Document:

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                                                                     EXHIBIT 4.3

NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY OTHER APPLICABLE SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS.
NEITHER THIS WARRANT NOR THE SHARES ISSUABLE UPON EXERCISE HEREOF MAY BE SOLD,
PLEDGED, TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR IN A TRANSACTION
WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT AND
ANY APPLICABLE STATE LAWS.

                             STOCK PURCHASE WARRANT

              To Purchase Up to 3,131,459 Shares of Common Stock of

                                  E-MEDSOFT.COM

        This certifies that, for value received, Cappello Capital Corp. (the
"Holder"), is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on or after the
Initial Exercise Date (as defined below) and on or prior to the close of
business on the Termination Date (as defined below) but not thereafter, to
subscribe for and purchase from e-MedSoft.com, a corporation incorporated in the
State of Nevada (the "Company"), up to 3,131,459 shares (the "Warrant Shares")
of Common Stock, $0.0001 par value per share, of the Company (the "Common
Stock"). The purchase price of one share of Common Stock (the "Exercise Price")
under this Warrant shall be $2.3951. The Exercise Price and the number of
Warrant Shares for which the Warrant is exercisable shall be subject to
adjustment as provided herein.

        1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws, this Warrant and all rights hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
Holder in person or by duly authorized attorney, upon surrender of this Warrant
together with the Assignment Form annexed hereto properly endorsed.

        2. Authorization of Shares. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such
issue).

        3. Exercise of Warrant.

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               (a) Except as provided in Section 4 herein, exercise of the
        purchase rights represented by this Warrant may be made at any time or
        times (i) on or after the earlier to occur of (A) 180 calendar days from
        the date hereof, and (B) the Effective Date (the "Initial Exercise
        Date"), and, (ii) on or before the earlier of (the "Termination Date")
        (A) the close of business on February 20, 2011, and (B) the date on
        which the Commission declares, as a matter of general policy, that it
        will no longer permit the registration of the resale of shares purchased
        pursuant to any "equity line" arrangement, provided that such
        declaration occurs within 180 calendar days from the date hereof by the
        surrender of this Warrant and the Notice of Exercise Form annexed hereto
        duly executed, at the office of the Company (or such other office or
        agency of the Company as it may designate by notice in writing to the
        registered Holder at the address of such Holder appearing on the books
        of the Company) and upon payment of the Exercise Price of the shares
        thereby purchased by wire transfer or cashier's check drawn on a United
        States bank (or by means of a cashless exercise,) the Holder shall be
        entitled to receive a certificate for the number of Warrant Shares so
        purchased. Notwithstanding anything to the contrary herein, sub-section
        (a)(ii)(B) above shall have no force and effect (i) with regard to
        comments received by the Commission that may be cured by obtaining
        waivers from the Purchaser or by withdrawing the Registration Statement
        and amending any of the Transaction Documents, or (ii) in the event the
        Registration Statement is declared effective. Certificates for shares
        purchased hereunder shall be delivered to the Holder within three (3)
        Trading Days after the date on which this Warrant shall have been
        exercised as aforesaid. This Warrant shall be deemed to have been
        exercised and such certificate or certificates shall be deemed to have
        been issued, and Holder or any other person so designated to be named
        therein shall be deemed to have become a holder of record of such shares
        for all purposes, as of the date the Warrant has been exercised by
        payment to the Company of the Exercise Price and all taxes required to
        be paid by the Holder, if any, pursuant to Section 5 prior to the
        issuance of such shares, have been paid.

               (b) If this Warrant shall have been exercised in part, the
        Company shall, at the time of delivery of the certificate or
        certificates representing Warrant Shares, deliver to Holder a new
        Warrant evidencing the rights of Holder to purchase the unpurchased
        Warrant Shares called for by this Warrant, which new Warrant shall in
        all other respects be identical with this Warrant.

               (c) This Warrant shall also be exercisable by means of a
        "cashless exercise" in which the Holder shall be entitled to receive a
        certificate for the number of Warrant Shares equal to the quotient
        obtained by dividing [(A-B) (X)] by (A), where:

                   (A) = the average of the high and low trading prices per
               share of Common Stock on the Trading Day preceding the date of
               such election on the Nasdaq Stock Market, or if the Common Stock
               is not traded on the Nasdaq Stock Market, then the Principal
               Market in terms of volume;

                   (B) = the Exercise Price of this Warrant; and

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                   (X) = the number of Warrant Shares issuable upon exercise of
               this Warrant in accordance with the terms of this Warrant.

               (d) Notwithstanding anything herein to the contrary, in no event
        shall the Holder be permitted to exercise this Warrant for Warrant
        Shares to the extent that (i) the number of shares of Common Stock owned
        by such Holder (other than Warrant Shares issuable upon exercise of this
        Warrant) plus (ii) the number of Warrant Shares issuable upon exercise
        of this Warrant, would be equal to or exceed 9.9% of the number of
        shares of Common Stock then issued and outstanding, including shares
        issuable upon exercise of this Warrant held by such Holder after
        application of this Section 3(d). As used herein, beneficial ownership
        shall be determined in accordance with Section 13(d) of the Exchange
        Act. To the extent that the limitation contained in this Section 3(d)
        applies, the determination of whether this Warrant is exercisable (in
        relation to other securities owned by the Holder) and of which a portion
        of this Warrant is exercisable shall be in the sole discretion of such
        Holder, and the submission of a Notice of Exercise shall be deemed to be
        such Holder's determination of whether this Warrant is exercisable (in
        relation to other securities owned by such Holder) and of which portion
        of this Warrant is exercisable, in each case subject to such aggregate
        percentage limitation, and the Company shall have no obligation to
        verify or confirm the accuracy of such determination. Nothing contained
        herein shall be deemed to restrict the right of a Holder to exercise
        this Warrant into Warrant Shares at such time as such exercise will not
        violate the provisions of this Section 3(d). The provisions of this
        Section 3(d) may be waived by the Holder upon, at the election of the
        Holder, with not less than 61 days' prior notice to the Company, and the
        provisions of this Section 3(d) shall continue to apply until such 61st
        day (or such later date as may be specified in such notice of waiver).
        No exercise of this Warrant in violation of this Section 3(d) but
        otherwise in accordance with this Warrant shall affect the status of the
        Warrant Shares as validly issued, fully-paid and nonassessable.

        4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

        5. Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the

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Company may require, as a condition thereto, the payment of a sum sufficient to
reimburse it for any transfer tax incidental thereto.

        6. Closing of Books. Unless required by law, the Company will not close
its stockholder books or records in any manner which prevents the timely
exercise of this Warrant.

        7. Transfer, Division and Combination.

               (a) Subject to compliance with any applicable securities laws,
        transfer of this Warrant and all rights hereunder, in whole or in part,
        shall be registered on the books of the Company to be maintained for
        such purpose, upon surrender of this Warrant at the principal office of
        the Company, together with a written assignment of this Warrant
        substantially in the form attached hereto duly executed by the Holder or
        its agent or attorney and funds sufficient to pay any transfer taxes
        payable upon the making of such transfer. In the event that the Holder
        wishes to transfer a portion of this Warrant, the Holder shall transfer
        at least 50,000 shares underlying this Warrant to any such transferee.
        Upon such surrender and, if required, such payment, the Company shall
        execute and deliver a new Warrant or Warrants in the name of the
        assignee or assignees and in the denomination or denominations specified
        in such instrument of assignment, and shall issue to the assignor a new
        Warrant evidencing the portion of this Warrant not so assigned, and this
        Warrant shall promptly be cancelled. A Warrant, if properly assigned,
        may be exercised by a new holder for the purchase of Warrant Shares
        without having a new Warrant issued.

               (b) This Warrant may be divided or combined with other Warrants
        upon presentation hereof at the aforesaid office of the Company,
        together with a written notice specifying the names and denominations in
        which new Warrants are to be issued, signed by the Holder or its agent
        or attorney. Subject to compliance with Section 7(a), as to any transfer
        which may be involved in such division or combination, the Company shall
        execute and deliver a new Warrant or Warrants in exchange for the
        Warrant or Warrants to be divided or combined in accordance with such
        notice.

               (c) The Company shall prepare, issue and deliver at its own
        expense (other than transfer taxes) the new Warrant or Warrants under
        this Section 7.

               (d) The Company agrees to maintain, at its aforesaid office,
        books for the registration and the registration of transfer of the
        Warrants.

        8. No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price (or by means of a cashless exercise),
the Warrant Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business on the
later of the date of such surrender or payment.

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        9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

        10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day not a Saturday,
Sunday or legal holiday.

        11. Adjustments of Exercise Price and Number of Warrant Shares.

               (a) Stock Splits, etc. The number and kind of securities
        purchasable upon the exercise of this Warrant and the Exercise Price
        shall be subject to adjustment from time to time upon the happening of
        any of the following. In case the Company shall (i) pay a dividend in
        shares of Common Stock or make a distribution in shares of Common Stock
        to holders of its outstanding Common Stock, (ii) subdivide its
        outstanding shares of Common Stock into a greater number of shares,
        (iii) combine its outstanding shares of Common Stock into a smaller
        number of shares, or (iv) issue any shares of its capital stock in a
        reclassification of the Common Stock, then the number of Warrant Shares
        purchasable upon exercise of this Warrant immediately prior thereto
        shall be adjusted so that the Holder shall be entitled to receive the
        kind and number of Warrant Shares or other securities of the Company
        which it would have owned or have been entitled to receive had such
        Warrant been exercised in advance thereof. Upon each such adjustment of
        the kind and number of Warrant Shares or other securities of the Company
        which are purchasable hereunder, the Holder shall thereafter be entitled
        to purchase the number of Warrant Shares or other securities resulting
        from such adjustment at an Exercise Price per Warrant Share or other
        security obtained by multiplying the Exercise Price in effect
        immediately prior to such adjustment by the number of Warrant Shares
        purchasable pursuant hereto immediately prior to such adjustment and
        dividing by the number of Warrant Shares or other securities of the
        Company resulting from such adjustment. An adjustment made pursuant to
        this paragraph shall become effective immediately after the effective
        date of such event retroactive to the record date, if any, for such
        event.

               (b) Reset Exercise Price. Without limiting the generality of
        subclause (a) above, the Exercise Price shall be subject to adjustment
        from time to time upon the happening of any of the following events: (i)
        upon the exercise by the Company of its initial draw down ("Draw Down")
        pursuant to the Purchase Agreement, the Exercise Price shall be reset,
        if lower, to the amount equal to the product of (x) one hundred fifty
        percent (150%)

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        and (y) the lowest Purchase Price during the Draw Down Pricing Period
        for such initial Draw Down; (ii) upon the exercise by the Company of any
        subsequent Draw Down (after the initial Draw Down), the Exercise Price
        shall be reset to the amount equal to the product of (x) one hundred
        fifty percent (150%) and (y) the lowest Purchase Price during any Draw
        Down Pricing Period (other than the initial Drawn Down Pricing Period),
        provided that such Exercise Price as adjusted shall be lower than the
        Exercise Price in effect immediately prior to such adjustment. Any
        adjustment made pursuant to this subclause (b) shall become effective
        immediately after the applicable settlement date for such Draw Down.

        12. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder shall have the right thereafter to receive, upon
exercise of this Warrant, the number of shares of Common Stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For purposes of
this Section 12, "common stock of the successor or acquiring corporation" shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall similarly apply to successive reorganizations,
reclassifications, mergers, consolidations or disposition of assets.
Notwithstanding anything to the contrary in this Section 12, a successor or
acquiring corporation, at the closing of the succession or acquisition of the
Company, may elect to purchase the entire unexercised portion of this Warrant at
the value for such warrant as determined in accordance with the Black-Scholes
option

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pricing formula; provided, however, the successor or acquiring corporation
notify the Holder at least ten (10) Trading Days prior to such closing. The
Holder shall have the right to exercise all or any portion of this Warrant up to
and including the Trading Day immediately prior to the date set in such notice
for the purchase of this Warrant.

        13. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

        14. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall promptly mail by registered or certified mail, return receipt requested,
to the Holder notice of such adjustment or adjustments setting forth the number
of Warrant Shares (and other securities or property) purchasable upon the
exercise of this Warrant and the Exercise Price of such Warrant Shares (and
other securities or property) after such adjustment, setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. Such notice, in the absence of
manifest error, shall be conclusive evidence of the correctness of such
adjustment.

        15. Notice of Corporate Action. If at any time:

               (a) the Company shall take a record of the holders of its Common
        Stock for the purpose of entitling them to receive a dividend or other
        distribution, or any right to subscribe for or purchase any evidences of
        its indebtedness, any shares of stock of any class or any other
        securities or property, or to receive any other right, or

               (b) there shall be any capital reorganization of the Company, any
        reclassification or recapitalization of the capital stock of the Company
        or any consolidation or merger of the Company with, or any sale,
        transfer or other disposition of all or substantially all the property,
        assets or business of the Company to, another corporation or,

               (c) there shall be a voluntary or involuntary dissolution,
        liquidation or winding up of the Company;

        then, in any one or more of such cases, the Company shall give to Holder
        (i) at least 20 days' prior written notice of the date on which a record
        date shall be selected for such dividend, distribution or right or for
        determining rights to vote in respect of any such reorganization,
        reclassification, merger, consolidation, sale, transfer, disposition,
        liquidation or winding up, and (ii) in the case of any such
        reorganization, reclassification, merger, consolidation, sale, transfer,
        disposition, dissolution, liquidation or winding up, at least 20 days'
        prior written notice of the date when the same shall take place. Such
        notice in accordance with the foregoing clause also shall specify (i)
        the date on which any such record is to be taken for the purpose of such
        dividend, distribution or right, the date on which the holders of Common

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        Stock shall be entitled to any such dividend, distribution or right, and
        the amount and character thereof, and (ii) the date on which any such
        reorganization, reclassification, merger, consolidation, sale, transfer,
        disposition, dissolution, liquidation or winding up is to take place and
        the time, if any such time is to be fixed, as of which the holders of
        Common Stock shall be entitled to exchange their Warrant Shares for
        securities or other property deliverable upon such disposition,
        dissolution, liquidation or winding up. Each such written notice shall
        be sufficiently given if addressed to Holder at the last address of
        Holder appearing on the books of the Company and delivered in accordance
        with Section 17(d).

        16. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the Principal Market
upon which the Common Stock may be listed.

            The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
against impairment. Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this Warrant.

            Before taking any action which would result in an adjustment in the
number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

        17. Miscellaneous.

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               (a) Jurisdiction. This Warrant shall constitute a contract under
        the laws of California, without regard to its conflict of law,
        principles or rules, and be subject to arbitration pursuant to the terms
        set forth in the Purchase Agreement.

               (b) Restrictions. The Holder acknowledges that the Warrant Shares
        acquired upon the exercise of this Warrant, if not registered, will have
        restrictions upon resale imposed by state and federal securities laws.

               (c) Nonwaiver and Expenses. No course of dealing or any delay or
        failure to exercise any right hereunder on the part of Holder shall
        operate as a waiver of such right or otherwise prejudice Holder's
        rights, powers or remedies, notwithstanding all rights hereunder
        terminate on the Termination Date. If the Company willfully and
        knowingly fails to comply with any provision of this Warrant, which
        results in any material damages to the Holder, the Company shall pay to
        Holder such amounts as shall be sufficient to cover any costs and
        expenses including, but not limited to, reasonable attorneys' fees,
        including those of appellate proceedings, incurred by Holder in
        collecting any amounts due pursuant hereto or in otherwise enforcing any
        of its rights, powers or remedies hereunder.

               (d) Notices. Any notice, demand, request, waiver or other
        communication required or permitted to be given hereunder shall be in
        writing and shall be effective (A) upon hand delivery or facsimile at
        the address or number designated below (if delivered on a business day
        during normal business hours where such notice is to be received), or
        the first business day following such delivery (if delivered other than
        on a business day during normal business hours where such notice is to
        be received), or (B) on the second business day following the date of
        mailing by express internationally recognized courier service, fully
        prepaid, addressed to such address, or upon actual receipt of such
        mailing, whichever shall first occur. The addresses for such
        communications shall be:

If to the Company:           1300 Marsh Landing Parkway, Suite 106
                             Jacksonville, FL  32250
                             Attn:  John Andrews
                             Tel:   (904) 543-1000
                             FAX:   (904) 543-1071

With a copy to:              Manatt, Phelps & Phillips, LLP
  (which shall not           11355 Olympic Boulevard
    constitute notice)       Los Angeles, CA 94304
                             Attn:  Gordon Bava, Esq.
                             Tel:   (310) 312-4000
                             FAX:   (310) 312-4224

If to Holder:                Cappello Capital Corp.
                             1299 Ocean Avenue, Suite 306

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                             Santa Monica, California 90401
                             Attn:  Robert Deutschman
                             Tel:   (310) 393-6632
                             FAX:   (310) 393-4838

        Any party hereto may from time to time change its address for notices by
giving written notice of such changed address to the other party hereto in
accordance herewith.

               (e) Limitation of Liability. No provision hereof, in the absence
        of affirmative action by Holder to purchase Warrant Shares, and no
        enumeration herein of the rights or privileges of Holder, shall give
        rise to any liability of Holder for the purchase price of any Common
        Stock or as a stockholder of the Company, whether such liability is
        asserted by the Company or by creditors of the Company.

               (f) Remedies. Holder, in addition to being entitled to exercise
        all rights granted by law, including recovery of damages, will be
        entitled to specific performance of its rights under this Warrant. The
        Company agrees that monetary damages would not be adequate compensation
        for any loss incurred by reason of a breach by it of the provisions of
        this Warrant and hereby agrees to waive the defense in any action for
        specific performance that a remedy at law would be adequate.

               (g) Successors and Assigns. Subject to applicable securities
        laws, this Warrant and the rights and obligations evidenced hereby shall
        inure to the benefit of and be binding upon the successors of the
        Company and the successors and permitted assigns of Holder. The
        provisions of this Warrant are intended to be for the benefit of all
        Holders from time to time of this Warrant and shall be enforceable by
        any such Holder or holder of Warrant Shares. Subject to compliance with
        applicable securities laws, the Holder may distribute this Warrant (or
        the Warrant Shares if applicable) in whole or in part, to Cappello
        Group, Inc., Cappello Partners, LLC, or their respective shareholders,
        members or employees, in increments of no less than 50,000 Warrants (or
        Warrant Shares if applicable), provided that for administrative
        purposes, there will be a maximum of ten (10) assignees or transferees,
        in the aggregate.

               (h) Amendment. This Warrant may be modified or amended or the
        provisions hereof waived with the written consent of the Company and the
        Holder.

               (i) Severability. Wherever possible, each provision of this
        Warrant shall be interpreted in such manner as to be effective and valid
        under applicable law, but if any provision of this Warrant shall be
        prohibited by or invalid under applicable law, such provision shall be
        ineffective to the extent of such prohibition or invalidity, without
        invalidating the remainder of such provisions or the remaining
        provisions of this Warrant.

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               (j) Headings. The headings used in this Warrant are for the
        convenience of reference only and shall not, for any purpose, be deemed
        a part of this Warrant.

        18. Definitions.

               (a) "Draw Down Pricing Period" shall mean a period of twenty (20)
        consecutive Trading Days beginning on the date specified in the Draw
        Down Notice (as defined in Section 5.1(f) of the Purchase Agreement in
        effect as of the date of this Warrant); provided, however, the Draw Down
        Pricing Period shall not begin before the day on which receipt of such
        notice is confirmed in accordance with the Purchase Agreement.

               (b) "Effective Date" shall mean the date the Registration
        Statement of the Company covering the shares of Common Stock being
        subscribed for pursuant to the Purchase Agreement is declared effective
        by the Securities and Exchange Commission (the "SEC").

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

               (d) "Principal Market" shall mean initially the American Stock
        Exchange and shall include the Nasdaq National Market, the Nasdaq
        Small-Cap Market and the New York Stock Exchange if the Company becomes
        listed and trades on such market or exchange after the date hereof.

               (e) "Purchase Price" shall mean, with respect to Shares purchased
        during each applicable Settlement Period (as defined in Section 5.1(b)
        of the Purchase Agreement in effect as of the date of this Warrant),
        92.5% (the "Purchase Price Percentage") of the VWAP on the date in
        question; except that, for each $50,000,000 increase in the Company's
        average market cap (calculated by multiplying the number of shares of
        Common Stock issued and outstanding by the VWAP of the Common Stock (the
        "Market Cap") above $150,000,000 during the applicable Market Cap Period
        (as defined below), the Purchase Price Percentage shall be increased by
        0.5% on the date in question until the Purchase Price Percentage equals
        94.5%; provided, however, each increase in Purchase Price Percentage
        shall only occur if the corresponding increase in the Market Cap is
        maintained for at least twenty (20) consecutive Trading Days immediately
        prior to the date the applicable Settlement Period commences (the
        "Market Cap Period"). By way of example, if the Market Cap is between $1
        and $199,999,999 during the Market Cap Period, the Purchase Price
        Percentage shall be 92.5%. If the Market Cap is between $200,000,000 and
        $249,999,999 during the entire Market Cap Period, the Purchase Price
        Percentage shall be 93%.

               (f) "Registration Statement" shall mean the registration
        statement under the Securities Act of 1933, as amended (the "Securities
        Act"), to be filed with the Securities and Exchange Commission for the
        registration of shares of Common Stock pursuant to the

<PAGE>   12

        Registration Rights Agreement by and between the Company and Hoskin
        International Limited (the "Registration Rights Agreement").

               (g) "Threshold Price" shall mean the price per Share designated
        by the Company as the lowest VWAP during any Draw Down Pricing Period at
        which the Company will sell its Common Stock in accordance with the
        Purchase Agreement.

               (h) "Trading Day" shall mean any day on which the Principal
        Market is open for business.

               (i) "Transaction Documents" shall mean the Common Stock Purchase
        Agreement ("Purchase Agreement"), the Registration Rights Agreement and
        the Escrow Agreement, all by and between the Company and Hoskin
        International Limited, dated concurrently herewith, as in effect as of
        the date hereof.

               (j) "VWAP" shall mean the daily volume weighted average price of
        the Company's Common Stock on the Principal Market as reported by
        Bloomberg Financial L.P. (based on a trading day from 9:30 a.m. Eastern
        Time to 4:02 p.m. Easter Time) using the VAP function on the date in
        question.

                             SIGNATURE PAGE FOLLOWS

<PAGE>   13

        IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.

Dated: February 20, 2001         E-MEDSOFT.COM

                                 By: /s/ John Andrews
                                     -------------------------------------------
                                         John Andrews, President & CEO

                          NOTICE OF EXERCISE OF WARRANT

To:     e-MedSoft.com

        (1) The undersigned hereby elects to purchase ________ Warrant Shares
(the "Common Stock"), of e-MedSoft.com pursuant to the terms of the attached
Warrant, and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any.

        (2) Please issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is specified
below:

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

The Warrant Shares shall be delivered to the following:

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

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

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

                                    [HOLDER]

                                    By:
                                         ---------------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                               ---------------------------------

                                    Date:
                                         ---------------------------------------

<PAGE>   14

                          NOTICE OF EXERCISE OF WARRANT
                    PURSUANT TO CASHLESS EXERCISE PROVISIONS

To:     e-MedSoft.com

        Aggregate Price of Warrant Before Exercise: $_____________
        Aggregate Price Being Exercised: $______________
        Exercise Price:  $________________ per share
        Number of Shares of Common Stock to be Issued Under this Notice:_______
        Remaining Aggregate Price (if any) After Issuance:  $__________________

Gentlemen:

        The undersigned, registered Holder of the Warrant delivered herewith,
hereby irrevocably exercises such Warrant for, and purchases thereunder, shares
of the Common Stock of e-MedSoft.com, a Nevada corporation, as provided below.
Capitalized terms used herein, unless otherwise defined herein, shall have the
meanings given in the Warrant. The portion of the Exercise Price (as defined in
the Warrant) to be applied toward the purchase of Common Stock pursuant to this
Notice of Exercise is $    , thereby leaving a remaining aggregate Exercise
Price (if any) equal to $    . Such exercise shall be pursuant to the cashless
exercise provisions of Section 3 of the Warrant; therefore, Holder makes no
payment with this Notice of Exercise. The number of shares to be issued pursuant
to this exercise shall be determined by reference to the formula in Section 3 of
the Warrant which, by reference to Section 3, requires the use of the high and
low trading price of the Company's Common Stock on the Trading Day preceding the
date of such election. The high and low trading price of the Company's Common
Stock has been determined by Holder to be $    and $    , respectively, which
figure is acceptable to Holder for calculations of the number of shares of
Common Stock issuable pursuant to this Notice of Exercise. Holder requests that
the certificates for the purchased shares of Common Stock be issued in the name
of and delivered to the person(s) designated below. To the extent the foregoing
exercise is for less than the full Aggregate Price of the Warrant, a replacement
Warrant representing the remainder of the Aggregate Price (and otherwise of like
form, tenor and effect) shall be delivered to Holder along with the share
certificate evidencing the Common Stock issued in response to this Notice of
Exercise.

        Please issue a certificate or certificates representing said Warrant
Shares in the name of the undersigned or in such other name as is specified
below:

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

<PAGE>   15

The Warrant Shares shall be delivered to the following:

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

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

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

                                    [HOLDER]

                                    By:
                                         ---------------------------------------
Name:
      --------------------------------------------------------------------------
Title:
      --------------------------------------------------------------------------

                                    Date:
                                         ---------------------------------------

NOTE:   The execution to the foregoing Notice of Exercise must exactly
        correspond to the name of the Holder on the Warrant.

<PAGE>   16

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

        FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

                                                                           whose

address is                                                                     .
           --------------------------------------------------------------------

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

                                                  Dated:               ,
                                                         --------------  -------

                      Holder's Signature:
                                         ---------------------------------------
                      Holder's Address:
                                         ---------------------------------------

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

Signature Guaranteed:

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.

<PAGE>   17

                              CERTIFICATE OF CLERK

     I, the undersigned, do hereby certify:

          1.  That I am the duly elected and acting Clerk of St. Botolph
Holding Company, a Massachusetts corporation; and

          2.  That the foregoing bylaws, comprising 11 pages, constitute the
Bylaws of said corporation as duly adopted by resolutions of the Board of
Directors and shareholders of the Corporation as of February 27, 2001.

     IN WITNESS WHEREOF, I have hereunto subscribed my name as of the 27th day
of February 2001.

                                        ----------------------------
                                        Larry J. Austin<PAGE>   1

                                                                   EXHIBIT 10.18

                         COMMON STOCK PURCHASE AGREEMENT

            This COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is dated as
of February 20, 2001 by and between e-MedSoft.com, a Nevada corporation (the
"Company"), and Hoskin International Limited (the "Purchaser").

            WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to Purchaser from
time to time as provided herein, and Purchaser shall purchase, up to $50,000,000
of Common Stock (as defined below) and Warrants (as defined below); and

            WHEREAS, such investments will be made by the Purchaser as statutory
underwriter of a registered indirect primary offering of such Common Stock by
the Company.

            NOW, THEREFORE, in consideration of the foregoing premises, and the
promises and covenants herein contained, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the parties, intending to be
legally bound, hereby agree as follows:

                                    ARTICLE 1

                        PURCHASE AND SALE OF COMMON STOCK

            Section 1.1. Purchase and Sale of Stock. Subject to the terms and
conditions of this Agreement, the Company may sell and issue to the Purchaser
and the Purchaser shall be obligated to purchase from the Company, up to an
aggregate of, $50,000,000 of the Common Stock and the Warrant, subject to the
terms herein.

            Section 1.2. Purchase Price and Initial Closing. The Company agrees
to issue and sell to the Purchaser and, in consideration of and in express
reliance upon the representations, warranties, covenants, terms and conditions
of this Agreement, the Purchaser agrees to purchase that number of the Shares to
be issued in connection with each Draw Down. The delivery of executed documents
under this Agreement and the other agreements referred to herein and the payment
of the fees set forth in Article I of the Escrow Agreement, attached as Exhibit
B hereto, (the "Initial Closing") shall take place at the offices of Epstein
Becker & Green, P.C., 250 Park Avenue, New York, New York 10177 (i) within
fifteen (15) days from the date hereof, or (ii) such other time and place or on
such date as the Purchaser and the Company may agree upon (the "Initial Closing
Date"). Each party shall deliver all documents, instruments and writings
required to be delivered by such party pursuant to this Agreement at or prior to
the Initial Closing.

                                       1
<PAGE>   2

                                    ARTICLE 2

                         REPRESENTATIONS AND WARRANTIES

            Section 2.1. Representation and Warranties of the Company. The
Company hereby makes the following representations and warranties to the
Purchaser as of the date hereof and as of the Initial Closing Date (unless
another date is given hereinbelow, in which case such representation and
warranty shall be as of such other date):

               (a) Organization, Good Standing and Power. The Company is a
        corporation duly incorporated validly existing and in good standing
        under the laws of the State of Nevada and has all requisite corporate
        authority to own, lease and operate its properties and assets and to
        carry on its business as now being conducted. The Company does not have
        any significant subsidiaries (as defined in Regulation S-X) and does not
        own more than fifty percent (50%) of or control any other business
        entity except as set forth in the SEC Documents or Schedule 2.1(a). The
        Company is duly qualified to do business and is in good standing as a
        foreign corporation in every jurisdiction in which the nature of the
        business conducted or property owned by it makes such qualification
        necessary, other than those in which the failure so to qualify would not
        have a Material Adverse Effect.

               (b) Authorization, Enforcement. (i) The Company has the requisite
        corporate power and corporate authority to enter into and perform its
        obligations under the Transaction Documents and to issue the Draw Down
        Shares pursuant to their respective terms, (ii) the execution and
        delivery of the Transaction Documents by the Company and the
        consummation by it of the transactions contemplated hereby and thereby
        have been duly authorized by all necessary corporate action and no
        further consent or authorization of the Company or its Board of
        Directors or stockholders is required, and (iii) the Transaction
        Documents have been duly executed and delivered by the Company and at
        the Initial Closing shall constitute valid and binding obligations of
        the Company enforceable against the Company in accordance with their
        terms, except as such enforceability may be limited by applicable
        bankruptcy, insolvency, reorganization, moratorium, liquidation,
        conservatorship, receivership or similar laws relating to, or affecting
        generally the enforcement of, creditors' rights and remedies or by other
        equitable principles of general application, except that shareholder
        approval is required for issuances of shares of Common Stock issued in
        connection with this Agreement (including the shares of Common Stock
        issuable pursuant to the warrant issued to the Company's investment
        banker, Cappello Capital Corp.) which in the aggregate exceed 19.99% of
        the number of shares of Common Stock outstanding on the Initial Closing
        Date. The Company has duly and validly authorized and reserved for
        issuance shares of Common Stock sufficient in number for the issuance of
        the Draw Down Shares.

               (c) Capitalization. The authorized capital stock of the Company
        consists of 200,000,000 shares of Common Stock of which 78,123,172
        shares were issued and outstanding at the close of business on January
        30, 2001, and 5,000,000 shares of preferred stock, of which no shares
        are outstanding. All of the outstanding shares of the

                                       2
<PAGE>   3

        Company's Common Stock have been duly and validly authorized and are
        fully paid and non-assessable, except as set forth in the SEC Documents.
        Except as set forth in this Agreement and the Registration Rights
        Agreement and as set forth in the SEC Documents, or on Schedule 2.1(c)
        hereto, no shares of Common Stock are entitled to preemptive rights or
        registration rights and there are no outstanding options, warrant,
        scrip, rights to subscribe to, calls or commitments of any character
        whatsoever relating to, or securities or rights convertible into, any
        shares of capital stock of the Company. Furthermore, except as set forth
        in this Agreement and as set forth in the SEC Documents or on Schedule
        2.1(c), there are no contracts, commitments, understandings, or
        arrangements by which the Company is or may become bound to issue
        additional shares of the capital stock of the Company or options,
        securities or rights convertible into shares of capital stock of the
        Company. Except as set forth on Schedule 2.1(c), the Company is not a
        party to, and it has no knowledge of, any agreement restricting the
        voting or transfer of any shares of the capital stock of the Company.
        Except as set forth in the SEC Documents or on Schedule 2.1(c) hereto,
        the offer and sale of all capital stock, convertible securities, rights,
        warrants, or options of the Company issued prior to the Initial Closing
        complied with all applicable federal and state securities laws, and no
        stockholder has a right of rescission or damages with respect thereto
        which would have a Material Adverse Effect on the Company's financial
        condition or operating results. The Company has made available to the
        Purchaser true and correct copies of the Company's articles or
        certificate of incorporation as in effect on the date hereof (the
        "Charter"), and the Company's bylaws as in effect on the date hereof
        (the "Bylaws"). The Company has not received any notice from the
        Principal Market questioning or threatening the continued inclusion of
        the Common Stock on such market.

               (d) Issuance of Shares. The Shares to be issued under this
        Agreement have been duly authorized by all necessary corporate action
        and, when paid for and issued in accordance with the terms hereof and
        the Warrant, the Shares shall be validly issued and outstanding, fully
        paid and non-assessable, and the Purchaser shall be entitled to all
        rights accorded to a holder of Common Stock, except Shares which,
        together with the Common Stock issuable to the Company's investment
        banker, Cappello Capital Corp. in connection with this transaction,
        would result in the issuance of an aggregate number of shares of Common
        Stock which exceeds 19.99% of the number of shares of Common Stock
        issued and outstanding on the Initial Closing Date.

               (e) No Conflicts. Except as set forth on Schedule 2.1(e), the
        execution, delivery and performance of this Agreement by the Company and
        the consummation by the Company of the transactions contemplated herein
        do not and will not (i) violate any provision of the Company's Charter
        or Bylaws, (ii) conflict with, or constitute a default (or an event
        which with notice or lapse of time or both would become a default)
        under, or give to others any rights of termination, amendment,
        acceleration or cancellation of, any agreement, mortgage, deed of trust,
        indenture, note, bond, license, lease agreement, instrument or
        obligation to which the Company is a party, (iii) create or impose a
        lien, charge or encumbrance on any property of the Company under any
        agreement or any commitment to which the Company is a party or by which
        the Company is bound or by which any of its respective properties or
        assets are bound, or (iv) result in a violation of

                                       3
<PAGE>   4

        any federal, state, local or other foreign statute, rule, regulation,
        order, judgment or decree (including any federal or state securities
        laws and regulations) applicable to the Company or any of its
        subsidiaries or by which any property or asset of the Company or any of
        its subsidiaries are bound or affected, except, in all cases, for such
        conflicts, defaults, termination, amendments, accelerations,
        cancellations and violations as would not, individually or in the
        aggregate, have a Material Adverse Effect. The business of the Company
        and its subsidiaries is not being conducted in violation of any laws,
        ordinances or regulations of any governmental entity, except for
        possible violations which singularly or in the aggregate do not and will
        not have a Material Adverse Effect. The Company is not required under
        any federal, state or local law, rule or regulation to obtain any
        consent, authorization or order of, or make any filing or registration
        with, any court or governmental agency in order for it to execute,
        deliver or perform any of its obligations under this Agreement, or issue
        and sell the Shares in accordance with the terms hereof (other than any
        filings which may be required to be made by the Company with the SEC or
        state securities administrators subsequent to the Initial Closing and
        any registration statement which may be filed pursuant hereto); provided
        that, for purpose of the representation made in this sentence, the
        Company is assuming and relying upon the accuracy of the relevant
        representations and agreements of the Purchaser herein.

               (f) SEC Documents, Financial Statements. The Common Stock of the
        Company is registered pursuant to Section 12(g) of the Exchange Act,
        and, except as disclosed in the SEC Documents or on Schedule 2.1(f)
        hereto, the Company has timely filed all reports, schedules, forms,
        statements and other documents required to be filed by it with the SEC
        pursuant to the reporting requirements of the Exchange Act, including
        material filed pursuant to Section 13(a) or 15(d) of the Exchange Act
        (all of the foregoing including filings incorporated by reference
        therein being referred to herein as the "SEC Documents"). The Company
        has delivered or made available to the Purchaser, through the EDGAR
        system or otherwise, true and complete copies of the SEC Documents filed
        with the SEC since December 31, 1998. As of their respective filing
        dates, the SEC Documents complied in all material respects with the
        requirements of the Exchange Act or the Securities Act, as applicable,
        and the rules and regulations of the SEC promulgated thereunder
        applicable to such documents, and, as of their respective filing dates,
        none of the SEC Documents contained any untrue statement of a material
        fact or omitted to state a material fact required to be stated therein
        or necessary in order to make the statements therein, in light of the
        circumstances under which they were made, not misleading. The financial
        statements of the Company included in the SEC Documents comply as to
        form in all material respects with applicable accounting requirements
        under GAAP and the published rules and regulations of the SEC or other
        applicable rules and regulations with respect thereto. Such financial
        statements have been prepared in accordance with GAAP applied on a
        consistent basis during the periods involved (except (i) as may be
        otherwise indicated in such financial statements or the notes thereto or
        (ii) in the case of unaudited interim statements, to the extent they may
        not include footnotes or may be condensed or summary statements), and
        fairly present in all material respects the financial position of the
        Company and its subsidiaries as of the dates thereof and the results of
        operations and

                                       4
<PAGE>   5

        cash flows for the periods then ended (subject, in the case of unaudited
        statements, to normal year-end audit adjustments).

               (g) Subsidiaries. The SEC Documents or Schedule 2.1(g) hereto
        sets forth each subsidiary of the Company, showing the jurisdiction of
        its incorporation or organization and showing the percentage of the
        Company's ownership of the outstanding stock or other interests of such
        subsidiary. For the purposes of this Agreement, "subsidiary" shall mean
        any corporation or other entity of which at least a majority of the
        securities or other ownership interests having ordinary voting power
        (absolutely or contingently) for the election of directors or other
        persons performing similar functions are at the time owned directly or
        indirectly by the Company and/or any of its other subsidiaries. All of
        the issued and outstanding shares of capital stock of each subsidiary
        have been duly authorized and validly issued, and are fully paid and
        non-assessable. There are no outstanding preemptive, conversion or other
        rights, options, warrants or agreements granted or issued by or binding
        upon any subsidiary for the purchase or acquisition of any shares of
        capital stock of any subsidiary or any other securities convertible
        into, exchangeable for or evidencing the rights to subscribe for any
        shares of such capital stock. Neither the Company nor any subsidiary is
        subject to any obligation (contingent or otherwise) to repurchase or
        otherwise acquire or retire any shares of the capital stock of any
        subsidiary or any convertible securities, rights, warrants or options of
        the type described in the preceding sentence. Neither the Company nor
        any subsidiary is a party to, nor has any knowledge of, any agreement
        restricting the voting or transfer of any shares of the capital stock of
        any subsidiary.

               (h) No Material Adverse Effect. Since the date of the financial
        statement contained in the most recently filed Form 10-Q (or 10-QSB) or
        Form 10-K (or 10-KSB), whichever is most current, no Material Adverse
        Effect has occurred or exists with respect to the Company, except as
        disclosed in the SEC Documents or on Schedule 2.1(h) hereto.

               (i) No Undisclosed Liabilities. Except as disclosed in the SEC
        Documents or on Schedule 2.1(i) hereto, neither the Company nor any of
        its subsidiaries has any liabilities, obligations, claims or losses
        (whether liquidated or unliquidated, secured or unsecured, absolute,
        accrued, contingent or otherwise) that would be required to be disclosed
        on a balance sheet of the Company or any subsidiary (including the notes
        thereto) in conformity with GAAP which are not disclosed in the SEC
        Documents, other than those incurred in the ordinary course of the
        Company's or its subsidiaries' respective businesses since such date and
        which, individually or in the aggregate, do not or would not have a
        Material Adverse Effect on the Company or its subsidiaries.

               (j) No Undisclosed Events or Circumstances. Since the date of the
        financial statement contained in the most recently filed Form 10- Q (or
        10-QSB) or Form 10-K (or 10-KSB), whichever is most current, no event or
        circumstance has occurred or exists with respect to the Company or its
        businesses, properties, prospects, operations or financial condition,
        that, under applicable securities law, rule or regulation, requires
        public disclosure or announcement prior to the date hereof by the
        Company but which has not been so publicly announced or disclosed in the
        SEC Documents.

                                       5
<PAGE>   6

               (k) Indebtedness. The SEC Documents or Schedule 2.1(k) hereto
        sets forth as of the date hereof all outstanding secured and unsecured
        Indebtedness of the Company or any subsidiary, or for which the Company
        or any subsidiary has commitments. For the purposes of this Agreement,
        "Indebtedness" shall mean (A) any liabilities for borrowed money or
        amounts owed in excess of $250,000 (other than trade accounts payable
        incurred in the ordinary course of business), (B) all guaranties,
        endorsements and contingent obligations in respect of Indebtedness of
        others, whether or not the same are or should be reflected in the
        Company's balance sheet (or the notes thereto), except guaranties by
        endorsement of negotiable instruments for deposit or collection or
        similar transactions in the ordinary course of business; and (C) the
        present value of any lease payments in excess of $250,000 due under
        leases required to be capitalized in accordance with GAAP. Neither the
        Company nor any subsidiary is in default with respect to any
        Indebtedness.

               (l) Title to Assets. Each of the Company has good and marketable
        title to all of its real and personal property reflected in the SEC
        Documents, free of any mortgages, pledges, charges, liens, security
        interests or other encumbrances, except for those indicated in the SEC
        Documents or on Schedule 2.1(1) hereto or such that do not cause a
        Material Adverse Effect. All said leases of the Company are valid and
        subsisting and in full force and effect.

               (m) Actions Pending. There is no action, suit, claim,
        investigation or proceeding pending or, to the knowledge of the Company,
        threatened against the Company or any subsidiary which questions the
        validity of this Agreement or the transactions contemplated hereby or
        any action taken or to be taken pursuant hereto or thereto. Except as
        set forth in the SEC Documents or on Schedule 2.1(m) hereto, there is no
        action, suit, claim, investigation or proceeding pending or, to the
        knowledge of the Company, threatened, against or involving the Company,
        any subsidiary or any of their respective properties or assets. There
        are no outstanding orders, judgments, injunctions, awards or decrees of
        any court, arbitrator or governmental or regulatory body against the
        Company or any subsidiary.

               (n) Compliance with Law. The Company and each of its subsidiaries
        have all franchises, permits, licenses, consents and other governmental
        or regulatory authorizations and approvals necessary for the conduct of
        their respective businesses as now being conducted by them unless the
        failure to possess such franchises, permits, licenses, consents and
        other governmental or regulatory authorizations and approvals,
        individually or in the aggregate, could not reasonably be expected to
        have a Material Adverse Effect.

               (o) Taxes. The Company and each subsidiary has filed all Tax
        Returns which it is required to file under applicable laws; all such Tax
        Returns are true and accurate and have been prepared in compliance with
        all applicable laws; the Company has paid all Taxes due and owing by it
        or any subsidiary (whether or not such Taxes are required to be shown on
        a Tax Return) and has withheld and paid over to the appropriate taxing
        authorities all Taxes which it is required to withhold from amounts paid
        or owing

                                       6
<PAGE>   7

        to any employee, stockholder, creditor or other third parties; and since
        December 31, 1999, the charges, accruals and reserves for Taxes with
        respect to the Company (including any provisions for deferred income
        taxes) reflected on the books of the Company are adequate to cover any
        Tax liabilities of the Company if its current tax year were treated as
        ending on the date hereof.

               No claim has been made by a taxing authority in a jurisdiction
        where the Company does not file tax returns that the Company or any
        subsidiary is or may be subject to taxation by that jurisdiction. There
        are no foreign, federal, state or local tax audits or administrative or
        judicial proceedings pending or being conducted with respect to the
        Company or any subsidiary; no information related to Tax matters has
        been requested by any foreign, federal, state or local taxing authority;
        and, except as disclosed above, no written notice indicating an intent
        to open an audit or other review has been received by the Company or any
        subsidiary from any foreign, federal, state or local taxing authority.
        There are no material unresolved questions or claims concerning the
        Company's Tax liability. The Company (A) has not executed or entered
        into a closing agreement pursuant to Section 7121 of the Internal
        Revenue Code or any predecessor provision thereof or any similar
        provision of state, local or foreign law; and (B) has not agreed to or
        is required to make any adjustments pursuant to Section 481 (a) of the
        Internal Revenue Code or any similar provision of state, local or
        foreign law by reason of a change in accounting method initiated by the
        Company or any of its subsidiaries or has any knowledge that the IRS has
        proposed any such adjustment or change in accounting method, or has any
        application pending with any taxing authority requesting permission for
        any changes in accounting methods that relate to the business or
        operations of the Company. The Company has not been a United States real
        property holding corporation within the meaning of Section 897(c)(2) of
        the Internal Revenue Code during the applicable period specified in
        Section 897(c)(1)(A)(ii) of the Internal Revenue Code.

               The Company has not made an election under Section 341(f) of the
        Internal Revenue Code. The Company is not liable for the Taxes of
        another person that is not a subsidiary of the Company under (A) Treas.
        Reg. Section 1.1502-6 (or comparable provisions of state, local or
        foreign law), (B) as a transferee or successor, (C) by contract or
        indemnity or (D) otherwise. The Company is not a party to any tax
        sharing agreement.

               For purposes of this Section 2.1(o):

               "IRS" means the United States Internal Revenue Service.

               "Tax" or "Taxes" means federal, state, county, local, foreign, or
        other income, gross receipts, ad valorem, franchise, profits, sales or
        use, transfer, registration, excise, utility, environmental,
        communications, real or personal property, capital stock, license,
        payroll, wage or other withholding, employment, social security,
        severance, stamp, occupation, alternative or add-on minimum, estimated
        and other taxes of any kind whatsoever (including, without limitation,
        deficiencies, penalties, additions to tax, and interest attributable
        thereto) whether disputed or not.

                                       7
<PAGE>   8

               "Tax Return" means any return, information report or filing with
        respect to Taxes, including any schedules attached thereto and including
        any amendment thereof.

               (p) Certain Fees. Except as set forth on Schedule 2.1(p) hereto,
        no brokers, finders or financial advisory fees or commissions will be
        payable by the Company or any subsidiary with respect to the
        transactions contemplated by this Agreement.

               (q) Disclosure. To the best of the Company's knowledge, neither
        this Agreement or the Schedules hereto nor any other documents,
        certificates or instruments furnished to the Purchaser by or on behalf
        of the Company or any subsidiary in connection with the transactions
        contemplated by this Agreement contains any untrue statement of a
        material fact or omits to state a material fact necessary in order to
        make the statements made herein or therein, in the light of the
        circumstances under which they were made herein or therein, not
        misleading.

               (r) Operation of Business. The Company and/or its subsidiaries
        each own or possess patents, trademarks, service marks, trade names,
        copyrights, licenses and authorizations as are set forth in the SEC
        Documents or on Schedule 2.1(r), and as are necessary to conduct its
        businesses as now conducted, and is not aware of any infringement by it,
        or conflict with asserted rights of others that, in any such case, if
        determined adversely to the Company or its subsidiaries would,
        individually or in the aggregate, have a Material Adverse Effect.

               (s) Insurance. Except as disclosed in the SEC Documents or on
        Schedule 2.1(s) hereto, the Company carries or will have the benefit of
        insurance in such amounts and covering such risks as is adequate for the
        conduct of its business and the value of its properties and as is
        customary for companies engaging in similar businesses and similar
        industries.

               (t) Books and Records. The records and documents of the Company
        and its subsidiaries accurately reflect in all material respects the
        information relating to the business of the Company and the
        subsidiaries, the location and collection of their assets, and the
        nature of all transactions giving rise to the obligations or accounts
        receivable of the Company or any subsidiary.

               (u) Material Agreements. Except as set forth in the SEC
        Documents, or on Schedule 2.1(u) hereto, neither the Company nor any
        subsidiary is a party to any written or oral contract, instrument,
        agreement, commitment, obligation, plan or arrangement, a copy of which
        would be required to be filed with the SEC as an exhibit to a
        registration statement on Form S-1 or other applicable form
        (collectively, "Material Agreements") if the Company or any subsidiary
        were registering securities under the Securities Act. Except as set
        forth on Schedule 2.1(u), the Company and each of its subsidiaries has
        in all material respects performed all the obligations required to be
        performed by them to date under the foregoing agreements, have received
        no notice of default and, to the best of the Company's knowledge are not
        in default under any Material

                                       8
<PAGE>   9

        Agreement now in effect, the result of which could cause a Material
        Adverse Effect. Except as set forth in the SEC Documents, no written or
        oral contract, instrument, agreement, commitment, obligation, plan or
        arrangement of the Company or of any subsidiary limits or shall limit
        the payment of dividends on the Company's Common Stock.

               (v) Transactions with Affiliates. To our knowledge, except as set
        forth in the SEC Documents or on Schedule 2.1(v) hereto, there are no
        loans, leases, agreements, contracts, royalty agreements, management
        contracts or arrangements or other continuing transactions exceeding
        $100,000 between (A) the Company, any subsidiary or any of their
        respective customers or suppliers on the one hand, and (B) on the other
        hand, any officer, employee, consultant or director of the Company, or
        any of its subsidiaries, or any person owning 5% or more of the capital
        stock of the Company or any subsidiary or any member of the immediate
        family of such officer, employee, consultant, director or stockholder or
        any corporation or other entity controlled by such officer, employee,
        consultant, director or stockholder, or a member of the immediate family
        of such officer, employee, consultant, director or stockholder.

               (w) Securities Laws. The Company has complied and will comply
        with all applicable federal and state securities laws in connection with
        the offer, issuance and sale of the Shares hereunder. Neither the
        Company nor anyone acting on its behalf, directly or indirectly, has or
        will sell, offer to sell or solicit offers to buy the Shares or similar
        securities to, or solicit offers with respect thereto from, or enter
        into any preliminary conversations or negotiations relating thereto
        with, any person (other than the Purchaser), so as to bring the issuance
        and sale of the Shares under the registration provisions of the
        Securities Act and applicable state securities laws. Neither the Company
        nor any of its affiliates, nor any person acting on its or their behalf,
        has engaged in any form of general solicitation or general advertising
        (within the meaning of Regulation D under the Securities Act) in
        connection with the offer or sale of the Shares.

               (x) Employees. Neither the Company nor any subsidiary, except for
        a breach which would not, individually or in the aggregate, have a
        Material Adverse Effect, has any collective bargaining arrangements or
        agreements covering any of its employees. Except as set forth in the SEC
        Documents or on Schedule 2.1(x) hereto, neither the Company nor any
        subsidiary is in breach of any employment contract, agreement regarding
        proprietary information, noncompetition agreement, nonsolicitation
        agreement, confidentiality agreement, or any other similar contract or
        restrictive covenant, relating to the right of any officer, employee or
        consultant to be employed or engaged by the Company or such subsidiary.
        Since the date of the December 31, 1999 Form 10-K (or 10-KSB), no
        officer, consultant or key employee of the Company or any subsidiary
        whose termination, either individually or in the aggregate, could have a
        Material Adverse Effect, has terminated or, to the knowledge of the
        Company, has any present intention of terminating his or her employment
        or engagement with the Company or any subsidiary.

                                       9
<PAGE>   10

               (y) Absence of Certain Developments. Except as disclosed in SEC
        Documents or on Schedule 2.1(y) hereto, since the date of the financial
        statement contained in the most recently filed Form 10-Q (or 10-QSB) or
        Form 10-K (or 10KSB), whichever is most current, neither the Company nor
        any subsidiary has:

                   (i) issued any stock, bonds or other corporate securities or
               any rights, options or warrants with respect thereto;

                   (ii)borrowed any amount or incurred or become subject to any
               liabilities (absolute or contingent) except current liabilities
               incurred in the ordinary course of business which are comparable
               in nature and amount to the current liabilities incurred in the
               ordinary course of business during the comparable portion of its
               prior fiscal year, as adjusted to reflect the current nature and
               volume of the Company's or such subsidiary's business;

                   (iii)discharged or satisfied any lien or encumbrance or paid
               any obligation or liability (absolute or contingent), other than
               current liabilities paid in the ordinary course of business;

                   (iv)declared or made any payment or distribution of cash or
               other property to stockholders with respect to its stock, or
               purchased or redeemed, or made any agreements so to purchase or
               redeem, any shares of its capital stock;

                   (v)sold, assigned or transferred any other tangible assets,
               or canceled any debts or claims, except in the ordinary course of
               business;

                   (vi)sold, assigned or transferred any patent rights,
               trademarks, trade names, copyrights, trade secrets or other
               intangible assets or intellectual property rights, or disclosed
               any proprietary confidential information to any person except
               pursuant to the Company's standard confidentiality agreements, to
               customers in the ordinary course of business or to the Purchaser
               or its representatives;

                   (vii)suffered any material losses (except for anticipated
               losses consistent with prior quarters) or waived any rights of
               material value, whether or not in the ordinary course of
               business, or suffered the loss of any material amount of
               prospective business;

                   (viii)made any changes in employee compensation except in the
               ordinary course of business and consistent with past practices;

                   (ix)made capital expenditures or commitments therefor that
               aggregate in excess of $500,000;

                   (x)entered into any other material transaction, whether or
               not in the ordinary course of business;

                                       10
<PAGE>   11

                   (xi)suffered any material damage, destruction or casualty
               loss, whether or not covered by insurance;

                   (xii)experienced any material problems with labor or
               management in connection with the terms and conditions of their
               employment; or

                   (xiii)effected any two or more events of the foregoing kind
               which in the aggregate would be material to the Company or its
               subsidiaries.

               (z) Governmental Approvals. Except as set forth in the SEC
        Documents or on Schedule 2.1(z) hereto, and except for the filing of any
        notice prior or subsequent to any Settlement Date that may be required
        under applicable federal or state securities laws (which if required,
        shall be filed on a timely basis), including the filing of a
        registration statement or post-effective amendment pursuant to this
        Agreement, no authorization, consent, approval, license, exemption of,
        filing or registration with any court or governmental department,
        commission, board, bureau, agency or instrumentality, domestic or
        foreign, is or will be necessary for, or in connection with, the
        delivery of the Shares, or for the performance by the Company of its
        obligations under this Agreement.

               (aa) Acknowledgment Regarding Purchaser's Purchase of Shares.
        Company acknowledges and agrees that Purchaser is acting solely in the
        capacity of arm's length purchaser with respect to this Agreement and
        the transactions contemplated hereunder. The Company further
        acknowledges that the Purchaser is not acting as a financial advisor or
        fiduciary of the Company (or in any similar capacity) with respect to
        this Agreement and the transactions contemplated hereunder. The Company
        further represents to the Purchaser that the Company's decision to enter
        into this Agreement has been based solely on (a) the Purchaser's
        representations and warranties in Section 3.2, and (b) the independent
        evaluation by the Company and its own representatives and counsel.

            Section 2.2. Representations and Warranties of the Purchaser. The
Purchaser hereby makes the following representations and warranties to the
Company as of the date hereof and as of the Initial Closing Date:

               (a) Organization and Standing of the Purchaser. The Purchaser is
        a corporation duly incorporated, validly existing and in good standing
        under the laws of the British Virgin Islands and resides at Harbour
        House, 2nd Floor, Waterfront Drive, Road Town, Tortola, British Virgin
        Islands.

               (b) Authorization and Power. The Purchaser has the requisite
        power and authority to enter into and perform the Transaction Documents
        and to purchase the Shares being sold to it hereunder. The execution,
        delivery and performance of the Transaction Documents by Purchaser and
        the consummation by it of the transactions contemplated hereby have been
        duly authorized by all necessary corporate action and at the Initial
        Closing shall constitute valid and binding obligations of the Purchaser
        enforceable against the Purchaser in accordance with their terms, except
        as such enforceability may be

                                       11
<PAGE>   12

        limited by applicable bankruptcy, insolvency, reorganization,
        moratorium, liquidation, conservatorship, receivership or similar laws
        relating to, or affecting generally the enforcement of, creditors'
        rights and remedies or by other equitable principles of general
        application

               (c) No Conflicts. The execution, delivery and performance of this
        Agreement and the consummation by the Purchaser of the transactions
        contemplated hereby or relating hereto do not and will not (i) result in
        a violation of the Purchaser's charter documents or bylaws or (ii)
        conflict with, or constitute a default (or an event which with notice or
        lapse of time or both would become a default) under, or give to others
        any rights of termination, amendment, acceleration or cancellation of
        any agreement, indenture or instrument to which the Purchaser is a
        party, or result in a violation of any law, rule, or regulation, or any
        order, judgment or decree of any court or governmental agency applicable
        to the Purchaser or its properties (except for such conflicts, defaults
        and violations as would not, individually or in the aggregate, have a
        Material Adverse Effect on Purchaser). The Purchaser is not required to
        obtain any consent, authorization or order of, or make any filing or
        registration with, any court or governmental agency in order for it to
        execute, deliver or perform any of its obligations under this Agreement
        or to purchase the Shares in accordance with the terms hereof.

               (d) Financial Risks. The Purchaser acknowledges that it is able
        to bear the financial risks associated with an investment in the Shares
        and that it has been given full access to such records of the Company
        and the subsidiaries and to the officers of the Company and the
        subsidiaries as it has deemed necessary or appropriate to conduct its
        due diligence investigation. The Purchaser is capable of evaluating the
        risks and merits of an investment in the Shares by virtue of its
        experience as an investor and its knowledge, experience, and
        sophistication in financial and business matters and the Purchaser is
        capable of bearing the entire loss of its investment in the Shares.

               (e) Accredited Investor. The Purchaser is an "accredited
        investor" as defined in Regulation D promulgated under the Securities
        Act.

               (f) General. The Purchaser understands that the Company is
        relying upon the truth and accuracy of the representations, warranties,
        agreements, acknowledgments and understandings of the Purchaser set
        forth herein in order to determine the suitability of the Purchaser to
        acquire the Shares.

                                    ARTICLE 3

                                    COVENANTS

            The Company covenants with the Purchaser as follows:

                                       12
<PAGE>   13

            Section 3.1. The Shares. As of the date of each applicable Draw
Down, the Company will have authorized and reserved, free of preemptive rights
and other similar contractual rights of stockholders, a sufficient number of its
authorized but unissued shares of its Common Stock to cover the Shares to be
issued in connection with such Draw Down requested under this Agreement.
Anything in this Agreement to the contrary notwithstanding, (i) at no time will
the Company request a Draw Down which would result in the issuance of an
aggregate number of shares of Common Stock pursuant to this Agreement which
exceeds 19.9% of the number of shares of Common Stock issued and outstanding on
the Initial Closing Date without obtaining stockholder approval of such excess
issuance, or such other amount as would require stockholder approval under rules
of the Principal Market or otherwise without obtaining stockholder approval of
such excess issuance, and (ii) the Company may not make a Draw Down to the
extent that, after such purchase by the Purchaser, the sum of the number of
shares of Common Stock beneficially owned by the Purchaser and its affiliates
would result in beneficial ownership by the Purchaser and its affiliates of more
than 9.9% of the then outstanding shares of Common Stock. For purposes of the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act.

            Section 3.2. Securities Compliance. If applicable, the Company shall
notify the Principal Market, in accordance with its rules and regulations, of
the transactions contemplated by this Agreement, and shall take all other
necessary action and proceedings as may be required and permitted by applicable
law, rule and regulation, for the legal and valid issuance of the Shares and the
Warrant to the Purchaser or subsequent holders.

            Section 3.3. Registration and Listing. The Company will cause its
Common Stock to continue to be registered under Sections 12(b) or 12(g) of the
Exchange Act, will comply in all respects with its reporting and filing
obligations under the Exchange Act, will comply with all requirements related to
any registration statement filed pursuant to this Agreement, and will not take
any action or file any document (whether or not permitted by the Securities Act
or the Exchange Act or the rules promulgated thereunder) to terminate or suspend
such registration or to terminate or suspend its reporting and filing
obligations under the Exchange Act or Securities Act, except as permitted
herein. The Company will take all action necessary to continue the listing or
trading of its Common Stock on the Principal Market and will comply in all
respects with the Company's reporting, filing and other obligations under the
bylaws or rules of the Principal Market and shall provide the Purchaser with
copies of any correspondence to or from such Principal Market which questions or
threatens delisting of the Common Stock, within three (3) Trading Days of the
Company's receipt thereof, until the Purchaser has disposed of all of the
Shares.

            Section 3.4. Escrow Arrangement. The Company and the Purchaser shall
enter into an escrow arrangement with Epstein Becker & Green, P.C. (the "Escrow
Agent") in the form of Exhibit B hereto respecting payment against delivery of
the Shares.

            Section 3.5. Registration Rights Agreement. The Company and the
Purchaser shall enter into the Registration Rights Agreement in the Form of
Exhibit A hereto. Before the Purchaser shall be obligated to accept a Draw Down
request from the Company, the Company

                                       13
<PAGE>   14

shall have caused a sufficient number of shares of Common Stock to be registered
to cover the Shares to be issued in connection with such Draw Down.

            Section 3.6. Accuracy of Registration Statement. On each Settlement
Date, the Registration Statement and the prospectus therein shall not contain
any untrue statement of a material fact or omit to state any material fact to be
required to be stated therein or necessary in order to make the statements
therein not misleading in light of the circumstances under which they were made;
and on such Settlement Date or date of filing of the Registration Statement and
the prospectus therein will not include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, the Company makes no representations or
warranties as to the information contained in or omitted from the Registration
Statement and the prospectus therein in reliance upon and in conformity with the
information furnished in writing to the Company by the Purchaser specifically
for inclusion in the Registration Statement and the prospectus therein.

            Section 3.7. Compliance with Laws. The Company shall comply, and
cause each subsidiary to comply, with all applicable laws, rules, regulations
and orders, noncompliance with which could have a Material Adverse Effect.

            Section 3.8. Keeping of Records and Books of Account. The Company
shall keep and cause each subsidiary to keep adequate records and books of
account, in which complete entries will be made in accordance with GAAP
consistently applied, reflecting all financial transactions of the Company and
its subsidiaries, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection with its business shall be made.

            Section 3.9. Other Agreements. The Company shall not enter into any
agreement the terms of which such agreement would restrict or impair the ability
of the Company to perform its obligations under this Agreement.

            Section 3.10. Notice of Certain Events Affecting Registration;
Suspension of Right to Request a Draw Down. THE COMPANY WILL IMMEDIATELY NOTIFY
THE PURCHASER UPON THE OCCURRENCE OF ANY OF THE FOLLOWING EVENTS IN RESPECT OF
THE REGISTRATION STATEMENT OR RELATED PROSPECTUS IN RESPECT OF THE SHARES: (i)
receipt of any request for additional information from the SEC or any other
federal or state governmental authority during the period of effectiveness of
the Registration Statement the response to which would require any amendments or
supplements to the Registration Statement or related prospectus; (ii) the
issuance by the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose; (iii) receipt of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; (iv) the happening
of any event that makes any statement made in the Registration Statement or
related prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making
of any changes in the Registration Statement, related prospectus or documents so
that, in

                                       14
<PAGE>   15

the case of the Registration Statement, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the related prospectus, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and (v) the Company's reasonable
determination that a post-effective amendment to the Registration Statement
would be appropriate. The Company shall not deliver to the Purchaser any Draw
Down Notice during the continuation of any of the foregoing events. The Company
shall promptly make available to the Purchaser any such supplements or
amendments to the related prospectus, at which time, provided that the
registration statement and any supplements and amendments thereto are then
effective, the Company may recommence the delivery of Draw Down Notices.

            Section 3.11. Consolidation; Merger. The Company shall not, at any
time after the date hereof, effect any merger or consolidation of the Company
with or into, or a transfer of all or substantially all of the assets of the
Company to, another entity (a "Consolidation Event") unless the resulting
successor or acquiring entity (if not the Company) assumes by written instrument
or by operation of law the obligation to deliver to the Purchaser such shares of
stock and/or securities as the Purchaser is entitled to receive pursuant to this
Agreement.

            Section 3.12. Use of Proceeds. The proceeds from the sale of the
Shares will be used by the Company and its subsidiaries for general corporate
purposes.

            The Purchaser covenants with the Company as follows:

            Section 3.13. Compliance with Law. The Purchaser agrees that its
trading activities with respect to shares of the Company's Common Stock will be
in compliance with all applicable state and federal securities laws, rules and
regulations and rules and regulations of the Principal Market on which the
Company's Common Stock is listed. Without limiting the generality of the
foregoing, the Purchaser agrees that it will, whenever required by federal
securities laws, deliver the prospectus included in the Registration Statement
to any purchaser of Shares from the Purchaser.

            Section 3.14. Confidentiality. The Purchaser agrees that it will
keep confidential and will not disclose or divulge any confidential, proprietary
or secret information which it may obtain from the Company pursuant to this
Agreement or the Registration Rights Agreement; provided, however, that the
Purchaser may disclose such information (i) to its attorneys, accountants,
consultants, and other professionals to the extent necessary to obtain their
services in connection with its investment in the Company, or (ii) pursuant to
an order entered by a legal, regulatory or administrative body having the
authority to enter such order; provided, however, that, if practicable, prior to
any such disclosure, the Purchaser shall give the Company prompt notice of such
order so that the Company may seek a protective order to take the other
appropriate legal action to avoid such disclosure.

                                       15
<PAGE>   16

                                    ARTICLE 4

                  CONDITIONS TO INITIAL CLOSING AND DRAW DOWNS

            Section 4.1. Conditions Precedent to the Obligation of the Company
to Sell the Shares. The obligation hereunder of the Company to proceed to close
this Agreement and to issue and sell the Shares to the Purchaser is subject to
the satisfaction or waiver, at or before the Initial Closing, and as of each
Settlement Date of each of the conditions set forth below. These conditions are
for the Company's sole benefit and may be waived by the Company at any time in
its sole discretion.

               (a) Accuracy of the Purchaser's Representations and Warranties.
        The representations and warranties of the Purchaser shall be true and
        correct in all material respects as of the date when made and as of the
        Initial Closing and as of each Settlement Date as though made at that
        time, except for representations and warranties that speak as of a
        particular date.

               (b) Performance by the Purchaser. The Purchaser shall have
        performed, satisfied and complied in all material respects with all
        material covenants, agreements and conditions required by this Agreement
        to be performed, satisfied or complied with by the Purchaser at or prior
        to the Initial Closing and as of each Settlement Date.

               (c) No Injunction. No statute, rule, regulation, executive order,
        decree, ruling or injunction shall have been enacted, entered,
        promulgated or endorsed by any court or governmental authority of
        competent jurisdiction which prohibits the consummation of any of the
        transactions contemplated by this Agreement.

            Section 4.2. Conditions Precedent to the Obligation of the Purchaser
to Close. The obligation hereunder of the Purchaser to perform its obligations
under this Agreement and to purchase the Shares is subject to the satisfaction
or waiver, at or before the Initial Closing, of each of the conditions set forth
below. These conditions are for the Purchaser's sole benefit and may be waived
by the Purchaser at any time in its sole discretion.

               (a) Accuracy of the Company's Representations and Warranties.
        Each of the representations and warranties of the Company shall be true
        and correct in all material respects as of the date when made and as of
        the Initial Closing as though made at that time (except for
        representations and warranties that speak as of a particular date).

               (b) Performance by the Company. The Company shall have performed,
        satisfied and complied in all respects with all covenants, agreements
        and conditions required by this Agreement to be performed, satisfied or
        complied with by the Company at or prior to the Initial Closing.

               (c) No Injunction. No statute, rule, regulation, executive order,
        decree, ruling or injunction shall have been enacted, entered,
        promulgated or endorsed by any

                                       16
<PAGE>   17

        court or governmental authority of competent jurisdiction which
        prohibits the consummation of any of the transactions contemplated by
        this Agreement.

               (d) No Proceedings or Litigation. No action, suit or proceeding
        before any arbitrator or any governmental authority shall have been
        commenced, and no investigation by any governmental authority shall have
        been threatened, against the Purchaser or the Company or any subsidiary,
        or any of the officers, directors or affiliates of the Company or any
        subsidiary seeking to restrain, prevent or change the transactions
        contemplated by this Agreement, or seeking damages in connection with
        such transactions.

               (e) Opinion of Counsel, Etc. At the Initial Closing, the
        Purchaser shall have received an opinion of counsel to the Company,
        dated as of the Initial Closing Date, in the form of Exhibit C hereto.

               (f) Warrant. On the Initial Closing Date, the Company shall issue
        to the Purchaser a warrant certificate to purchase up to a number of
        shares of Common Stock equal to $1,000,000 divided by the average of the
        closing bid prices during the fifteen (15) Trading Days immediately
        prior to the Initial Closing Date (the "Warrant Base Price"). The
        Warrant shall have a term from its initial exercise date of five (5)
        years. The exercise price of the Warrant shall be 125% of the Warrant
        Base Price. The Common Stock underlying the Warrant will be registered
        in the Registration Statement referred to in Section 4.3 hereof. The
        Warrant shall be in the form of Exhibit E hereto.

            Section 4.3. Conditions Precedent to the Obligation of the Purchaser
to Accept a Draw Down and Purchase the Shares. The obligation hereunder of the
Purchaser to accept a Draw Down request and to acquire and pay for the Shares is
subject to the satisfaction at or before each Settlement Date, of each of the
conditions set forth below.

               (a) Satisfaction of Conditions to Initial Closing. The Company
        shall have satisfied, or the Purchaser shall have waived at the Initial
        Closing, the conditions set forth in Section 5.2 hereof.

               (b) Effective Registration Statement. The Registration Statement
        registering the Shares shall have been declared effective by the SEC and
        shall remain effective on each Settlement Date.

               (c) No Suspension. Trading in the Company's Common Stock shall
        not have been suspended by the SEC or the Principal Market (except for
        any suspension of trading of limited duration agreed to by the Company,
        which suspension shall be terminated prior to the delivery of each Draw
        Down Notice), and, at any time prior to such Draw Down Notice, trading
        in securities generally as reported on the Principal Market shall not
        have been suspended or limited, or minimum prices shall not have been
        established on securities whose trades are reported on the Principal
        Market unless the general suspension or limitation shall have been
        terminated prior to the delivery of such Draw Down Notice.

                                       17
<PAGE>   18

               (d) Material Adverse Effect. No Material Adverse Effect and no
        Consolidation Event where the successor entity has not agreed to perform
        the Company's obligations shall have occurred.

               (e) Opinion of Counsel. The Purchaser shall have received (i) a
        "down-to-date" letter from the Company's counsel, confirming that there
        is no change from the counsel's previously delivered opinion, or else
        specifying with particularity the reason for any change and an opinion
        as to the additional items specified in Exhibit C hereto, and (ii) any
        other items set forth in the Escrow Agreement.

                                    ARTICLE 5

                                 DRAW DOWN TERMS

            Section 5.1. Draw Down Terms. Subject to the satisfaction of the
conditions set forth in this Agreement, the parties agree as follows:

               (a) The Company, may, in its sole discretion, issue and exercise
        a draw down (a "Draw Down") during each Draw Down Pricing Period, which
        Draw Down the Purchaser shall be obligated to accept during the
        Commitment Period.

               (b) Only one Draw Down shall be allowed in each Draw Down Pricing
        Period. There shall be at least five (5) Trading Days between Draw Down
        Pricing Periods. The number of shares of Common Stock purchased by the
        Purchaser with respect to each Draw Down shall be determined as set
        forth in Section 5.1(e) herein and settled on:

                   (i) as to the 1st through the 10th Trading Days after a Draw
               Down Pricing Period commences, on or before the 12th Trading Day
               after a Draw Down Pricing Period commences; and

                   (ii) as to the 11th through the 20th Trading Days after a
               Draw Down Pricing Period commences, on or before the 22nd Trading
               Day after a Draw Down Pricing Period (such settlement periods and
               such settlement dates in subsection (i) and this subsection (ii)
               each referred to as a "Settlement Period" and a "Settlement
               Date", respectively).

               (c) In connection with each Draw Down Pricing Period, the Company
        may set the Threshold Price in the Draw Down Notice.

               (d) The minimum Investment Amount for any Draw Down shall be
        $250,000 and the maximum Investment Amount as to each Draw Down shall be
        8% of the average of the VWAPs for the Common Stock for the sixty (60)
        calendar day period immediately prior to the applicable Commencement
        Date (defined below) multiplied by

                                       18
<PAGE>   19

        the total trading volume in respect of the Common Stock for the sixty
        (60) calendar day period immediately prior to such Commencement Date.

               (e) The number of Shares of Common Stock to be issued on each
        Settlement Date shall be a number of shares equal to the sum of the
        quotients (for each trading day within the Settlement Period) of (x)
        1/20th of the Investment Amount, and (y) the Purchase Price on each
        Trading Day within the Settlement Period, subject to the following
        adjustments:

                   (i) if the VWAP on a given Trading Day is less than the
               Threshold Price, then the Investment Amount will be reduced by
               1/20th and that day shall be withdrawn from the Settlement
               Period; and

                   (ii) if trading of the Common Stock on the Principal Market
               is suspended for more than three (3) hours, in the aggregate, on
               any Trading Day during the Settlement Period, the Investment
               Amount shall be reduced by 1/20th and that day shall be withdrawn
               from the applicable Settlement Period; and

                   (iii) if the Registration Statement is suspended in
               accordance with Section 3(j) of the Registration Rights Agreement
               for more than three (3) hours, in the aggregate, on any Trading
               Day during the applicable Settlement Period, the Investment
               Amount shall be reduced by 1/20th and that day shall be withdrawn
               from such Settlement Period.

               (f) The Company must inform the Purchaser by delivering a draw
        down notice, in the form of Exhibit D hereto (the "Draw Down Notice"),
        via facsimile transmission in accordance with Section 9.4 as to the
        amount of the Draw Down (the "Investment Amount") the Company wishes to
        exercise, before the first day of the Draw Down Pricing Period (the
        "Commencement Date"). If the Commencement Date is to be the date of the
        Draw Down Notice, the Draw Down Notice must be delivered to and receipt
        confirmed by the Purchaser at least one hour before trading commences on
        such date. At no time shall the Purchaser be required to purchase more
        than the maximum Investment Amount for a given Draw Down Pricing Period
        so that if the Company chooses not to exercise the maximum Investment
        Amount in a given Draw Down Pricing Period the Purchaser is not
        obligated to and shall not purchase more than the scheduled maximum
        Investment Amount in a subsequent Draw Down Pricing Period.

               (g) On or before each Settlement Date, the Shares purchased by
        the Purchaser shall be delivered to The Depository Trust Company ("DTC")
        account of the Purchaser or its designees via the Deposit Withdrawal
        Agent Commission ("DWAC") system upon receipt by the Escrow Agent of
        payment for the Draw Down Shares into the Escrow Agent's master escrow
        account, as further provided in the Escrow Agreement. The Escrow Agent
        shall be directed to pay the Purchase Price to the Company, net of one
        thousand dollars ($1,000) per Settlement as escrow expenses to the
        Escrow Agent and any additional fees as set forth in the Escrow
        Agreement.

                                       19
<PAGE>   20

                                    ARTICLE 6

                                   TERMINATION

            Section 6.1. Term. The term of this Agreement shall begin on the
date hereof and shall end 18 months from the Effective Date or as otherwise set
forth in Section 6.2.

            Section 6.2. Other Termination.

               (a) This Agreement shall terminate upon one (1) Trading Day's
        notice if (i) an event resulting in a Material Adverse Effect has
        occurred and has not been cured for a period of 60 days, (ii) the Common
        Stock is de-listed from the Principal Market unless such de-listing is
        in connection with the Company's subsequent listing of the Common Stock
        on the Nasdaq National Market, Nasdaq SmallCap Market, the American
        Stock Exchange or the New York Stock Exchange, or (iii) the Company
        files for protection from creditors under any applicable law.

               (b) The Company may terminate this Agreement upon one (1) Trading
        Day's notice if the Purchaser shall fail to fund one properly noticed
        Draw Down within five (5) Trading Days of the end of the applicable
        Settlement Period.

            Section 6.3. Effect of Termination. In the event of termination by
the Company or the Purchaser, written notice thereof shall forthwith be given to
the other party and the transactions contemplated by this Agreement shall be
terminated without further action by either party. If this Agreement is
terminated as provided in Section 6.1 or 6.2 herein, this Agreement shall become
void and of no further force and effect, except for Sections 8.1 and 8.2, and
Article 7 herein. Nothing in this Section 6.3 shall be deemed to release the
Company or the Purchaser from any liability for any breach under this Agreement,
or to impair the rights of the Company or the Purchaser to compel specific
performance by the other party of its obligations under this Agreement.

                                    ARTICLE 7

                                 INDEMNIFICATION

            Section 7.1. General Indemnity.

               (a) The Company agrees to indemnify and hold harmless the
        Purchaser (and its directors, officers, affiliates, agents, successors
        and assigns) from and against any and all losses, liabilities,
        deficiencies, costs, damages and expenses (including, without
        limitation, reasonable attorneys' fees, charges and disbursements)
        incurred by the Purchaser as a result of any material inaccuracy in or
        breach of the representations, warranties or covenants made by the
        Company herein.

               (b) The Purchaser agrees to indemnify and hold harmless the
        Company and its directors, officers, affiliates, agents, successors and
        assigns from and against any

                                       20
<PAGE>   21

        and all losses, liabilities, deficiencies, costs, damages and expenses
        (including, without limitation, reasonable attorneys' fees, charges and
        disbursements) incurred by the Company as result of any material
        inaccuracy in or breach of the representations, warranties or covenants
        made by the Purchaser herein. Notwithstanding anything to the contrary
        herein, the Purchaser shall be liable under this Section 7.1(b) for only
        that amount as does not exceed the net proceeds to the Purchaser as a
        result of the sale of the Shares.

            Section 7.2. Indemnification Procedure. Any party entitled to
indemnification under this Article 7 (an "Indemnified Party") will give written
notice to the indemnifying party of any matters giving rise to a claim for
indemnification; provided, that the failure of any party entitled to
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Article 7 except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
Indemnified Party in respect of which indemnification is sought hereunder, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of counsel to the Indemnified Party a conflict of interest
between it and the indemnifying party may exist with respect of such action,
proceeding or claim, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. In the event that the indemnifying party
advises an Indemnified Party that it will contest such a claim for
indemnification hereunder, or fails, within thirty (30) days of receipt of any
indemnification notice to notify, in writing, such person of its election to
defend, settle or compromise, at its sole cost and expense, any action,
proceeding or claim (or discontinues its defense at any time after it commences
such defense), then the Indemnified Party may, at its option, defend, settle or
otherwise compromise or pay such action or claim. In any event, unless and until
the indemnifying party elects in writing to assume and does so assume the
defense of any such claim, proceeding or action, the Indemnified Party's costs
(including reasonable attorneys' fees, charges and disbursements) and expenses
arising out of the defense, settlement or compromise of any such action, claim
or proceeding shall be losses subject to indemnification hereunder. The
Indemnified Party shall cooperate fully with the indemnifying party in
connection with any settlement negotiations or defense of any such action or
claim by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the Indemnified Party, which relates to such
action or claim. The indemnifying party shall keep the Indemnified Party fully
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such action or claim, then the Indemnified Party shall be entitled to
participate in such defense with counsel of its choice at its sole cost and
expense. The indemnifying party shall not be liable for any settlement of any
action, claim or proceeding effected without its prior written consent, which
shall not be unreasonably withheld. Notwithstanding anything in this Article 7
to the contrary, the indemnifying party shall not, without the Indemnified
Party's prior written consent, settle or compromise any claim or consent to
entry of any judgment in respect thereof which imposes any future obligation on
the Indemnified Party or which does not include, as an unconditional term
thereof, the giving by the claimant or the plaintiff to the Indemnified Party of
a release from all liability in respect of such claim. The indemnification
required by this Article 7 shall be made by periodic payments of the amount
thereof during the course of investigation or defense, as and

                                       21
<PAGE>   22

when bills are received or expense, loss, damage or liability is incurred,
within ten (10) Trading Days of written notice thereof to the indemnifying party
so long as the Indemnified Party irrevocably agrees to refund such moneys, with
interest, if it is ultimately determined by a court of competent jurisdiction
that such party was not entitled to indemnification. The indemnity agreements
contained herein shall be in addition to (a) any cause of action or similar
rights of the Indemnified Party against the indemnifying party or others, and
(b) any liabilities to which the indemnifying party may be subject.

                                    ARTICLE 8

                                  MISCELLANEOUS

            Section 8.1. Fees and Expenses. Each of the parties to this
Agreement shall pay its own fees and expenses related to the transactions
contemplated by this Agreement; except that, the Company shall pay, at the
Initial Closing, a non-accountable expense allowance of $35,000 for the
Purchaser's legal and administrative costs and expenses, including fees and
expenses relating to the registration of the Shares and transactional costs
associated with the Draw Downs (except the escrow fee). In addition, the Company
shall pay all reasonable fees and expenses incurred by the Purchaser in
connection with any subsequent amendments, modifications or waivers of this
Agreement, the Escrow Agreement or the Registration Rights Agreement or incurred
in connection with the enforcement of this Agreement, the Escrow Agreement and
the Registration Rights Agreement, including, without limitation, all reasonable
attorneys' fees and expenses if such subsequent amendment, modification or
waiver is at the request of the Company. The Company shall pay all stamp or
other similar taxes and duties levied in connection with issuance of the Shares
pursuant hereto.

            Section 8.2. Specific Enforcement. The Company and the Purchaser
acknowledge and agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent or cure
breaches of the provisions of this Agreement and to enforce specifically the
terms and provisions hereof or thereof, this being in addition to any other
remedy to which any of them may be entitled by law or equity.

            Section 8.3. Entire Agreement; Amendment. The Transaction Documents
contain the entire understanding of the parties with respect to the matters
covered in the Transaction Documents. No provision of this Agreement may be
waived or amended other than by a written instrument signed by the party against
whom enforcement of any such amendment or waiver is sought and no condition to
closing any Draw Down in favor of the Purchaser may be waived by the Purchaser.

            Section 8.4. Notices. Except with respect to any Draw Down Notices,
which shall be effective only in accordance with subsection (a) below, any
notice, demand, request, waiver or other communication required or permitted to
be given hereunder shall be in writing and shall be effective (a) upon hand
delivery or facsimile at the address or number designated

                                       22
<PAGE>   23

below (if delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such
notice is to be received), or (b) on the second business day following the date
of mailing by express internationally recognized courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever
shall first occur. The addresses for such communications shall be:

If to the Company:                  1300 Marsh Landing Parkway, Suite 106
                                    Jacksonville, FL 32250
                                    Attn:  John Andrews
                                    Tel: (904) 543-1000
                                    Fax: (904) 543-1071

With copies to:                     Manatt, Phelps & Phillips, LLP
(which shall not constitute         11355 Olympic Blvd.
notice)                             Los Angeles, CA 94304
                                    Attn: Gordon Bava, Esq.
                                    Tel: (310) 312-4000
                                    Fax:  (310) 312-4224

If to Purchaser:                    c/o Beacon Capital Management
                                    Harbour House, 2nd Floor
                                    Waterfront Drive
                                    Road Town, Tortola
                                    British Virgin Islands
                                    Attn: David Sims
                                    Fax: (284) 494-4090

with copies to:                     Epstein Becker & Green P.C.
(which shall not constitute         250 Park Avenue
notice)                             New York, NY  10177-1211
                                    Tel:  (212) 351-3771
                                    Fax:  (212) 661-0989
                                    Attn:  Robert F. Charron

            Any party hereto may from time to time change its address for
notices by giving written notice of such changed address to the other party
hereto in accordance herewith.

            Section 8.5. Waivers. No waiver by either party of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provisions, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.

                                       23
<PAGE>   24

            Section 8.6. Headings. The article, section and subsection headings
in this Agreement are for convenience only and shall not constitute a part of
this Agreement for any other purpose and shall not be deemed to limit or affect
any of the provisions hereof.

            Section 8.7. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
The parties hereto may not amend this Agreement or any rights or obligations
hereunder without the prior written consent of the Company and each Purchaser to
be affected by the amendment. After Initial Closing, the assignment by a party
to this Agreement of any rights hereunder shall not affect the obligations of
such party under this Agreement.

            Section 8.8. No Third Party Beneficiaries.This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.

            Section 8.9. Governing Law/Arbitration. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
California, without giving effect to the choice of law provisions. The Company
and the Purchaser agree to submit themselves to the in personam jurisdiction of
the state and federal courts situated within the the State of California with
regard to any controversy arising out of or relating to this Agreement. Any
dispute under this Agreement or any Exhibit attached hereto shall be submitted
to arbitration under the commercial rules of the American Arbitration
Association (the "AAA") in San Francisco, California, and shall be finally and
conclusively determined by the decision of a board of arbitration consisting of
three (3) members (hereinafter referred to as the "Board of Arbitration")
selected as according to the rules governing the AAA. The Board of Arbitration
shall meet on consecutive business days in San Francisco, California, and shall
reach and render a decision in writing (concurred in by a majority of the
members of the Board of Arbitration) with respect to the amount, if any, which
the losing party is required to pay to the other party in respect of a claim
filed. In connection with rendering its decisions, the Board of Arbitration
shall adopt and follow the laws of the State of California. To the extent
practical, decisions of the Board of Arbitration shall be rendered no more than
thirty (30) calendar days following commencement of proceedings with respect
thereto. The Board of Arbitration shall cause its written decision to be
delivered to all parties involved in the dispute. The Board of Arbitration shall
be authorized and is directed to enter a default judgment against any party
refusing to participate in the arbitration proceeding within thirty days of any
deadline for such participation. Any decision made by the Board of Arbitration
(either prior to or after the expiration of such thirty (30) calendar day
period) shall be final, binding and conclusive on the parties to the dispute,
and entitled to be enforced to the fullest extent permitted by law and entered
in any court of competent jurisdiction. The prevailing party shall be awarded
its costs, including attorneys' fees, from the non-prevailing party as part of
the arbitration award. Any party shall have the right to seek injunctive relief
from any court of competent jurisdiction in any case where such relief is
available. The prevailing party in such injunctive action shall be awarded its
costs, including reasonable attorneys' fees, from the non-prevailing party.

            Section 8.10. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and shall become effective when counterparts have been signed by
each party and delivered to the other

                                       24
<PAGE>   25

parties hereto, it being understood that all parties need not sign the same
counterpart. Execution may be made by delivery by facsimile.

            Section 8.11. Publicity. Neither the Company nor the Purchaser shall
issue any press release or otherwise make any public statement or announcement
with respect to this Agreement or the transactions contemplated hereby or the
existence of this Agreement. After the Initial Closing, the Company may issue a
press release or otherwise make a public statement or announcement with respect
to this Agreement or the transactions contemplated hereby or the existence of
this Agreement; provided, however, that prior to issuing any such press release,
making any such public statement or announcement, the Company obtains the prior
consent of the Purchaser, which consent shall not be unreasonably withheld or
delayed.

            Section 8.12. Severability. The provisions of this Agreement are
severable and, in the event that The Board of Arbitration or any court or
officials of any regulatory agency of competent jurisdiction shall determine
that any one or more of the provisions or part of the provisions contained in
this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this Agreement
and this Agreement shall be reformed and construed as if such invalid or illegal
or unenforceable provision, or part of such provision, had never been contained
herein, so that such provisions would be valid, legal and enforceable to the
maximum extent possible, so long as such construction does not materially
adversely effect the economic rights of either party hereto.

            Section 8.13. Further Assurances. From and after the date of this
Agreement, upon the request of the Purchaser or the Company, each of the Company
and the Purchaser shall execute and deliver such instruments, documents and
other writings as may be reasonably necessary or desirable to confirm and carry
out and to effectuate fully the intent and purposes of this Agreement.

            Section 8.14. Effectiveness of Agreement. This Agreement shall
become effective only upon satisfaction of the conditions precedent to the
Initial Closing set forth in Article I of the Escrow Agreement.

                                    ARTICLE 9

                                   DEFINITIONS

            Section 9.1. Certain Definitions.

               (a) "Commitment Amount" shall have the meaning assigned to such
        term in Section 1.1 hereof.

               (b) "Commitment Period" shall mean the period of 18 consecutive
        months commencing immediately after the Effective Date.

               (c) "Common Stock" shall mean the Company's common stock, $0.001
        par value per share.

                                       25
<PAGE>   26

               (d) "Draw Down" shall have the meaning assigned to such term in
        Section 5.1(a) hereof.

               (e) "Draw Down Notice" shall have the meaning assigned to such
        term in Section 5.1(f) hereof.

               (f) "Draw Down Pricing Period" shall mean a period of twenty (20)
        consecutive Trading Days beginning on the date specified in the Draw
        Down Notice (as defined in Section 5.1(f) herein); provided, however,
        the Draw Down Pricing Period shall not begin before the day on which
        receipt of such notice is confirmed by the Purchaser.

               (g) "Effective Date" shall mean the date the Registration
        Statement of the Company covering the Shares being subscribed for hereby
        is declared effective by the Securities and Exchange Commission (the
        "SEC").

               (h) "Exchange Act" shall mean the Securities and Exchange Act of
        1934, as amended.

               (i) "GAAP" shall mean the United States Generally Accepted
        Accounting Principles as those conventions, rules and procedures are
        determined by the Financial Accounting Standards Board and its
        predecessor agencies.

               (j) "Initial Closing" shall have the meaning assigned to such
        term in Section 1.2 hereof.

               (k) "Initial Closing Date" shall have the meaning assigned to
        such term in Section 1.2 hereof.

               (l) "Investment Amount" shall have the meaning assigned to such
        term in Section 5.1(f) hereof.

               (m) "Material Adverse Effect" shall mean any adverse effect on
        the business, operations, properties, prospects or financial condition
        of the Company that is material and adverse to the Company and its
        subsidiaries and affiliates, taken as a whole and/or any condition,
        circumstance, or situation that would prohibit or otherwise materially
        interfere with the ability of the Company to perform any of its material
        obligations under this Agreement or the Registration Rights Agreement or
        to perform its obligations under any other Material Agreement (as
        defined in Section 2.1(u)).

               (g) "Principal Market" shall mean initially the American Stock
        Exchange and shall include the Nasdaq National Market, the Nasdaq
        Small-Cap Market and the New York Stock Exchange if the Company becomes
        listed and trades on such market or exchange after the date hereof.

               (h) "Purchase Price" shall mean, with respect to Shares purchased
        during each applicable Settlement Period, 92.5% (the "Purchase Price
        Percentage") of the VWAP on the date in question; except that, for each
        $50,000,000 increase in the

                                       26
<PAGE>   27

        Company's average market cap (calculated by multiplying the number of
        shares of Common Stock issued and outstanding by the VWAP of the Common
        Stock (the "Market Cap")) above $150,000,000 during the applicable
        Market Cap Period (as defined below), the Purchase Price Percentage
        shall be increased by 0.5% on the date in question until the Purchase
        Price Percentage equals 94.5%; provided, however, each increase in the
        Purchase Price Percentage shall only occur if the corresponding increase
        in the Market Cap is maintained for at least twenty (20) consecutive
        Trading Days immediately prior to the date the applicable Settlement
        Period commences (the "Market Cap Period"). By way of example, if the
        Market Cap is between $1 and $199,999,999 during the Market Cap Period,
        the Purchase Price Percentage shall be 92.5%. If the Market Cap is
        between $200,000,000 and $249,999,999 during the entire Market Cap
        Period, the Purchase Price Percentage shall be 93%.

               (i) "Registration Statement" shall mean the registration
        statement under the Securities Act of 1933, as amended (the "Securities
        Act"), to be filed with the Securities and Exchange Commission for the
        registration of the Shares pursuant to the Registration Rights Agreement
        attached hereto as Exhibit A (the "Registration Rights Agreement).

               (j) "SEC Documents" shall mean the Company's latest Form 10-K or
        Form 10-KSB as of the time in question, all Forms 10-Q or 10-QSB and 8-K
        filed thereafter, and the Proxy Statement for its latest fiscal year as
        of the time in question until such time as the Company no longer has an
        obligation to maintain the effectiveness of a Registration Statement as
        set forth in the Registration Rights Agreement.

               (n) "Settlement" shall mean the delivery of the Shares into the
        Purchaser's DTC account in exchange for payment therefor.

               (k) "Settlement Date" shall have the meaning assigned to such
        term in Section 5.1(b).

               (l) "Settlement Period" shall have the meaning assigned to such
        term in Section 5.1(b).

               (m) "Shares" shall mean, collectively, the shares of Common Stock
        of the Company being subscribed for hereunder (the "Draw Down Shares")
        and those shares of Common Stock issuable to the Purchaser upon exercise
        of the Warrant (the "Warrant Shares").

               (n) "Threshold Price" shall mean the price per Share designated
        by the Company as the lowest VWAP during any Draw Down Pricing Period at
        which the Company will sell its Common Stock in accordance with this
        Agreement.

               (o) "Trading Day" shall mean any day on which the Principal
        Market is open for business.

                                       27
<PAGE>   28

               (o) "Transaction Documents" shall mean this Agreement, the
        Registration Rights Agreement and the Escrow Agreement.

               (p) "VWAP" shall mean the daily volume weighted average price of
        the Company's Common Stock on the Principal Market as reported by
        Bloomberg Financial L.P. (based on a trading day from 9:30 a.m. Eastern
        Time to 4:02 p.m. Eastern Time) using the VAP function on the date in
        question.

               (q) "Warrant" shall have the meaning assigned to such term in
        Section 4.2(f) hereof.

                            [SIGNATURE PAGE FOLLOWS]

                                       28
<PAGE>   29

            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorize officer as of this 20th day of
February, 2001.

                                       E-MEDSOFT.COM

                                       By:/s/ John Andrews
                                          --------------------------------------
                                              John Andrews, President & CEO

                                       HOSKIN INTERNATIONAL LIMITED

                                       By:/s/ David Sims
                                          --------------------------------------
                                              David Sims, Authorized Signatory

                                       29

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