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                                                                  EXHIBIT 10.16

                                MCAFEE.COM CORP.
                   MASTER OEM DISTRIBUTOR AGREEMENT FOR JAPAN

        This Master OEM Distributor Agreement (the "Agreement") is effective as
of January 1, 2000 (the "Effective Date") by and between McAfee.com, Corp., a
Delaware corporation, with its principal place of business at 2805 Bowers
Avenue, Santa Clara, CA 95051 ("McAfee.com"), and Network Associates K.K. a
Japanese corporation, with its principal place of business at Toranomon No. 33
Mori Bldg., 3-8-21 Toranomon, Minato-ku Tokyo 105 Japan ("Distributor").

                                    RECITALS

        WHEREAS, McAfee owns and/or markets certain computer software services
and products;

        WHEREAS, Distributor licenses computer products to End Users and to its
authorized OEMs, system integrators and resellers and offers post-sales support
services and software evaluation libraries through its sales offices and/or
resale locations;

        WHEREAS, Distributor desires to license the Products from McAfee.com in
order to sub-license the Products in Japan to OEMs for the sole purpose of
producing OEM Products for distribution to End Users and Resellers, and
McAfee.com desires to make the Products available to Distributor for these
purposes.

        IN CONSIDERATION of the foregoing premises, the parties agree that the
terms and conditions attached and incorporated herein shall govern the
distribution of the Products by Distributor.

        IN WITNESS WHEREOF, the parties have executed this Agreement.

                                               NETWORK ASSOCIATES K.K.
Address for Notices:
Network Associates K.K.                        Signed: /s/ Takahiro Kato
Toranomon No. 33 Mori Bldg.                    --------------------------------
Toranomon, Minato-ku                           Name: Takahiro Kato
Tokyo 105 Japan                                Title: Representative Director
Fax:  81-3-3435-1349
Attention:  Representative Director

                                               MCAFEE.COM CORP.
Address for Notices:
McAfee.com Corp.                               Signed: /s/ Srivats Sampath
2805 Bowers Avenue                             --------------------------------
Santa Clara, California U.S.A. 95051           Name: Srivats Sampath
Fax:                                           Title: President, Chief Executive
Attention:                                            Officer and Director

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                        TERMS AND CONDITIONS OF AGREEMENT

1. DEFINITIONS

        (a)     "Agreement" means this Agreement, fully executed by the parties,
                which includes all Attachments.

        (b)     "Attachments" means addenda, including any exhibits or schedules
                to this Agreement describing the License Fees, and any special
                terms and conditions pertaining to this Agreement.

        (c)     "End User" means the entity to whom the End User License
                Agreement applies, who uses the Products for internal use and
                not for re-sale, marketing, leasing or renting, and who has
                obtained the Products bundled or pre-installed by an OEM.

        (d)     "End User License Agreement" means the license to use the
                Products, which shall be included with each Product and in the
                form of Exhibit A (or a translation thereof or as specified by
                McAfee.com

        (e)     "Error" means any reproducible failure of the Products to
                perform its intended functions or any significant inaccuracies
                in the End User Documentation.

        (f)     "License Fees" has the meaning set forth in Section 5(a).

        (g)     "Localization Services" has the meaning set forth in Section
                4(j).

        (h)     "Marketing Materials" include all data sheets, reference
                stories, product literature, CDs, and related items.

        (i)     "Master Distributor Agreement" means that certain Master
                Distributor Agreement between Distributor and NAI dated January
                1, 2000, as such agreement is renewed, amended, supplemented or
                revised from time to time.

        (j)     "NAI" means Network Associates, Inc., a Delaware corporation.

        (k)     "OEM" means, and shall be limited to, an original computer
                equipment manufacturer who preinstalls or bundles software with
                its personal computer hardware.

        (l)     "OEM Product" means, and shall be limited to, an OEM's personal
                computer hardware loaded or bundled with the Products or with
                software which accesses PC Clinic.

        (m)     "PC Clinic" means the paid subscription service of McAfee.com
                referred to as "PC Clinic" and all upgrades, new versions or
                successor products thereof, generally made available by
                McAfee.com in the Territory from time to time in its sole
                discretion.

        (n)     "Products" means all current and future NAI software products
                licensed to McAfee.com by NAI pursuant to that certain
                Technology Cross License Agreement dated January 1, 1999, but
                only to the extent that McAfee.com is authorized to license such
                software products to Distributor within the Territory without
                infringement of third party rights.

        (o)     "Resellers" means individuals and companies that distribute the
                OEM Products to End Users or to other Resellers in the
                Territory.

        (p)     "Single User" means and End User who acquires the right to use
                the software product from an OEM or Reseller under an End User
                License Agreement for single-node, individual-consumer home
                office or single-node, individual-small office use only and not
                for resale or multi-user usage.

        (q)     "Subscription" means a subscription for PC Clinic generated.
                from end users of OEM Products.

        (r)     "Territory" is Japan, in which the Distributor agrees to confine
                its sales and marketing activities.

2. APPOINTMENT. McAfee.com appoints Distributor as the exclusive (subject to the
provisos below) distributor of the Products to OEMs in the Territory for the
sole purpose of authorizing such OEMs to produce OEM Products for distribution
to Resellers or End Users, and Distributor accepts this appointment. To perform
its obligations as exclusive (subject to the provisos below) distributor,
McAfee.com grants to Distributor the non-transferable, fee-bearing right to
reproduce the Products, market and distribute them to OEMs in the Territory,
subject to the terms of the End User License Agreement that accompanies each

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Product. PROVIDED, HOWEVER, that (i) with respect to distribution of PC Clinic
to OEMs, Distributor's exclusive license shall apply only for the OEMs listed on
Exhibit C or their affiliates, and Distributor's PC Clinic distribution right
for other OEMs shall be non-exclusive, and (ii) the exclusive license granted by
McAfee.com to Distributor may be changed to a non-exclusive license by
McAfee.com (without obligation, penalty or other change in the terms and
conditions of this Agreement) upon 60 days prior written notice by McAfee.com at
any time during the Term (or any renewal term) subsequent to Distributor's
failure to meet or exceed the Minimum Performance Targets set forth in Exhibit
E.

3. DISTRIBUTION.

        (a) Distributor's Distribution Right. Distributor, as an independent
distributor, at its own risk and expense and subject to any such prices,
contractual terms and conditions as Distributor may from time to time determine,
shall distribute the Products to OEMs solely for distribution, marketing and
sale to Resellers and End Users as a component of an OEM Product. The
distribution of Products by Distributor to OEMs shall be governed by an OEM
agreement in form and substance acceptable to McAfee.com, the terms of which
shall not grant to the OEM rights exceeding the rights granted to Distributor
under this Agreement and shall be no less favorable to and protective of
McAfee.com in all material respects than this Agreement, provided that each of
the Distributor's existing OEM license agreements as of the Effective Date which
are set forth in Exhibit C hereto are deemed acceptable to McAfee.com.
McAfee.com shall not unreasonably withhold or delay its consent to the form of
an OEM agreement proposed by Distributor, such consent to be deemed given if
McAfee.com fails to respond to Distributor's written request for approval within
five (5) business days after it receives such request. Distributor may submit
for approval to McAfee.com proposed OEM agreements in their original Japanese
language form, provided a summary of key business terms (royalty amount and
payment terms, term of contract, product, upgrade rights of end users, and term
of End User License Agreement) in also submitted in English. Distributor's
exclusive right of distribution is limited to OEMs with their principal place of
business located in the Territory.

        (b) Limitation on Online Distribution. Distributor is not authorized to
sell, supply or distribute the Products via the Internet (i) to Single Users or
(ii) to OEMs, Resellers, or other Original Equipment Manufacturers, resellers or
sub-distributors for sale or distribution via the Internet to Single Users;
provided that such restriction shall not prevent Distributor from fulfilling its
obligations for the remaining term of any such sub-distribution agreements that
are in existence on the Effective Date, which are set forth in Exhibit D hereto.
Any such agreements shall be subject to the License Fees set forth below. After
the establishment of McAfee.com Japan, Distributor shall not renew any such
agreements, and to the extent any such agreements may be assigned upon their
terms, Distributor shall assign such agreements with the consent of the
sub-distributor to McAfee.com Japan forthwith. Distributor shall use its best
efforts to obtain the consent of the sub-distributors to assign such agreements
to McAfee.com Japan.

        (c) PC Clinic Changes. McAfee.com reserves the right in its sole
discretion and without liability to Distributor to add additional Products
features to PC Clinic, change the price for PC Clinic, modify or rename PC
Clinic, change the level of McAfee.com's support for PC Clinic and/or
discontinue the availability of PC Clinic in the Territory. McAfee.com retains
the right to discontinue distribution of PC Clinic through Distributor upon
giving Distributor thirty (30) days prior written notice of such discontinuance.
McAfee.com will use reasonable efforts to provide Distributor with thirty (30)
days notice prior to any such change.

        (d ) McAfee.com Distribution Rights. As between McAfee.com and
Distributor, McAfee.com shall have the right, but not the obligation, to
distribute updates or renewals of the Products or cross sales to other products
via the Internet (or an Internet link bundled with or into the Products) and
shall be entitled to retain 100% of any revenue therefrom except to the extent
provided in Exhibit B. For avoidance of doubt, McAfee.com agrees not (i) grant
any multi-user licenses to the Products for use within the Territory, or (ii)
distribute packaged versions of the Products (other than PC Clinic) within the
Territory.

        (e) Term of End User License Agreement. The term to be proposed to each
OEM of the license granted in the End User License Agreement for PC Clinic shall
be set by McAfee.com in its sole discretion. Distributor may set the term to be
proposed to each OEM of the license granted in the End User License Agreements
for other Products supplied to OEMs, provided that, without the prior written
consent of McAfee.com (which shall not be unreasonably withheld or delayed),
such license term shall not exceed twelve months for such other Products
supplied to OEMs pursuant to any OEM agreement entered into or renewed after
August 1, 2000.

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4. MARKETING.

        (a) Products. McAfee.com will make available, and Distributor is granted
the right to obtain, the Products via electronic means. Distributor is also
granted the right to obtain all Marketing Materials. The parties hereby
acknowledge that to the extent they use words such as "purchase", "sale",
"purchase price", "fees", and similar words with respect to the Products, they
do so for convenience and do not intend to imply that the Products are being
sold.

        (b) General. Distributor will use commercially reasonable efforts to
market the Products to OEMs to the best of its ability, and to that end will (i)
provide a sufficient number of competent sales and support representatives
trained and knowledgeable about the Products, capable of answering OEM questions
regarding the Products, demonstrating the Products, informing OEMs about the
Product features, assisting OEMs in determining which Products will best meet
their needs and providing pre-and post-sale technical assistance, service and
support for the Products, (ii) conduct marketing activities to OEMs, (iii)
maintain a sufficient inventory of the Products to satisfy anticipated demand
from OEMs, (iv) make Products sales and promotional materials available to OEMs,
(v) provide training for the Products as part of Distributor's new hire
orientation, (vi) support special promotions to OEMs, and (viii) maintain a
sound financial condition. Distributor will conduct its business in a manner
that reflects favorably upon the Products and McAfee.com. Distributor will
ensure the media for each Product distributed by the Distributor contains a
label bearing a NAI or McAfee.com copyright, as the case may be, and the
particular Product trademark. Distributor shall cause the OEM to agree to bundle
each copy of such media for the Products with the applicable End User License
Agreement before shipment to Resellers and End Users. Distributor shall not in
any event remove from or obscure upon any Products any labels placed thereon by
McAfee.com containing statements of restrictions upon distribution, without the
prior written consent of McAfee.com. Distributor must provide all of the files
that McAfee.com includes with a particular Product to Distributor's OEMs as a
whole with all DOC, TXT, DLL and other files included with all COM and EXE
files.

        (c) Advertising; Use of Trademarks. Solely within the Territory,
Distributor may advertise and promote the Products in a commercially reasonable
manner and, subject to the provisions of Section 15, may use trademarks and
service marks provided by McAfee.com or NAI in connection therewith, provided
that all such promotions and advertising will be consistent with McAfee.com's
general quality standards and the provisions of this Agreement.

        (d) Trademarks Rights. McAfee.com and/or NAI owns any and all
trademarks, trade names, and service marks for the Products. Such trademarks,
trade names, and service marks shall include all product names, the names
"McAfee" and "McAfee.com", logos, designs, and other designations or brands used
by McAfee.com and NAI in connection with the Products. Distributor acknowledges
and agrees that McAfee.com is not granting to Distributor any rights in any
Product trademark, trade name, or service mark in or outside of the Territory.
Distributor shall not attempt to register any Product trademark, or any trade
name or service mark which is similar to the Products' trademark, trade name or
service mark in or outside of the Territory during or after the term of this
Agreement. Distributor agrees that only NAI and/or McAfee.com, as the case may
be, is entitled to register such trademarks, trade names, and service marks in
any class of products or services in the Territory. If Distributor has any
ownership or rights or claims to any McAfee.com trademarks, trade names, or
service marks, then Distributor agrees to so notify McAfee.com and agrees that
such ownership or rights or claims are transferred to McAfee.com on the
Effective Date of this Agreement. The compensation to Distributor for the
transfer of such ownership or rights or claims shall be $1.00.

        (e) McAfee.com Marketing Support. McAfee.com will make available to
Distributor all Marketing Materials ordinarily, and without any compensation,
made available to its Resellers and OEMs regarding technical, sales, and
marketing information for the Products.

        (f) Sales and Technical Training. McAfee.com will provide Distributor
with sales and technical training on existing and new Products at a level which
McAfee.com determines is commensurate with the revenues generated by
Distributor.

        (g) PC Clinic; Joint Sales Calls. Distributor agrees to use its best
efforts to migrate OEMs from the VirusScan product to PC Clinic, provided that
(i) Distributor has received sufficient pre-sales support for PC Clinic to make
such migration commercially practicable, (ii) PC Clinic meets any applicable
product testing and quality standards of the relevant OEM and (iii) McAfee.com
is solely responsible for PC Clinic product quality. McAfee.com and Distributor
shall make joint sales calls to OEMs in order to promote such OEM's transition
to PC Clinic. Both parties agree to cooperate in promoting the Products in the
Territory.

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        (h) Competing Products. During the term of this Agreement, Distributor
agrees not to market to OEMs any products that directly or indirectly compete
with the Products, and shall not engage in any competitive activities or make
any investments in or with any competitor offering competing products, except
with the prior written consent of McAfee.com. Notwithstanding the foregoing,
Distributor may market, distribute and sell any NAI products in accordance with
the Master Distributor Agreement (except to the extent the rights granted in the
Master Distributor Agreement may be deemed to alter the terms of this
Agreement), and this Agreement shall not be construed as to limit or reduce the
rights of Distributor under such agreement with NAI. For the avoidance of doubt
no rights are granted to Distributor under the Master Distributor Agreement with
respect to sales to OEMs, or for PC Clinic.

        (i) No Modification. Except with the prior approval of McAfee.com,
Distributor agrees not to alter, remove, or modify any serial number,
identifying number, trademark, End User License Agreement, registration card,
copyright or other proprietary rights notices contained in or on the Products or
any materials supplied under this Agreement. Distributor will not apply any
other trademarks, logos or notices to the Products.

        (j) Localization. Distributor agrees to provide reasonable assistance to
McAfee.com, at McAfee.com's expense, with localization, translation,
engineering, porting, printing, web-site localization and other work required to
create Japanese language OEM versions of the Products and Marketing Materials
(the "Localization Services"). McAfee.com shall own the copyrights to resulting
Japanese-language translations and other work product (the "Work Product") to
the extent that McAfee.com has borne the expense of the creation of such Work
Product. The agreed non-binding target date for completion of the localization
of the initial Japanese language version of PC Clinic is September 30, 2000.

        (k) McAfee.com K.K. Distributor and McAfee.com agree to cooperate in the
establishment of McAfee.com K.K. ("McAfee.com Japan"), a wholly owned subsidiary
of McAfee.com to be established after the date hereof. Distributor shall
provide, at McAfee.com Japan's expense (equal to a reasonable allocation of
actual costs), office space for up to ten (10) employees of McAfee.com Japan.

        (l) Quarterly Progress Meetings. Representatives of each party shall
meet on a quarterly basis to discuss the progress of product development,
localization and marketing.

5. LICENSE FEES, REPORTS, TAXES.

        (a) License Fees. The license fees ("License Fees") to be paid to
McAfee.com by Distributor for any license or Marketing Materials provided by
Distributor to OEMs, and to Distributor by McAfee.com for any Subscriptions
generated through an OEM, are set forth in Exhibit B. Each party agrees to pay
License Fees quarterly regardless of the other party's invoice date. The License
Fees are denominated in Japanese Yen ((Y)), but if requested by McAfee.com,
payments to McAfee.com shall be payable by Distributor to McAfee.com in U.S.
Dollars converted from Japanese Yen at the exchange rate available to
Distributor on the date of payment. All payments will be made via wire transfer
to a bank account designated by McAfee.com.

        (b) Distributor's Reports. Distributor will provide a customer and sales
report to McAfee.com in a detailed format acceptable to McAfee.com within
fifteen (15) business days after the end of each quarter during the term of this
Agreement, including listing (and if requested by McAfee.com, providing copies
of) licenses granted by Distributor to all OEMs for all Products for that
quarter. Such customer and sales reports will be the basis for McAfee.com's
invoice for such sales to Distributor for that quarter. Distributor will also
provide a forecast report and a customer opportunities report in a format
acceptable to McAfee.com within five (5) business days after each quarter during
the term of this Agreement. All such reports will be sent via e-mail to
McAfee.com.

        (c) McAfee.com's Reports. McAfee.com will provide a customer and sales
report to Distributor in a detailed format acceptable to Distributor within
fifteen (15) business days after the end of each quarter during the term of this
Agreement, which lists the number of new Subscriptions for that quarter. Such
customer and sales reports will be the basis for Distributor's invoice for such
sales to McAfee.com for that quarter. McAfee.com will also provide a forecast
report and a customer opportunities report in a format acceptable to Distributor
within five (5) business days after each quarter during the term of this
Agreement. All such reports will be sent via e-mail to Distributor.

        (d) Taxes. All amounts payable by any paying party to a receiving party
under this Agreement are exclusive of any tax, withholding tax, levy, or similar
governmental charge that may be assessed by any

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jurisdiction in the Territory or in the United States. Withholding for corporate
or personal income taxes, if any, required by the government of Japan or the
United States on the amounts payable pursuant to this Agreement shall be
withheld and paid by the paying party to the appropriate tax authorities, and
the amounts payable shall be subject to deductions of amounts equivalent to such
withholding taxes. The paying party shall cooperate with the receiving party and
provide any documentation necessary to reduce the withholding tax rate to the
lowest legal rate. Promptly after each such tax payment, the paying party shall
forward to the receiving party the official tax receipts or other evidence
issued by the tax authorities concerned. The paying party shall assist the
receiving party in preserving and exercising whatever right the receiving party
may have to contest by appropriate proceedings the validity or amount of any tax
thus withheld.

6. TERM AND TERMINATION.

        (a) Term. The initial term of this Agreement is three (3) years from the
Effective Date. This Agreement shall automatically renew for up to one
additional two (2) year term, provided that (i) Distributor has used its best
efforts to promote the sale of Products to OEMs in the Territory and has met or
exceeded the Minimum Performance Targets set forth on Exhibit E, and (ii) the
Master Distributor Agreement between NAI and Distributor remains in effect.

        (b) Termination for Breach. Unless otherwise specified, if either party
fails to comply with any of the terms and conditions of this Agreement, the
other party may terminate this Agreement upon thirty (30) days written notice to
the breaching party specifying any such breach, unless the breach specified
therein has been remedied within such thirty (30) day period.

        (c) Termination by McAfee.com. McAfee.com may terminate this Agreement
upon fifteen (15) days written notice for the following breaches by Distributor
unless such breaches are cured within such fifteen (15) day period: (i)
Distributor fails to pay amounts due from sales reports within thirty (30) days
pursuant to Section 5(a) or any McAfee.com invoice within 30 days of issuance;
(ii) Distributor markets any competing products or otherwise violates Sections
3(b) or 4(h) without McAfee.com's written consent; or (iii) Distributor misuses
McAfee.com's trademarks in violation of Sections 4(c) or 4(d).

        (d) Termination for change in business. McAfee.com may terminate this
agreement immediately if (i) there is any material change in the ownership or
management of Distributor, or Distributor's business or assets where such change
no longer meets the requirements of this Agreement or where ownership is
transferred to a competitor of McAfee.com or NAI; (ii) a receiver is appointed
for Distributor or its property; (iii) Distributor becomes insolvent or unable
to pay its debts as they mature; (iv) Distributor makes an assignment for the
benefit of creditors; or (v) Distributor becomes the subject of any proceeding
under any bankruptcy, insolvency, wagi, company reorganization, or debtor's
relief law.

        (e) Effect of Termination. Upon termination, all outstanding License
Fees will be immediately due and payable. Distributor shall have no further
right to distribute the Products or any related materials.

        (f) No Liability, Damages. Neither party will be liable for damages or
costs of any nature arising from the expiration or termination of this Agreement
in accordance with its terms.

        (g) Survival beyond Termination. Those rights and obligations that by
their nature extend beyond the term of this Agreement shall survive any
termination or expiration of this Agreement.

7. TECHNICAL SUPPORT.

        (a) McAfee.com Support. McAfee.com will provide technical support to
Distributor via telephone, email, and fax as needed to assist Distributor in
performing its duties described in 7(b). McAfee.com shall invoice Distributor
for such technical support at McAfee.com's customary rates charged to third
parties. McAfee.com will not provide support directly to any of Distributor's
OEMs or any Resellers or End Users unless as agreed between the parties.

        (b) Distributor Support. Distributor shall be solely responsible for
providing technical support via telephone, email, and fax to the OEMs with
respect to the Products other than PC Clinic. At a minimum, Distributor shall
provide technical support with respect to such Products to the OEMs including
the following: (i) assisting with installation, operation, and use of the
Products; (ii) preparing all Error reports, forwarding these to McAfee.com, and
conducting necessary call backs; (iii) furnishing Error corrections to OEMs
provided to Distributor by McAfee.com. Upon termination of this Agreement,
Distributor expressly

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acknowledges its obligation to continue to support all of Distributor's OEMs and
their End Users who still have a valid subscription license for any Product or a
separate support agreement with Distributor for the remaining term of such
subscription or agreement. McAfee.com shall be solely responsible for providing
technical support with respect to PC Clinic.

        (c) New Viruses. Distributor agrees to provide any new suspected virus
to McAfee.com technical personnel as soon as possible. Distributor will include
a brief description of how the virus functions with such samples if available.

8. INSPECTIONS, RECORDS AND REPORTING.

        (a) Notification. Distributor will notify McAfee.com in writing of any
claim made or proceeding initiated against McAfee.com or Distributor involving
the Products within ten (10) days after Distributor learns of such claim or
proceeding. Distributor will also report promptly to McAfee.com all claimed or
suspected Product Errors or violations of the End User License Agreement.
Distributor will notify McAfee.com in writing not more than thirty (30) days
after any change in the management or control of Distributor or any transfer of
more than five percent of Distributor's voting control or a transfer of
substantially all its assets.

        (b) Records. For two (2) years after each calendar quarter during the
term of this Agreement, Distributor will keep full and accurate books of account
and copies of all documents and other materials for such quarter relating to
this Agreement and Distributor's records, accounts and contracts relating to the
distribution of the Products at Distributor's office.

        (c) Audit. Each party and its representatives, upon reasonable advance
notice to the other party and at the examining party's cost, shall have the
right at any time during the term of this Agreement, and for two (2) years
thereafter, to examine such books, records, correspondence, quotations, orders
and other documents as it may deem necessary and appropriate. Such audit shall
be conducted during regular business hours at the examined party's offices and
in such manner as not to interfere with the examined party's normal business
activities. All information from such inspections will be disclosed only to
those who need to know the contents in the discharge of their duties to the
examining party under this Agreement. If such inspections should disclose any
under reporting of License Fees, then the paying party shall promptly pay to the
receiving party such amount, together with interest thereon at the lesser of the
rate of 1 1/2% per month or the maximum allowable by applicable law from the
date on which such amount became due to the receiving party from the paying
party, plus any reasonable fees (including accounting or legal fees) incurred by
the paying party associated with the audit.

9. GOVERNMENT APPROVALS. Distributor shall, at its own expense, obtain and
arrange for the maintenance in full force and effect of all government
approvals, consents, licenses, authorizations, declarations, filings, and
registrations as may be necessary for the performance of the terms and
conditions of this Agreement, including without limitation, fair trade
approvals, under all laws, regulations, and other legal requirements within the
Territory that apply to this Agreement, including tax and foreign exchange
legislation.

10. EXPORT. Distributor acknowledges that the laws and regulations of the United
States may restrict the export and re-export of certain commodities and
technical data of United States origin, including the Products in any medium.
Distributor agrees that it will not export or re-export the Products in any form
without the appropriate United States and foreign government licenses.

11. WARRANTIES

        (a) Limited Warranty. McAfee.com warrants that for a period of 30 days
from the date of delivery to Distributor that (i) any media on which the Product
is furnished will be free from defects in materials and workmanship under normal
use; (ii) the Products contain the features described in the appropriate data
sheet. Except for the foregoing, to the full extent allowed by applicable law,
the Products are provided "AS IS". Distributor's exclusive remedy and
McAfee.com's entire liability under this limited warranty will be at
McAfee.com's option to repair or replace the Product.

        (b) No Other Warranties. OTHER THAN AS SET FORTH HEREIN, MCAFEE.COM
DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES OR CONDITIONS WITH REGARD TO THE
PRODUCTS, INCLUDING WARRANTIES OR CONDITIONS OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, AND NON INFRINGEMENT OF THIRD PARTY RIGHTS. NO

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PERSON IS AUTHORIZED TO MAKE ANY OTHER WARRANTY OR REPRESENTATION CONCERNING THE
PRODUCTS OTHER THAN AS PROVIDED IN THE END-USER LICENSE AGREEMENT. Distributor
shall be solely responsible for any claims, warranties or representations made
by Distributor or Distributor's employees or representatives that differ from
the warranty provided by McAfee.com or its licensors. In addition, where
Distributor produces any materials and supplies them to OEMs or their End Users,
Distributor will be solely responsible for all remedies and warranties for any
defects or errors in any such materials so supplied.

12. INDEMNIFICATION.

        (a) Indemnification of Distributor. McAfee.com agrees that, if notified
promptly in writing and given sole control of the defense and all related
settlement negotiations, it will defend Distributor against any claim based on
an allegation that a Product in the form supplied by McAfee.com to Distributor
directly infringes a Japan copyright or Japan trade secret right. Under no
circumstances will McAfee.com be directly or indirectly deemed to indemnify
Distributor for any Japan patent or trademark claim. To qualify for such defense
and payment, Distributor must: (i) give McAfee.com prompt written notice of such
claim; (ii) allow McAfee.com to control and fully cooperate with McAfee.com in
the defense and all related settlement negotiations; and (iii) diligently
pursue all indemnification and other remedies provided to it under its Master
Distributor Agreement with respect to any alleged infringement. McAfee.com will
pay any resulting costs, damages and attorneys' fees finally awarded by a court
with respect to any such claims but shall not be responsible for any compromise
made without its consent, or that are subject to indemnification by NAI under
the Master Distributor Agreement . Distributor agrees that, if the Products in
the inventory of Distributor or the operation thereof, become, or in
McAfee.com's opinion are likely to become, the subject of an infringement claim,
Distributor will permit McAfee.com, at McAfee.com's option and expense, to,
among other things: (x) procure the right for Distributor to continue marketing
and using such Products; (y) to replace or modify them so that they become
non-infringing; (z) if neither of the foregoing alternatives is available on
terms that McAfee.com deems reasonable, permit Distributor to return such
Products and McAfee.com will grant Distributor a credit equal to the price paid
by Distributor for such returned Products, as adjusted for discounts, returns
and credits actually given and this Agreement shall be deemed terminated with
respect to any such infringing Product. THE FOREGOING STATES DISTRIBUTOR'S SOLE
AND EXCLUSIVE REMEDY WITH RESPECT TO CLAIMS OF INFRINGEMENT OF THIRD PARTY
PROPRIETARY RIGHTS OF ANY KIND.

        (b) No Combination Claims. Notwithstanding Section 12(a), McAfee.com
will not be liable to Distributor for any claim arising from or based upon the
combination, operation or use of any Product with equipment, data or programming
not supplied by McAfee.com, or arising from any unauthorized modification of the
Products.

        (c) Indemnification of McAfee.com. Distributor will indemnify, hold
harmless and upon McAfee.com's request, defend McAfee.com against any claims,
liabilities and expenses (including court costs and reasonable attorneys' fees)
arising from the negligence, misrepresentations, or acts or omissions of
Distributor, its employees or representatives.

13. LIMITATION OF LIABILITY. NEITHER PARTY'S LIABILITY WITH REGARD TO THIS
AGREEMENT OR THE PRODUCTS, IF ANY, WILL INCLUDE CONSEQUENTIAL, INCIDENTAL,
SPECIAL OR OTHER INDIRECT DAMAGES, SUCH AS LOST PROFITS, EVEN IF THE OTHER PARTY
HAS KNOWLEDGE OF THE LIKELIHOOD OF SUCH DAMAGES; SAVE THAT NOTHING IN THIS
CLAUSE SHALL RESTRICT LIABILITY FOR DEATH, PERSONAL PROPERTY DAMAGE, DAMAGE OR
PERSONAL INJURY DIRECTLY CAUSED BY THE NEGLIGENCE OF EITHER PARTY.
Notwithstanding any other provisions of this Agreement, McAfee.com's aggregate
liability to Distributor under this Agreement shall be limited to a sum equal to
the total payments made by Distributor to McAfee.com for Products ordered
directly from McAfee.com in the most recent Term of the Agreement preceding
imposition of such liability.

14. CONFIDENTIALITY. Certain information disclosed by either party, including
any information relating to such party's research, development, proprietary
technology, product and marketing plans, finances, personnel and business
opportunities will be considered confidential information. Each party will not
use the other party's confidential information except as required to achieve the
objectives of this Agreement and will not disclose such confidential information
except to employees, representatives and contractors who have a need to know in
the discharge of their duties under this Agreement. Such restrictions will not
apply to information that (i) becomes public knowledge other than through the
disclosing party; (ii) is already known by the

                                    Page -8-
<PAGE>   9

disclosing party prior to disclosure by the disclosing party; (iii) is received
from a third party without similar restriction and without breach of this
Agreement. Disclosure of information is not prohibited if prior notice is given
to McAfee.com and such disclosure is: (a) compelled pursuant to a legal
proceeding or (b) otherwise required by law. Distributor will make no disclosure
or statement regarding the terms of this Agreement without first obtaining
McAfee.com's prior written consent.

15. PROPRIETARY RIGHTS. McAfee.com and its licensors retain ownership of all
intellectual property rights in the Products and Work Product as provided in
Section 4(j) hereof. Distributor will report any violations of any OEM agreement
or of the End User License Agreement and any claims of Product Errors that comes
to its attention. Distributor will not reverse engineer, modify or otherwise
change any of the software contained in the Products or its form. Distributor
will not remove, alter or obscure any copyright or other proprietary rights
notices contained on the Products. Distributor will not apply any other
trademarks, logos or notices to the Products. Distributor may use trademarks and
logos as provided by McAfee.com and/or NAI's only in connection with the
marketing and resale of the Products. Distributor's use of trademarks and logos
must be in accordance with NAI's and/or McAfee.com's policies and must meet
McAfee.com's quality standards.

16. RELATIONSHIP OF THE PARTIES. The parties are independent contractors and
this Agreement does not create any partnership, joint venture, or relationship
of employer and employee between McAfee.com and Distributor. Both McAfee.com and
Distributor acknowledge that neither party may obligate the other to any
warranty, agreement, or other obligation.

17. FORCE MAJEURE. Neither party shall be liable hereunder by reason of failure
or delay in the performance of its obligations hereunder (except for the payment
of money) on account of strikes, shortages, riots, insurrection, fires, flood,
storm, explosions, acts of God, war, governmental action, labor conditions,
earthquakes, or any other cause which is beyond the reasonable control of such
party.

18. EQUITABLE RELIEF. Each party acknowledges that any breach of its obligations
under this Agreement with respect to the proprietary rights or confidential
information of the other party will cause the other party irreparable injury for
which there are inadequate remedies at law, and therefore such other party will
be entitled to equitable relief in addition to all other remedies provided by
this Agreement or available at law.

19. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one instrument.

20. ASSIGNMENT. Neither party shall have the right to assign or otherwise
transfer this Agreement or any rights herein granted to any other person or
entity, except with the prior written consent of the other party, provided that
McAfee.com may assign all (but not less than all) of its rights and obligations
under this Agreement to McAfee.com Japan. Any attempted assignment in violation
of this Agreement shall be void.

20. GENERAL. This Agreement, including all Attachments hereto, constitutes the
entire agreement between the parties with respect to the subject matter hereof,
and supersedes and replaces all prior or contemporaneous understandings or
agreements, written or oral, regarding the subject matter. This Agreement may
not be changed, terminated or amended except in writing. The provisions of any
order for Products provided by Distributor will not apply unless expressly
included in McAfee.com's written acceptance of the order. McAfee.com's failure
or delay in exercising any of its rights will not constitute a waiver of such
rights unless expressly waived in writing. This Agreement will be governed and
interpreted according to the laws of California, excluding its conflict of laws
rules. Any suit hereunder may be brought in the federal or state courts in the
County of Santa Clara, California, and Distributor hereby submits to the
personal jurisdiction thereof. The parties acknowledge that the United Nations
Convention on Contracts for the International Sales of Goods (1980) is
specifically excluded from application to this Agreement. If a court of law
finds any provision of this Agreement unenforceable, the parties agree to
replace the offending provision with an enforceable provision that most nearly
achieves the intent and economic effect of the unenforceable provision. Any
notice provided hereunder must be in writing and will be deemed given upon the
earlier of actual receipt or ten (10) days after being sent by first class mail,
return receipt requested, to the appropriate address set forth above, as such
address may be changed by written notice to the other party.

                                    Page -9-
<PAGE>   10

                                    EXHIBIT B

B1. LICENSE FEES PAYABLE BY DISTRIBUTOR TO MCAFEE.COM

        (a) Distributor shall pay as License Fees to McAfee.com fifty percent
(50%) of Distributor's net invoice sales revenue (net of returns and rebates,
and excluding consumption or similar taxes) received in a given calendar quarter
from all sales made pursuant to this Agreement in any order, contract,
transaction or arrangement that includes the Products.

        (b) During the calendar year 2000 only, in no event shall the License
Fees paid to McAfee.com by Distributor pursuant to this Agreement be less than
US$125,000 (or Yen equivalent) per calendar quarter.

B2. LICENSE FEES PAYABLE BY MCAFEE.COM TO DISTRIBUTOR

        McAfee.com shall pay to Distributor as License Fees ten percent (10%) of
net sales revenue received from PC Clinic Subscriptions directly generated from
end users of OEM Products (net of revenue sharing with OEMs, returns and
rebates, and excluding consumption or similar taxes). Such License Fees shall be
payable for the calendar quarter in which McAfee.com receives the Subscription
payment.

                                   Page -11-
<PAGE>   11

                                    EXHIBIT C

OEM AGREEMENTS OF DISTRIBUTOR

<TABLE>
<CAPTION>
       COMPANY                       AGREEMENT TITLE                            START DATE                        PRODUCT
       -------                       ---------------                            ----------                        -------
<S>                                 <C>                                         <C>                              <C>
Toshiba Corporation              Software License Agreement                     01-May-99                        VirusScan

EPSON HANBAI Co., Ltd.           McAfee OEM License Agreement                   01-Oct-99                        VirusScan

Sharp Corporation                OEM License Agreement                          01-Feb-99                        VirusScan

NEC Corporation                  OEM License Agreement                          01-Oct-99                        VirusScan

Hitachi, Ltd.                    OEM License Agreement                          30-Mar-99                        VirusScan

Fujitsu, Ltd                     License Agreement                              07-Sep-99                        VirusScan

Sony Corporation                 OEM Software License Agreement                 13-May-99                        VirusScan for
                                                                                                                 Win95/98(J,E,G,F)

Matsushita Electric
Industrial Co., Ltd.             OEM License Agreement                          Target: by the                   VirusScan
                                                                                end of May '00
</TABLE>

By May 15, 2000, Distributor shall provide McAfee.com with an English summary of
the key business terms (royalty amount and payment terms, term of contract,
product, upgrade rights of end users, and term of End User License Agreement)
for each of the above OEM agreements.

                                   Page -12-
<PAGE>   12

                                    EXHIBIT D

INTERNET SUB-DISTRIBUTION AGREEMENTS OF DISTRIBUTOR EXISTING AS OF THE EFFECTIVE
DATE

<TABLE>
<CAPTION>
    COMPANY                                   AGREEMENT TITLE                            START DATE
    -------                                   ---------------                            ----------
<S>                                         <C>                                         <C>
NEC Corporation             Software Distribution Agreement (Site:NEC BIGLOBE)           1999/7/15

Hitachi,Ltd                 Online Distribution Addendum (to Special Distribution        1999/12/16
                            Agreement) (Site: Hitachi FloraCity)

Mitsubishi Corporation      Online Distribution Agreement (Site: b-store)                 2000/2/1

NextBusiness Systems        Online Distribution Agreement(Site: Onkyo)                   1999/10/28
</TABLE>

                                   Page -13-
<PAGE>   13

                                    EXHIBIT E

MINIMUM PERFORMANCE TARGETS FOR RENEWAL AND/OR MAINTENANCE OF EXCLUSIVITY:

1/1/2000 to 12/31/2000:

(c) $500,000 in License Fees

1/1/2001 to 12/31/2003:

In each year 5 million units of any Product (VirusScan and/or PC Clinic)
distributed to OEMs.

                                   Page -14-EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT ("AGREEMENT") is made as of March 22, 2000,
between Grow Biz International, Inc. ("EMPLOYER") and John L. Morgan
("EMPLOYEE").

                                  INTRODUCTION

         Employer desires to employ Employee under the terms of this Agreement,
including the non-solicitation, registration rights and other covenants stated
below, and Employee is willing to enter into such covenants in return for the
benefits hereunder.

                                    AGREEMENT

         In consideration of the foregoing, the parties agree as follows:

1.       NATURE AND CAPACITY OF EMPLOYMENT. Employer agrees to employ Employee
         as Chief Executive Officer of Employer under the terms of this
         Agreement. Employee agrees to perform, or be available to perform, on a
         full-time basis, the functions of this position, under the terms of
         this Agreement.

2.       TERM OF EMPLOYMENT. The term of this Agreement will commence as of
         March 23, 2000 and continue until such time as terminated under Section
         9 below.

3.       ANNUAL BASE SALARY. The annual base salary, exclusive of any benefits
         or bonuses, which Employer agrees to pay to Employee for the first year
         of this Agreement will be Fifty Thousand Dollars ($50,000). All amounts
         paid under this Agreement will be paid consistent with Employer's
         normal payroll practice and will be subject to all normal and required
         withholdings.

4.       BONUS. The Compensation Committee of Employer's Board of Directors may,
         in its sole discretion, establish certain criteria under which Employee
         may become eligible to receive an annual bonus payment, and will also
         maintain the right to adjust such criteria in its sole discretion,
         however the Committee is not obligated to grant any bonus to Employee.

5.       EMPLOYEE EXPENSES. Employer agrees to reimburse Employee for the
         reasonable business expenses Employee incurs on behalf of Employer upon
         proof of expenditure.

6.       EMPLOYEE BENEFITS. Employee will be eligible for those benefits
         provided to executive management employees.

7.       EMPLOYEE FRINGE BENEFITS. Employee will receive the following fringe
         benefits ("EMPLOYEE FRINGE Benefits"):

         7.1      STOCK OPTIONS. Employee will be issued a six year option (the
                  "OPTION"), under the terms of the stock option agreement
                  attached hereto as EXHIBIT A, to

<PAGE>

                  purchase 600,000 shares of Employer's common stock (the
                  "OPTION SHARES"), at an exercise price of $5 per share,
                  vesting at the rate of 120,000 shares per year on the
                  anniversaries of this Agreement.

         7.2      REGISTRATION RIGHTS. Employer has agreed to register under the
                  Securities Act of 1933, as amended ("SECURITIES ACT"), the
                  Option, the Option Shares and the 700,000 shares of Employer's
                  common stock which Employee and others are purchasing from K.
                  Jeffrey Dahlberg, for resale by Employee.

8.       UNDERTAKINGS OF EMPLOYEE. Employee agrees to spend Employee's full
         working time and effort in performing Employee's duties with Employer
         so long as employed by Employer, and will not, during the course of
         employment by Employer, without prior written approval of Employer,
         become an employee, director, officer, agent, partner of or consultant
         to, or a stockholder of (except a stockholder of a public company in
         which Employee owns less than five percent (5%) of the issued and
         outstanding capital stock of such company) any company or other
         business entity which is a significant competitor, supplier, or
         customer of Employer.

9.       TERMINATION OF EMPLOYMENT AGREEMENT. Employee's employment under this
         Agreement may be terminated, by either party for any reason or no
         reason upon 30 days written notice to Employee.

10.      CONFIDENTIAL INFORMATION. For purposes hereof, "CONFIDENTIAL
         INFORMATION" means any information that Employee learns or develops
         during the course of employment that derives independent economic value
         from being not generally known by the public and includes trade
         secrets, methods of research and testing, customer lists, vendor lists
         and financial information, and information relating to such matters as
         management systems and sales or marketing techniques. Employee will not
         directly or indirectly use or disclose any Confidential Information for
         anyone other than Employer either during the course of employment or
         after the termination of employment. Employee recognizes that the
         Confidential Information constitutes a valuable asset of Employer and
         agrees to act in such a manner as to prevent its disclosure and use by
         any person unless such use is for Employer. Employee's obligations
         under this paragraph are unconditional and will not be excused by any
         Employer conduct, except prior voluntary disclosure by Employer of the
         information.

11.      INVENTIONS. Employee agrees to promptly disclose to Employer in writing
         any invention, improvement, work of authorship, discovery or idea
         (including those which may be subject to copyright protection)
         generated, conceived, or reduced to practice by Employee alone or in
         conjunction with others, during or after working hours, while an
         employee of Employer ("INVENTIONS"); and all such Inventions will be
         Employer's exclusive property and are hereby assigned to Employer.
         Further, Employee will, at Employer's expense, give Employer all
         assistance it reasonably requires to perfect, protect, and use its
         rights to Inventions. In particular, Employee will sign all documents,
         do all things, and supply all information that Employer may deem
         necessary to: (i) transfer or record the transfer of

2
<PAGE>

         Employee's entire right, title and interest in Inventions; and (ii)
         enable Employer to obtain copyright or trademark protection for
         Inventions. Employee's obligations under this Section will continue
         beyond the termination of employment with respect to Inventions and
         will be binding on assigns, executors, and other legal representatives.

         NOTICE: PURSUANT TO MINNESOTA STATUTES SS. 181.78, EMPLOYEE IS NOTIFIED
         THAT THE AGREEMENT DOES NOT APPLY TO ANY INVENTION FOR WHICH NO
         EQUIPMENT, SUPPLIES, FACILITY, OR TRADE SECRET INFORMATION OF EMPLOYER
         WAS USED AND WHICH WAS DEVELOPED ENTIRELY ON EMPLOYEE'S OWN TIME, AND
         WHICH DOES NOT RELATE DIRECTLY TO EMPLOYER'S BUSINESS OR TO ITS ACTUAL
         OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR WHICH DOES NOT
         RESULT FROM ANY WORK EMPLOYEE PERFORMED FOR EMPLOYER.

12.      NON-SOLICITATION. Employee covenants that during the term of his
         employment by Employer, and for one year after the termination of his
         employment, regardless of the cause of termination, Employee will not,
         without Employer's prior written consent, directly or indirectly,
         employ or seek to employ, in any capacity, any person who, within the
         preceding six months, has been an employee of Employer, or any
         franchisee of Employer.

13.      INDEMNIFICATION BY EMPLOYER. In addition to any indemnification to
         which Employee may be entitled in his capacity as an officer and
         director of Employer, Employer shall indemnify, defend and hold
         harmless Employee from and against any and all costs, expenses, losses,
         damages, claims, liabilities, obligations, actions or causes of action
         (including, without limitation, reasonable attorneys' fees and
         expenses) incurred, sustained or suffered by him as a result of any
         claim, suit, cause of action, investigation or proceeding, whenever
         instituted or commenced, against Employee by a third party that is not
         directly or indirectly affiliated or related to Employee, arising out
         of the actions or inactions of Employer with respect to Employer's
         business prior to March 22, 2000. Should any claim covered by the
         indemnity provided in Section 13 be asserted, Employee shall promptly
         notify Employer and give Employer an opportunity to defend the same
         either in Employer's name or, as required by applicable laws and
         regulations, in Employee's name; provided, that the failure to give
         prompt notice shall not affect the rights of Employee to
         indemnification hereunder except to the extent that such failure either
         shall have materially prejudiced Employer in the defense of such claim
         or shall have increased the amount of the obligation of Employer.
         Employee shall extend reasonable cooperation in connection with such
         defense and shall have the right, at his own expense, to participate
         in, but not to control, any such defense by Employer. If Employer shall
         fail, after notice from Employee, to defend against such claim within a
         reasonable time, then Employee shall be entitled to assume the defense
         thereof, and Employer shall be liable to repay Employee for all of his
         expenses reasonably incurred in connection with such defense, including
         reasonable attorney's fees and settlement payments. No settlement shall
         be made by Employee of any claim which Employer has assumed pursuant to
         this Section 13, or of any other claim or actions with respect to which
         indemnification is claimed hereunder, without the prior written consent
         of Employer, so long as such consent is not unreasonably withheld or
         delayed.

3
<PAGE>

14.      NO RESTRICTIONS. Employee represents and warrants to Employer that he
         is not subject to any covenant, agreement, understanding or restriction
         of any kind or nature which would prohibit, restrict or interfere in
         any way with his ability to perform the functions of his positions with
         Employer.

15.      MISCELLANEOUS.

         15.1     INTEGRATION. This Agreement and the Stock Option Agreement of
                  even date herewith contains the entire agreement and
                  understanding among the parties relative to the subject matter
                  hereof and supersedes all prior agreements and understandings
                  relating thereto.

         15.2     APPLICABLE LAW. This Agreement and the rights of the parties
                  will be governed by and construed and enforced under the laws
                  of the state of Minnesota. The venue for any action hereunder
                  will be in the state of Minnesota, and the parties consent to
                  the jurisdiction of the courts of the state of Minnesota,
                  County of Hennepin, and the U.S. District Court, District of
                  Minnesota.

         15.3     BINDING EFFECT. Except as herein provided, this Agreement will
                  be binding upon and will benefit the parties and their
                  respective heirs, successors, assigns and personal
                  representatives; provided, however, that Employee may not
                  assign his rights or obligations hereunder without Employer's
                  prior written consent. Employer may assign its rights and
                  obligations under this Agreement, provided the assignee agrees
                  to fulfill Employer's obligations hereunder.

         15.4     NOTICES. All notices, requests and other communications
                  hereunder will be given in writing and deemed to have been
                  given if personally delivered, or sent by first class,
                  certified mail, return receipt requested, postage prepaid, to
                  the party at the address as provided below, or to such other
                  address as such party may hereafter designate by written
                  notice to the other party:

                  (a)      If to Employer, to the address of its then principal
                           office.

                  (b)      If to Employee, to the address last shown in
                           Employer's records.

         15.5     MODIFICATION. This Agreement will not be modified or amended
                  except by a written instrument signed by the parties.

         15.6     SEVERABILITY. The invalidity or partial invalidity of any
                  portion of this Agreement will not invalidate the remainder
                  thereof. If any provision of this Agreement is, for any
                  reason, held to be excessively broad as to scope, activity,
                  subject or otherwise, so as to be unenforceable at law, such
                  provision will be construed by the appropriate judicial body
                  by limiting or reducing it, so as to be enforceable to the
                  maximum extent compatible with then applicable law.

4
<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date herein first above written.

                                       EMPLOYER:

                                       Grow Biz International, Inc.

Dated:    March 22, 2000               By:  /s/ Ronald G. Olson
                                           -------------------------------------
                                            Ronald G. Olson, Vice Chairman

                                       EMPLOYEE:

Dated:    March 22, 2000               By:  /s/ John L. Morgan
                                           -------------------------------------
                                            John L. Morgan

5
<PAGE>

                                                                       EXHIBIT A

                          GROW BIZ INTERNATIONAL, INC.
                       NONQUALIFIED STOCK OPTION AGREEMENT

                                                                  March 22, 2000

TO:      John L. Morgan (the "OPTIONEE")

         As the new Chief Executive Officer of Grow Biz International, Inc., a
Minnesota corporation (the "COMPANY"), you are hereby granted an option (the
"OPTION"), pursuant to a resolution of the Board of Directors of the Company
adopted on March 22, 2000.

         The Option entitles you to purchase up to 600,000 shares of Common
Stock (the "STOCK") of the Company at a price of $5.00 per share, which was in
excess of the sales price of the Stock as reported on the NASDAQ SmallCap Market
as of the time of the approval of the grant of this Option and as of the close
of business on the date immediately prior to the date of the grant of this
Option.

         Your Option is in all respects limited and conditioned by the following
terms and conditions:

1.       DEFINITIONS. In addition to definitions that may be contained elsewhere
         herein, for purposes of this Agreement and the Option, the following
         terms, when capitalized, shall have the following meanings:

                  (a)      "AGREEMENT" means this written agreement evidencing
                           the Option granted hereunder which is signed by both
                           the Company and Optionee.

                  (b)      "BOARD" means the Board of Directors of the Company.

                  (c)      "CODE" means the Internal Revenue Code of 1986, as
                           amended from time to time, and any successor thereto.

                  (d)      "DISABILITY" means disability as defined in Section
                           22(e)(3) of the Code.

                  (e)      "FAIR MARKET VALUE" means, as of any given date,
                           unless otherwise determined by the Board in good
                           faith, the closing sales price of the Stock for that
                           date as reported on the NASDAQ SmallCap Market.

2.       OPTION TERMS. You will be entitled to purchase up to 120,000 shares of
         Stock on March 22, 2001, and an additional 120,000 shares on each of
         March 22, 2002, March 22, 2003, March 22, 2004 and March 22, 2005, so
         long as you are still serving as Chief Executive Officer of the Company
         on such date. If you cease serving as Chief Executive Officer of

6
<PAGE>

         the Company, any nonvested portion of the Option is terminated
         immediately, and any vested portion is exercisable for thirty (30) days
         following the last day on which you served as Chief Executive Officer
         of the Company or until the expiration of the Option, whichever period
         is shorter.

3.       TERM. This Option expires in its entirety on March 22, 2006. Subject to
         the vesting schedule set forth in Section 2 hereof, the Option may be
         exercised in whole or in part at any time during the term of the
         Option.

4.       EXERCISE. The Option may be exercised by delivery of the attached
         Notice of Exercise to the Company. The exercise price may be paid in
         cash, by certified check, or by transfer to the Company of shares of
         Stock having a Fair Market Value, as of the date of exercise, not less
         than the purchase price of the Stock being acquired pursuant to your
         Option, or any combination thereof. The Company's obligation to deliver
         shares upon the exercise of the Option will be subject to applicable
         federal, state, and local tax withholding requirements. Unless
         otherwise determined by the Board, withholding obligations may be
         settled with Stock, including Stock received as part of the exercise
         giving rise to the withholding requirement.

5.       DEATH. If Optionee's service to the Company as Chief Executive Officer
         of the Company terminates by reason of death, the Option held by
         Optionee may thereafter be exercised by the legal representative of
         Optionee's estate or by any person who acquires the Option by will or
         the laws of descent and distribution for a period of one year from the
         date of such death or until the expiration of the stated term of the
         Option, whichever period is shorter. The Option shall be exercisable
         only to the extent that the Option was exercisable as of the date of
         death.

6.       DISABILITY. If Optionee's service to the Company as Chief Executive
         Officer of the Company terminates by reason of Disability, Optionee may
         exercise such portion of the Option as was exercisable at the date of
         termination for a period of one year from the date of termination or
         until the expiration of the stated term of the Option, whichever period
         is shorter. The Option shall be exercisable only to the extent that the
         Option was exercisable as of the date termination.

7.       NONTRANSFERABILITY. The Option is transferable only by will or the laws
         of descent and distribution or pursuant to a qualified domestic
         relations order as defined by the Code or Title I of the Employee
         Retirement Income Security Act ("ERISA"), or the rules thereunder.
         Except as permitted by the preceding sentence, neither the Option nor
         any of the rights and privileges thereby conferred may be transferred,
         assigned, pledged, or hypothecated in any way (whether by operation of
         law or otherwise), and no such option, right, or privilege will be
         subject to execution, attachment, or similar process. The Option may be
         exercised during Optionee's lifetime only by Optionee or his or her
         guardian or legal representative.

8.       INVESTMENT INTENT. Unless a registration statement under the Securities
         Act of 1933 (and applicable state securities laws) is in effect with
         respect to Stock to be purchased pursuant

7
<PAGE>

         to this Option, you agree with, and represent to, the Company that you
         are acquiring the Option and Stock for the purpose of investment and
         with no present intention to transfer, sell, or otherwise dispose of
         the Stock. In the absence of such registration, no shares of Stock
         acquired pursuant to the exercise, in whole or in part, of the Option
         may be transferred unless, in the opinion of counsel to the Company,
         such transfer is in compliance with applicable securities laws, and
         each certificate representing any shares of Stock issued to Optionee
         hereunder will have endorsed thereon an appropriate legend referring to
         the restrictions against transfer. Prior to the transfer of any Stock
         to you, the Company may require an opinion of counsel satisfactory to
         it that at all times the Company will be in compliance with applicable
         federal and state securities laws.

9.       ADJUSTMENT IN CAPITALIZATION. In the event of any merger,
         reorganization, consolidation, recapitalization, Stock dividend, Stock
         split, or other change in corporate structure affecting the Stock, such
         substitution or adjustment will be made in the number and option price
         of shares purchasable hereunder, in the aggregate number of shares
         reserved for issuance with respect to the Option, and in the number and
         option price of shares subject to any outstanding portion of the Option
         as may be determined to be appropriate by the Board to prevent dilution
         or enlargement of Option rights granted hereunder, provided that the
         number of shares subject to the Option will always be a whole number.

10.      NONQUALIFIED OPTION. This Option is not intended to be an "incentive
         stock option" as defined in the Code and is granted outside any stock
         option plan adopted by the Company.

11.      NONEXCLUSIVITY. The granting of the Option will not be construed as
         limiting the power of the Board to adopt such other incentive
         arrangements as it may deem desirable, including the granting of other
         stock options. Such arrangements may be either generally applicable or
         applicable only in specific cases.

12.      GOVERNING LAW. The Option and this Agreement will be governed by and
         construed in accordance with the laws of the State of Minnesota without
         regard to conflicts of laws principles, and all terms will be
         interpreted and construed so that there will not be committed any
         violation of applicable state or federal securities laws.

13.      NO RIGHT TO SERVE. The granting of the Option does not grant Optionee
         any right of service as a director, and the Company retains the right
         to terminate service of Optionee as its Chief Executive Officer, or
         otherwise, pursuant to Company's Articles of Incorporation, Bylaws and
         applicable law.

8
<PAGE>

         IN WITNESS WHEREOF, Company and Optionee have each executed this
Agreement effective as of the date first above written.

COMPANY:                                      OPTIONEE:

GROW BIZ INTERNATIONAL, INC.

/s/ Ronald G. Olson                           /s/ John L. Morgan
----------------------------------            ----------------------------------
By:  Ronald G. Olson                          John L. Morgan
Its: Vice Chairman

9
<PAGE>

                       NOTICE OF EXERCISE OF STOCK OPTION
                          AND RECORD OF STOCK TRANSFER

TO:      Grow Biz International, Inc.
         4200 Dahlberg Drive
         Golden Valley, MN 55422-4837

         I hereby exercise my stock option granted by Grow Biz International,
Inc. ("COMPANY"), effective March 22, 2000, subject to all terms and provisions
thereof and notify you of my desire to purchase ________ shares of Common Stock
of the Company ("SHARES"), offered to me pursuant to said Option. Enclosed is a
certified check in the sum of $________ or payment in such other form as the
Company has specified.

         [THIS SECTION IS APPLICABLE IF THE SHARES ARE NOT REGISTERED UNDER THE
SECURITIES ACT OF 1933.] I hereby represent that the Shares are being acquired
by me as an investment and not with a view to, or for resale in connection with,
the distribution of any shares of the Company. I understand that the Shares are
not registered under the Securities Act of 1933, as amended ("ACT"), or
applicable state securities laws, that the Shares may not be sold or otherwise
transferred except pursuant to an effective registration statement under the Act
and said laws, unless the Company has received an opinion of counsel
satisfactory to it that such transfer or disposition does not require
registration under the Act or said laws and, for any sales under Rule 144 of the
Act, such evidence as it shall request for compliance with that rule or
applicable state securities laws. I further understand that the certificate
representing the Shares will contain a legend referring to such restrictions.

         I acknowledge that I am responsible for payment of any taxes for which
I may become liable as a result of the exercise of this Option.

                      ,                /s/ John L. Morgan
---------------------- ------          -----------------------------------------
                                       John L. Morgan

         RECEIPT is hereby acknowledged of the delivery to me by Grow Biz
International, Inc. on _______________, _____ of stock certificate no. _________
for __________ shares of Common Stock purchased by me pursuant to the terms and
conditions of the option agreement referred to above.

                                       /s/ John L. Morgan
                                       -----------------------------------------
                                       John L. Morgan

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