      93
                                  EXHIBIT C

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                           THEHEALTHCHANNEL.COM, INC.

                             EXHIBIT J: RISK FACTORS

                                      94
                                  EXHIBIT J

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RISK FACTORS

     THE SECURITIES TO BE SOLD PURSUANT TO THIS INVESTMENT AGREEMENT ARE VERY
SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. THESE SECURITIES SHOULD BE
PURCHASED ONLY BY PEOPLE WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT.
BEFORE PURCHASING THESE SECURITIES, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING
RISK FACTORS AND THE OTHER INFORMATION CONCERNING THEHEALTHCHANNEL.COM AND ITS
BUSINESS CONTAINED IN THIS PROSPECTUS.

THEHEALTHCHANNEL.COM HAS      Thehealthchannel.com commenced implementation of
ONLY A LIMITED OPERATING      its current business plan during the fourth
HISTORY AND IS INCURRING      quarter of 1999. Prior to July 1999 the assets
LOSSES FROM ITS OPERATIONS.   currently comprising the internet site had been
                              owned and operated by BioLogix, Inc.  In April
                              1999, BioLogix launched the website deploying a
                              business plan relying upon the
                              advertising-based revenue model as many other
                              healthcare websites such as Healtheon and
                              DrKoop.com were doing. During the third quarter
                              of 1999, our management began to conclude that
                              an advertising-based revenue model could not
                              sustain profitable operations as the marketing
                              budgets necessary to attract advertisers
                              exceeded the revenues produced by these
                              advertisers. thehealthchannel.com management
                              believes this failure was because the marketing
                              budgets needed to attract advertisers exceeded
                              the revenues produced by these advertisers. As
                              a result, in July of 1999 thehealthchannel.com
                              commenced deployment of the new business plan
                              described in this prospectus. This new business
                              plan has virtually no operating history and its
                              financial success will be subject to all the
                              risks inherent in the establishment of a new
                              business enterprise. Additionally,
                              thehealthchannel.com has operated at a loss for
                              all of the periods for which financial
                              statements are presented in this prospectus.
                              The likelihood of success of
                              thehealthchannel.com must be considered in the
                              light of the problems, expenses, difficulties,
                              complications, and delays frequently
                              encountered in connection with the startup and
                              growth of a new business, and the competitive
                              environment in which thehealthchannel.com
                              operates. Unanticipated problems, expenses, and
                              delays are frequently encountered in
                              establishing a new business and marketing and
                              developing internet based products and
                              services. These include competition, the need
                              to develop customer support capabilities and
                              market expertise, setbacks in technology
                              development, market acceptance, sales, and
                              marketing. An additional risk factor associated
                              with this new business plan is that some of the
                              proposed strategies have never been implemented
                              and thus it would be speculative to predict
                              whether such strategies will ever be
                              successful. The failure of thehealthchannel.com
                              to meet any of these conditions will have a
                              materially adverse effect upon our business and
                              may force us to reduce or curtail operations.
                              We cannot assure you that the company will ever
                              operate profitably. See "Management's
                              Discussion and Analysis of Financial Condition
                              and Results of Operations," and "Our
                              Business-Competition."

FEDERAL INCOME TAX RISKS.     The transfer of Shares may have adverse federal
                              income tax consequences to the transferor. Each
                              prospective investor must obtain the advice of
                              the investor's own tax advisor concerning the
                              matters discussed in this Memorandum and the
                              effect of an investment in the Company on the
                              investor's personal tax situation.

THERE IS INTENSE              The online commerce industry is new, rapidly
COMPETITION IN THE ON-LINE    evolving and intensely competitive, which we
HEALTHCARE BUSINESS.          expect to intensify in the future.  Barriers to
                              entry are minimal, allowing current and new
                              competitors to launch new Web sites at a
                              relatively low cost. We compete with other
                              companies which have health care websites. These
                              competitors include WebMD, DrKoop.com,
                              InteliHealth, OnHealth, and YourHealth.com. These
                              competitors have longer operating histories,
                              larger customer bases, greater brand name
                              recognition and significantly greater financial,
                              marketing and other resources than we do. In
                              addition, other companies may be acquired by,
                              receive investments from or enter into other
                              commercial relationships with larger, well-

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                                  EXHIBIT J

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                              established and well-financed companies as
                              use of the Internet and other online services
                              increases. Our competitors may be able to devote
                              greater resources to marketing and promotional
                              campaigns, and devote substantially more resources
                              to Web site and systems development than we can.
                              We cannot assure you that we will be able to
                              compete successfully against current and future
                              competitors, and competitive pressures may have a
                              material adverse effect on our business,
                              prospects, financial condition and results of
                              operations. Further as a strategic response to
                              changes in the competitive environment, our
                              management may, from time to time, make certain
                              service or marketing decisions or acquisitions
                              that could have a material adverse effect on its
                              business, prospects, financial condition and
                              results of operations. New technologies and the
                              expansion of existing technologies may increase
                              the competitive pressures on thehealthchannel.com.
                              In addition, companies that control access to
                              transactions through network access or Web
                              browsers could promote our competitors or charge
                              us a substantial fee for inclusion. See "Business
                              of the Company-Competition."

ELECTRONIC COMMERCE           The secure transmission of confidential
SECURITY RISKS                information over public networks is critical to
                              electronic commerce.  The Company's systems and
                              operations are vulnerable to damage or
                              interruption from fire, flood, other natural
                              disasters, power loss, telecommunications
                              failure, break-ins and similar events. If a
                              person circumvents the Company's security
                              measures, he or she could jeopardize the
                              security of confidential information stored on
                              the Company's systems, misappropriate
                              proprietary information or cause interruptions
                              in the Company's operations, which could damage
                              the Company's reputation and expose the Company
                              to a risk of loss or liability.

THERE IS A RISK OF SYSTEM     The ability to provide timely information and
FAILURE FOR OUR WEBSITE.      continuous updates depends on the efficient and
                              uninterrupted operation of our computer and
                              communications hardware and software systems.
                              Similarly, the ability to track, measure, and
                              report the delivery of advertisements, data and
                              other information on our website depends on the
                              efficient and uninterrupted operation of our
                              system. These systems and operations are
                              vulnerable to damage or interruption from human
                              error, natural disasters, telecommunication
                              failures, break-ins, sabotage, computer
                              viruses, intentional acts of vandalism and
                              similar events. We have a disaster recovery
                              plan that generates a two week tape rotation
                              and full backup for all tape devices.
                              Historical data requiring long term storage
                              will be backed up by CD-Rom. Two copies will be
                              made for each archive created. Data on the
                              local area network is backed up to a tape drive
                              on a nightly basis. Additionally, we have a
                              state of the art network that is designed to
                              run 24 hours a day, seven days a week. Drives
                              in the servers can be switched without shutting
                              down the system. Backup generators are in place
                              that will enable the network to shut down
                              properly in the event of total power loss. The
                              network can run independently for up to ten
                              minutes of a brown out. Despite these
                              precautions, there is always the danger that
                              human error or sabotage could substantially
                              disrupt our web site which could cause a loss
                              of visitors to our site, damage to our systems,
                              and bad publicity.

WE MAY ACQUIRE BUSINESSES     We may acquire companies with operations that
THAT ARE SUBJECT TO           are subject to regulation by federal agencies and
GOVERNMENTAL REGULATIONS      various state, local and private consumer
                              protection and other regulatory authorities.
                              There can be no assurance that any such regulatory
                              requirements will not have a material adverse
                              effect on our business, financial condition or
                              results of operations.

TECHNOLOGICAL CHANGE          Although the Company is aware of no pending or
                              prospective technological change that would
                              adversely affect its business, new developments
                              in technology could have a material adverse
                              affect on the sale of some or all of the
                              Company's services or products or render its
                              services noncompetitive or obsolete, and there
                              can be no

                                      96
                                   EXHIBIT J

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                              assurance that the Company will be able to
                              develop or acquire new or improved services or
                              systems which may be required to remain
                              competitive.  The occurrence of such technogical
                              change could have a material adverse affect on
                              the Company.

OUR BUSINESS IS DEPENDENT     The Internet based information market is new and
ON THE CONTINUED GROWTH AND   rapidly evolving. Our business would be
USE OF THE INTERNET, AS       materially adversely affected if Internet usage
WELL AS THE EFFICIENT         does not continue to grow or grows slower than
OPERATION OF THE INTERNET.    currently projected. Internet usage may be
                              inhibited for a number of reasons, such as:

                                   - inadequate network infrastructure;
                                   - security concerns;
                                   - inconsistent quality of service; and
                                   - unavailability of cost-effective, high-
                                     speed access to the Internet.

                              Our website viewers depend on Internet service
                              providers, online service providers and other web
                              site operators for access to our website. Many of
                              these services have experienced significant
                              service outages in the past and could experience
                              service outages, delays, and other difficulties
                              due to system failures unrelated to our systems.
                              These occurrences could cause our viewers to
                              perceive the Internet in general or our web site
                              in particular as an unreliable medium and,
                              therefore, cause them to use other media or other
                              websites to obtain information. We also depend on
                              certain information providers to deliver
                              information and data feeds on a timely basis. Our
                              web site could experience disruptions or
                              interruptions in service due to the failure or
                              delay in the transmission or receipt of this
                              information, which could have a material adverse
                              effect on our business, results of operations, and
                              financial condition.

THERE ARE CURRENTLY LEGAL     Certain existing laws or regulations specifically
UNCERTAINTIES RELATING TO     regulate communications or commerce on the
THE INTERNET                  Internet. Further, laws and regulations that
                              address issues such as user privacy, pricing,
                              online content regulation, taxation and the
                              characteristics and quality of online products
                              and services are under consideration by
                              federal, state, local, and foreign governments
                              and agencies. Several telecommunications
                              companies have petitioned the Federal
                              Communications Commissioner to regulate
                              Internet service providers and online services
                              providers in a manner similar to the regulation
                              of long distance telephone carriers and to
                              impose access fees on such companies. Such
                              regulation, if imposed, could increase the cost
                              of transmitting data over the Internet.
                              Moreover, it may take years to determine the
                              extent to which existing laws relating to
                              issues such as intellectual property ownership
                              and infringement, libel, and personal privacy
                              are applicable to the Internet. The Federal
                              Trade Commission and government agencies in
                              certain states have been investigating certain
                              Internet companies regarding their use of
                              personal information. We could incur additional
                              expenses if any new regulations regarding the
                              use of personal information are introduced or
                              these agencies chose to investigate our privacy
                              practices. Any new laws or regulations relating
                              to the Internet, or certain application or
                              interpretation of existing laws, could decrease
                              the growth in the use of the Internet, decrease
                              the demand for the our web site or otherwise
                              materially adversely affect our business.

INTERNET SECURITY CONCERNS    Concern about the transmission of confidential
COULD HINDER INTERNET USE.    information over the Internet has been a
                              significant barrier to electronic commerce and
                              communications over the Internet. Any
                              well-publicized compromise of security could
                              deter more people from using the Internet or
                              from using it to conduct transactions that
                              involve the transmission of confidential
                              information, such as personal health related
                              information, signing up for a paid
                              subscription, or purchasing goods or services.

                                      97
                                   EXHIBIT J

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                              Because many of our advertisers will seek to
                              advertise on our web site to encourage people
                              to use the Internet to purchase goods or
                              services, our business, results of operations,
                              and financial condition could be materially
                              adversely affected if Internet users
                              significantly reduce their use of the Internet
                              because of security concerns. We may also incur
                              significant costs to protect our website
                              against the threat of security breaches or to
                              alleviate problems caused by such breaches.

THEHEALTHCHANNEL.COM          Our success depends, to a significant extent,
DEPENDS ON KEY PERSONNEL      upon a number of key employees, including our
FOR CRITICAL MANAGEMENT       President, Donald Shea, and our Vice President,
DECISIONS.                    Chief Operations Officer, Secretary, and Chief
                              Financial Officer, Thomas Lonergan.  The loss
                              of services of one or more of these employees
                              could have a material adverse effect on our
                              business.  We believe that our future success
                              will also depend in part upon our ability to
                              attract, retain, and motivate qualified
                              personnel. Competition for such personnel is
                              intense.  There can be no assurance that we can
                              attract and retain such personnel.  We do not
                              have "key person" life insurance on any of our
                              employees.  See "Management."

THEHEALTHCHANNEL.COM MAY      Our business is capital intensive.  Our future
REQUIRE ADDITIONAL            capital requirements will depend on many factors,
FINANCING FOR ITS BUSINESS.   including cash flow from operations,competing
                              market developments, and our ability to market
                              our website successfully. Although we currently
                              expect to meet our capital needs by selling
                              stock to Swartz Private Equity, LLC, it may be
                              necessary to raise additional funds through
                              equity or debt financings. Any equity
                              financings could result in dilution to our
                              shareholders. Debt financing may result in
                              higher interest expense. Any financing, if
                              available, may be on unfavorable terms. If we
                              cannot raise adequate funds, we may have to
                              reduce or curtail our operations.

THEHEALTHCHANNEL.COM'S        thehealthchannel.com's common stock is quoted
COMMON STOCK IS CURRENTLY     and traded on the Over-the-Counter Pink Sheets
CLASSIFIED AS A "PENNY        ("Bulletin Board").  As a result, aninvestor
STOCK" WHICH COULD CAUSE      could find it more difficult to dispose of, or
INVESTORS TO EXPERIENCE       to obtain accurate quotations as to the market
DELAYS AND OTHER              value of, the stock ascompared to securities
DIFFICULTIES IN TRADING       which are traded on the NASDAQ trading market or
SHARES IN THE STOCK MARKET    on an exchange.  In addition, trading in the
                              common stockis covered by what is known as the
                              "Penny Stock Rules."  The Penny Stock Rules
                              require brokers to provide additional
                              disclosure in connection with any trades
                              involving a stock defined as a "penny stock,"
                              including the delivery, prior to any penny
                              stock transaction, of a disclosure schedule
                              explaining the penny stock market and the risks
                              associated therewith. The regulations governing
                              penny stocks could limit the ability of brokers
                              to sell the shares offered in this prospectus
                              and thus the ability of the purchasers of this
                              Offering to sell these shares in the secondary
                              market. Our stock will be covered by the Penny
                              Stock Rules until it has a market price of
                              $5.00 per share or more, subject to certain
                              exceptions The trading price of our stock could
                              be subject to wide fluctuations in response to
                              quarterly variations in operating results,
                              announcement of technological innovations or
                              new products by us or our competitors, and
                              other events or factors. In addition, in recent
                              years the stock market has experienced extreme
                              price and volume fluctuations that have had a
                              substantial effect on the market prices for
                              many internet companies, which may be unrelated
                              to the operating performance of the specific
                              companies.

WE HAVE NEVER PAID            thehealthchannel.com has never paid dividends on
DIVIDENDS ON OUR COMMON       its common stock and does not plan on paying cash
STOCK AND DON'T PLAN TO PAY   dividends in the foreseeable future.
DIVIDENDS IN THE FUTURE.

                                      98
                                   EXHIBIT J

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INVESTORS WILL EXPERIENCE     In many cases, our officers, directors, and
IMMEDIATE AND SUBSTANTIAL     present shareholders have acquired their
DILUTION.                     securities at a cost substantially less than
                              that which investors will pay for the common
                              stock offered by this prospectus. As a result,
                              investors acquiring shares registered in this
                              prospectus will likely incur immediate,
                              substantial dilution in the net tangible book
                              value per share of the common stock. The net
                              tangible book value of a share represents the
                              amount of thehealthchannel.com's tangible
                              assets less the amount of its liabilities,
                              divided by the number of shares outstanding.

THE PRICE OF THE SHARES       The securities being offered in this prospectus
OFFERED HEREBY IS DEPENDENT   are offered at the market price prevailing at
UPON THE PRICE IN THE         the time of the offer. The market price of
PUBLIC MARKET WHICH WILL      these securities may vary and may have a limited
FLUCTUATE.                    relationship, or no relationship, to our assets,
                              book value, results of operations, or other
                              established criteria of value. The offering
                              price also may not be indicative of the prices
                              that will prevail in the subsequent trading
                              market for our securities.

MOST OF OUR SHARES OF         Adjusted for the anticipated one for three
COMMON STOCK OF WILL BECOME   reverse stock split, as of July 28, 2000,
ELIGIBLE FOR PUBLIC SALE      thehealthchannel.com had outstanding 14,303,948
OVER THE NEXT YEAR WHICH      shares that are classified as "restricted
COULD HAVE A DEPRESSIVE       securities" as that term is defined under Rule
EFFECT ON THE STOCK.          144 of the Securities Act of 1933, as amended.
                              Most of these shares have been held by
                              shareholders for at least one year and may be
                              entitled to be sold under Rule 144. In
                              addition, we are registering (i) 31,250,000
                              shares and 4,275,000 shares underlying warrants
                              for Swartz, (ii) 1,690,680 shares and 2,097,823
                              shares underlying warrants for other Selling
                              Shareholders, (ii) 526,333 shares for Les Dube
                              and Irene Dube, and (iv) 833,333 shares
                              underlying warrants for Laguna Pacific
                              Partners, L.P.. If a significant number of
                              shares are offered for sale through the public
                              securities markets simultaneously, it would
                              have a depressive effect on the trading price
                              of common stock. See "Description of
                              Securities."

SPECIAL NOTE REGARDING        Statements made in this prospectus regarding our
FORWARD LOOKING STATEMENTS.   funding requirements and the timing of and
                              potential for our business constitute forward
                              looking statements under federal securities
                              laws. Such statements are subject to certain
                              risks and uncertainties that could cause the
                              rate at which we incur expenses and conducts
                              our business to differ materially from those
                              projected. Our ability to proceed with the
                              marketing and development of our business in
                              accordance with the dates anticipated is
                              subject to all of the risks discussed in this
                              prospectus and our ability to estimate the time
                              period for which revenues will fund our
                              operations is subject to substantial
                              uncertainty. Undue reliance should not be
                              placed on the dates and time periods discussed
                              in this prospects. These estimates are based on
                              the current expectations of our management
                              which may change in the future due to a large
                              number of unanticipated future developments.

WE MAY HAVE CONTINGENT        We have engaged in a private placement of
LIABILITIES RESULTING FROM    securities from September 1999 up to the date
OUR RECENT PRIVATE            of this prospectus. During this period of time,
PLACEMENT.                    we sold securities to investors based on our most
                              recent closing price on the OTC Bulletin Board
                              or the Pink Sheets.  The prices at which these
                              securities were sold fluctuated widely, based
                              on fluctuations in our closing prices. We
                              cannot preclude the possibility that an
                              investor or investors who purchased securities
                              in the private placement will claim that the
                              Company failed to fully disclose the fact that
                              fluctuation in the market for our stock would
                              cause adjustment in the price of the private
                              placement. We believe we fully disclosed this
                              risk. In the event any shareholder were to
                              successfully prosecute an action against us on
                              this issue, it may have severe and adverse
                              effects on the Company, including but not
                              limited to impacting our ability to continue as
                              a going concern.

WE MAY NEED ADDITIONAL        We believe that the funds to be raised in this
CAPITAL.                      offering (assuming the successful completion of
                              a maximum offering), together with our revenues
                              will be sufficient to

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                                  EXHIBIT J

<PAGE>

                              provide us with capital sufficient to fund our
                              short-term needs. It is likely that we will be
                              required to raise additional capital. We cannot
                              assure you that the proceeds we receive from
                              Swartz will, in fact, be available or if
                              available will be sufficient in the near term
                              or that conditions and circumstances may not
                              result in subsequent cash requirements by us,
                              or that future funds will be sufficient to
                              sustain operations and to meet growth. In the
                              event of such developments, attaining financing
                              under such conditions may not be possible, or
                              even if additional capital may be otherwise
                              available, the terms on which such capital may
                              be available may not be commercially feasible
                              or advantageous to us.

WE HAVE BEEN ADVISED BY THE   We recently received correspondence from the
SECURITIES AND EXCHANGE       Securities Exchange Commission alleging that the
COMMISSION (THE "SEC")        exchange of BioLogix shares for shares of
THAT CERTAIN TRANSACTIONS     thehealthchannel.com may have constituted an
INVOLVING                     unregistered public offering in violation of
THEHEALTHCHANNEL.COM MAY      applicable state and federal securities laws.
HAVE BEEN IN VIOLATION OF     While we have provided correspondence to the SEC
THE SECURITIES LAWS.          denying these allegations, the SEC has indicated
                              that it continues to disagree with our position.
                              If we have engaged in an unregistered public
                              offering, this would constitute a violation of
                              the Securities Act of 1933 and applicable state
                              laws and would make us potentially liable to
                              legal action by both the SEC and state security
                              regulators and our shareholders. In the event
                              any of these parties were to successfully
                              prosecute an action based on these allegations,
                              it would have a severe and adverse effect on
                              the Company. The Company may be required to pay
                              monetary damages and penalties and may be
                              subject to a court-imposed injunction, or may
                              be forced to enter into a consent decree with
                              the SEC. In the event, any of these events were
                              to occur it would likely immediately and
                              severely impact the Company, possibly impairing
                              our ability to continue as a going concern.

                                      100
                                   EXHIBIT J

<PAGE>

LITIGATION                    We have been named as a cross-defendant in a
                              cross-complaint filed by Michael Grandon in an
                              action pending in the Superior Court State of
                              California for the County of San Francisco,
                              Case No. 307364. This action was initiated by
                              BioLogix International, Ltd. against Michael
                              Grandon on October 22, 1999.  The complaint of
                              BioLogix International, Ltd. alleges causes of
                              action against Michael Grandon for:  (1)
                              temporary restraining order and preliminary and
                              permanent injunction; (2) breach of fiduciary
                              duty; (3) fraud by intentional
                              misrepresentation; (4) conversion; (5)
                              possession of personal property; (6)
                              declaratory relief; and (7) accounting.  The
                              claims alleged by BioLogix International, Ltd.
                              relate to the actions and conduct of Mr.
                              Grandon while an officer and director of
                              BioLogix International, Ltd.  We are named as a
                              cross-defendant in the cross-complaint of
                              Michael Grandon in a cause of action for breach
                              of contract based upon an alleged employment
                              agreement between Michael Grandon and BioLogix
                              International Ltd.  Mr. Grandon claims that
                              this alleged employment agreement is our
                              responsibility based upon our purchase of the
                              internet related assets of BioLogix
                              International Ltd.  We were served with the
                              cross-complaint on December 14, 1999.  Mr.
                              Grandon seeks $400,000 in damages and options
                              to purchase one million shares of BioLogix
                              stock.  We have answered the cross-complaint
                              denying the allegations of Mr. Grandon.  We
                              will aggressively defend against the claims
                              asserted by Mr. Grandon.

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                                    EXHIBIT J

<PAGE>

                           THEHEALTHCHANNEL.COM, INC.

                       EXHIBIT K: CAPITALIZATION SCHEDULE
                           EXHIBIT L: USE OF PROCEEDS
                        EXHIBIT M: INTELLECTUAL PROPERTY
                            EXHIBIT N: KEY EMPLOYEES

                                      102
                                    EXHIBIT K

<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                             Capitalization Schedule
                              As of August 15 2000

<TABLE>

<S>                                                                            <C>
Common Stock Outstanding on August 15, 2000                                     79,724,043
        Warrants outstanding(1)                                                 11,043,469
        Shares reserved for issuance as a result of this Agreement             103,125,000
        Shares reserved to be issued                                             1,579,000
        Shares reserved for Stock Option Plan                                    5,000,000
        Total Shares Outstanding and Reserved                                  198,687,775
        Shares of Common Stock Authorized(2)                                   110,000,000
        Shares of Preferred Stock Authorized                                         None
</TABLE>

(1) Includes 3,450,000 warrants already issued to Swartz Private Equity, LLC

(2) At the next shareholder meeting in October 2000, the Company is asking its
shareholders to approve a three for one reverse stock split in October 2000 and
increase the authorized stock to 175,000,000.

                                      103
                                    EXHIBIT K

<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                                 Use of Proceeds

<TABLE>
           <S>                                         <C>
           Repayments of Bridge Loans made by             $500,000
           Laguna Pacific Partners, L.P. and
           Les Dube and Irene Dube
           Research and Development                     $9,500,000
           Marketing                                   $10,000,000
           Other Working Capital                        $9,825,000
           Expenses of Transaction and                    $175,000
           Registration

           TOTAL PROCEEDS                            $30,000,000.00

</TABLE>

                           THEHEALTHCHANNEL.COM, INC.
                         Intellectual Property Schedule

TRADEMARKS

U.S. Trademark Application for thehealthchannel.com    Serial Number 75772466

U.S. Trademark Application for thehealthchannel.com    Serial Number 75772326

                                    EXHIBIT M

<PAGE>

                           THEHEALTHCHANNEL.COM, INC.
                                  Key Employees

DONALD J. SHEA, PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHAIRMAN. From 1995
through 1997, Mr. Shea was Marketing Consultant to Marketing Insights, Inc., a
new product development Company in Princeton, New Jersey. Prior to that he was
President of Avonwood Capital Corporation, Philadelphia, Pennsylvania, a Venture
Capital/Management Consulting firm; and President of Brilliant Enterprises,
Inc., Philadelphia, Pennsylvania, a dental products manufacturer. Mr. Shea was
also the former President and CEO of Clairol, Inc., a Division of Bristol-Myers
Squibb, former Vice-President of Bristol-Myers Squibb. Mr. Shea brings over 35
years of consumer products marketing and general management experience to the
Company.

THOMAS F. LONERGAN, MA, CHIEF OPERATING OFFICER, VICE PRESIDENT, SECRETARY,
CHIEF FINANCIAL OFFICER, AND DIRECTOR. Mr. Lonergan was the co-founder and Vice
Chairman The IQ NOW Corporation, a deliverer of healthcare information on the
Internet from 1992 through 1999. Previously, he was a Regional Director of
Cardiology for Tenet Medical Group, former Director of Clinical Services at
Downey Community Hospital, and has been a hospital administrator for 20 years.
He was responsible for $70 million budget and manages over 200 employees. For 11
years he has been an instructor and director of medical technology at Coast
College. Mr. Lonergan is co-founder of the American College of Cardiovascular
Administrators. He has an Associate of Arts (Pre-Medicine) from Cerritos Junior
College (1971), a Bachelor of Science (Pre-Medicine) from the University of
California, Irvine (1973), and an Executive Masters Degree of Business
Administration from Pepperdine University (1990).

BALAZS IMRE BODAI, M.D., DIRECTOR. From 1985 and continuing through the present,
Dr. Bodai is the Chief of Surgery at Kaiser Permanente Medical Center,
Sacramento, California. He is also President of B and B Medical Research
Technology, Inc., Sacramento, California; an Associate Clinical Professor of
Surgery at the University of California at Davis; a Consultant to COAT, Johnson
& Johnson, Newark, New Jersey; and a Senior Consultant to Sontek Medical, Inc.,
Higham, Massachusetts. "Ernie" holds a Bachelor of Science and Master of Science
Degrees from the School of Medicine at the University of California at Los
Angeles, and a Doctor of Medicine Degree from the University of California at
Davis. He is author and co-author of over 120 scientific and clinical
publications in various of the leading medical journals, author of a surgery
text book, and is well-recognized within the field of emergency and critical
care medicine.

JEFFREY H. BERG, PH.D., DIRECTOR. Dr. Berg holds an MBA and Ph.D. in Chemistry
from New York University. From September 1995 through the present, he is a
senior research analyst for M.H. Meyerson & Co., Inc. From 1991 through the
present, he is the President of Health Care Insights. Mr. Berg was Chicago
Corporation's senior medical advisor from 1991 to 1992. Mr. Berg was security
analyst for William K. Woodruff & Co. from 1990 to 1991 and Vice-President of
Research for J.C. Bradford & Co. from 1987 to 1990. From 1981 to 1987 he was
Vice-President of the Health Care Division of PA Consulting Services, Inc. of
London,

<PAGE>

England, specializing in international technology and new product
surveillance, venture capital investment, acquisition studies, and
state-of-the-art for diverse areas of health care. During the 1970s, Mr. Berg
developed products and conducted research for General Foods, the Patient Care
Division of Johnson & Johnson Products, Inc., the Consumer Products Division
of Ortho Pharmaceutical Corporation; and staffed and supervised scientists
and engineers at the R&D laboratories for development of varied medical and
health care products within the Johnson & Johnson family of companies. Dr.
Berg holds several patents in the area of biosensor and disposable electrode
technology. He has published a number of articles on topics such as
biosensors, cancer therapy, biopharmaceuticals, drug infusion devices and
industrial biotechnology. Dr. Berg serves as a liaison with the investment
banking and scientific communities.

JOSEPH SONG, M.D., F.A.C.C., DIRECTOR. From 1994 through the present, Dr. Song
has his own practice in Interventional Cardiology. From 1991 through 1994, he
was an Interventional Cardiologist with Internal Medicine Specialists Medical
Group, Inc. He is a Lecturer and Moderator at Downey Foundation Hospitals. Dr.
Song is Clinical Assistant Professor of Medicine/Cardiology at the College of
Osteopathic Medicine of the Pacific in California and a member of the Teaching
Staff of the Family Practice Internship/Residency Program at Rio Hondo/Downey
Community Hospital, California. He is certified by the American Board of
Internal Medicine and the American Board of Cardiovascular Diseases. Dr. Song
received an A.B. in Physics from Washington University in St. Louis Missouri in
1982 and his M.D. from University of Missouri-Columbia School of Medicine in
1986.

                                   EXHIBIT M<PAGE>

                                  EXHIBIT 10.10

                          REGISTRATION RIGHTS AGREEMENT

                                     BETWEEN

                           THEHEALTHCHANNEL.COM, INC.

                                       AND

                           SWARTZ PRIVATE EQUITY, LLC

<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

        THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as
of August 15, 2000, by and among thehealthchannel.com, a corporation duly
incorporated and existing under the laws of the State of Delaware (the
"Company"), and the subscriber as named on the signature page hereto
(hereinafter referred to as "Subscriber").

                                    RECITALS:

        WHEREAS, pursuant to the Company's offering ("Offering") of up to Thirty
Million Dollars ($30,000,000), excluding any funds paid upon exercise of the
Warrants, of Common Stock of the Company pursuant to that certain Investment
Agreement of even date herewith (the "Investment Agreement") between the Company
and the Subscriber, the Company has agreed to sell and the Subscriber 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 of Thirty
Million Dollars ($30,000,000);

        WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed to issue to the Subscriber the Commitment Warrants and, from time to
time, the Purchase Warrants, each as defined in the Investment Agreement, to
purchase a number of shares of Common Stock, exercisable for five (5) years from
their respective dates of issuance (collectively, the "Warrants"); and

        WHEREAS, pursuant to the terms of the Investment Agreement, the Company
has agreed to provide the Subscriber 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).

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

<PAGE>

               "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.

               "Common Stock" shall mean the common stock, par value $0.00035,
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 2.4.

               "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.

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

               "Holder" shall mean Subscriber, 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 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.

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

<PAGE>

               "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 Subscriber pursuant to the
Investment Agreement, and (ii) issuable or issued upon exercise of the 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 Subscriber), covering the resale of a number of
shares of Common Stock as Registrable Securities equal to at least Fifty Million
(50,000,000) 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 SUBSCRIBER an amount equal to $500, in cash, FOR EACH BUSINESS DAY
AFTER THE FILING DEADLINE until such Registration Statement is filed, payable
within ten (10) BUSINESS DAYS following the end of each calendar month in which
such payments accrue.

               2.3    [INTENTIONALLY LEFT BLANK].

               2.4 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.

               2.5    [INTENTIONALLY LEFT BLANK].

               2.6    [INTENTIONALLY LEFT BLANK].

<PAGE>

               2.7 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.

               2.8 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 and 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 all Registrable Securities are resold pursuant to
such Registration Statement, notwithstanding any Termination or Automatic
Termination (as each is defined in the Investment Agreement) of the Investment
Agreement.

               (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, in conformity with the
requirements of the Securities Act, 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, of 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 Omitted].

<PAGE>
               (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 ten (10)
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.

        4. 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

<PAGE>

"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.

        5. 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 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.

        6. DISPUTE AS TO REGISTRABLE SECURITIES. In the event the Company
believes that shares sought to be registered under Section 2 or Section 4 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.

        7. 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.

        8. 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.

<PAGE>

        9. 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 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 9(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) Each Holder of any securities included in such registration
being effected shall indemnify and hold harmless the Company, its directors and
officers, each underwriter and each other person, if any, who controls (within
the meaning of the Securities Act) the Company or such other indemnified party,
against any liability, joint or several, to which any such indemnified party may
become subject under the Securities Act or any other statute or at common law,
insofar as such liability (or actions in respect thereof) arises out of or is
based upon (i) any untrue statement or alleged untrue statement of any material
fact contained, on the effective date thereof, in any registration statement
under which securities were registered under the Securities Act at the request
of such Holder, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereto, or (ii) any omission or alleged
omission by such Holder to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such registration
statement, preliminary or final prospectus, amendment or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Company by such Holder specifically for use therein. Such Holder shall reimburse
any indemnified party for any legal fees incurred in investigating or defending
any such liability; PROVIDED, HOWEVER, that such Holder's obligations hereunder
shall be limited to an amount equal to the proceeds to such

<PAGE>

Holder of the securities sold in any such registration; and PROVIDED FURTHER,
that no Holder shall be required to indemnify any party against any liability
arising from any untrue or misleading statement or omission contained in any
preliminary prospectus if such deficiency is corrected in the final
prospectus or for any liability which arises out of the failure of such party
to deliver a prospectus as required by the Securities Act.

               (c) Promptly after receipt by an indemnified party under this
Section 9 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 9, 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 9, 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 9.

               (d) In the event that the indemnity provided in paragraphs (a)
and/or (b) of this Section 9 is unavailable to or insufficient to hold harmless
an indemnified party for any reason, the Company and each Holder agree to
contribute to the aggregate claims, losses, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Holders may be subject in such proportion as is appropriate to reflect the
relative fault of the Company and the Holders in connection with the statements
or omissions which resulted in such Losses. Relative fault shall be determined
by reference to whether any alleged untrue statement or omission relates to
information provided by the Company or by the Holders. The Company and the
Holders agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation that does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 9,
each person who controls a Holder of Registrable Securities within the meaning
of either the Securities Act or the Exchange Act and each director, officer,
partner, employee and agent of a Holder shall have the same rights to
contribution as such holder, and each person who controls the Company within the
meaning of either the Securities Act or the Exchange Act and each director and
officer of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).

<PAGE>

                        (e)  The obligations of the Company and Holders under
this Section 9 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.

        10. 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

               (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.

        11. AMENDMENT OF 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.

        12. 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: thehealthchannel.com; Attn: Donald Shea,
CEO; 260 Newport Center Drive, Suite 250, Newport Beach, CA 92660; Telephone:
(949) 631-8317, Facsimile: (949) 719-6055, 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.

        13. 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.

        14. 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 or 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

<PAGE>

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.

        15. 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 and wholly to be performed in that jurisdiction, except for matters arising
under the Securities Act or the Exchange Act, which matters shall be construed
and interpreted in accordance with such laws. Any dispute arising out of or
relating to this Agreement or the breach, termination or validity hereof shall
be finally settled by the federal or state courts located in FULTON COUNTY,
GEORGIA.

        16. 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.

        17. 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.

        18. 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.

        19. 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 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,

                           [INTENTIONALLY LEFT BLANK]

<PAGE>

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 15th day of August, 2000.

                                              THE HEALTHCHANNEL.COM

                                            By: /s/ Donald Shea
                                               -----------------------------
                                                   Donald Shea, CEO

                                    Address:       260 Newport Center Drive,
                                                   Suite 250
                                                   Newport Beach, CA  92660
                                                   Telephone: (949) 631-8317
                                                   Facsimile:  (949) 719-6055

                                                SUBSCRIBER:
                                                SWARTZ PRIVATE EQUITY, LLC

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

                                     Address:      1080 Holcomb Bridge Road
                                                   Bldg. 200, Suite 285
                                                   Roswell, GA  30076
                                                   Telephone: (770) 640-8130
                                                   Facsimile:  (770) 640-7150

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