Document:

PROVIDENCE CAPITAL I, INC.

         THIS PRE-INCORPORATION CONSULTATION AND SUBSCRIPTION AGREEMENT

This Agreement (the "Agreement") is made and entered into this 24th day
of November, 1999, by and between Richard Nadeau, Jr., James
R. Simmons, Mark T. Thatcher, Jim Brennan, Doug Dyer, David Pequet,
Mark Margason and Chris Werner (hereinafter collectively referred to as
the "parties").

     WHEREAS, the parties desire to form a corporation pursuant to
the laws of the State of Colorado, under the name of Providence Capital I,
Inc. (the "Company"), to engage, in the business of acting as a
capital market access vehicle by registering its securities with the U.S.
Securities and Exchange Commission under the Securities Exchange Act
of 1934, and thereafter seeking to acquire one or more existing businesses
through merger or acquisition; and

     WHEREAS, the parties desire to subscribe for the acquisition of
stock to be issued upon formation of the Company, and have mutually
agreed that the consideration for the issuance of such shares shall be pre-
incorporation services and assistance to the Company relating to its
formation, determination of an appropriate capital structure, and in
developing its business plan.

     NOW, THEREFORE, in consideration of the foregoing, and in
consideration of the mutual covenants and promises hereinafter set forth,
it is agreed as follows:

1.  Agreement to Form Corporation.  The undersigned parties hereby
agree to form a corporation pursuant to the laws of the State of Colorado,
under the name of PROVIDENCE CAPITAL I, INC. (the "Company"). The
corporation shall be formed for the purpose of acting as a capital market
access vehicle by registering its securities with the U.S. Securities and
Exchange Commission under the Securities Exchange Act of 1934, and
thereafter seeking to acquire one or more existing businesses through
merger or acquisition.

<PAGE>

2.  Preincorporation Services.  By execution of this Agreement, each of
the undersigned hereby agrees to provide such services as may be
necessary or appropriate prior to the incorporation of the Company, for
purposes of determining the feasibility of, and completing, the Company's
business plan, including, but not limited to, determining the Company's
capital needs, establishing an appropriate capital structure, investigating
the likelihood of finding a suitable merger or acquisition target, reviewing
applicable legal and regulatory restrictions imposed by the Securities and
Exchange Commission, the National Association of Securities Dealers,
and other governmental or regulatory organizations, and the like.

3.  Agreement to Serve as Incorporator.  By execution of this Agreement,
the parties hereby agree to serve as incorporator of the Company and
to provide services in conjunction with its incorporation and in
conjunction with the preparation of all necessary organizational
documents, including, but not limited to, articles of incorporation, bylaws,
subscription agreements, organizational meeting minutes, and the like.

4.  Agreement to Serve as Officers and Directors.  By execution of this
Agreement, the parties  hereby agree to serve as officers and directors
of the Company following its incorporation, and in that capacity,
to assume responsibility for implementation of the Company's business plan.

5.  Consideration.  As consideration for the services described herein,
upon formation of the Company, the undersigned shall cause the
Company to issue and deliver to each of the parties hereto, and each of
the parties hereto hereby agrees to accept the following as full
consideration for the services rendered:

<TABLE>
<CAPTION>

Name              Date of       Shares       Aggregate      Purchase
                  Sale                       Purchase       Price
                                             Price          per Share

<S>               <C>           <C>          <C>            <C>

Richard P. Nadeau 11-24-99      100,000      $380.00(1)     $0.0038

James R. Simmons  11-24-99      100,000      $380.00(1)     $0.0038

Mark T. Thatcher  11-24-99      100,000      $380.00(1)     $0.0038

<PAGE>

Jim Brennan       11-24-99      100,000      $380.00(1)     $0.0038

Doug Dyer         11-24-99      100,000      $380.00(1)     $0.0038

David Pequet      11-24-99      100,000      $380.00(1)     $0.0038

Mark Margason     11-24-99      100,000      $380.00(1)     $0.0038
<FN>
<F1>Each unit consists of one share of Common Stock.
<F2>The agreed upon fair market value of the Units for purposes of this
Agreement is $0.0038 per Unit.  Accordingly, upon issuance such Units
shall be valued on the books of the Company at $0.0038 per Unit.

</FN>
</TABLE>

6.  Exemption from Registration.  The parties hereto intend and agree that
this Agreement shall serve as a written compensatory contract which,
upon formation of the Company, satisfies the requirements of Rule 701
adopted by the Securities and Exchange Commission under the Securities
Act of 1933, as amended.  Accordingly, it is the intent of the parties that
the exemption from registration provided by Rule 701 shall be applicable
to the issuance of the Units.

7.  Representations and Acknowledgments.  The parties hereto make the
following representations and acknowledgments:

(a)       Neither the Units, nor the underlying securities shall, upon
issuance, have been registered under the Securities Act of 1933, as
amended (the "Act"), or under any State Blue Sky or securities laws and
only the Company can register such securities under the Act or under
applicable State Blue Sky or securities laws.

(b)       Upon issuance, the Units and the underlying securities shall
constitute "restricted securities" as that term is defined in Rule 144 under
the Act.

(c)       Following issuance, neither the Units nor the underlying securities
may be sold or transferred for value without registration under the
Securities Act of 1933, as amended, or under applicable State blue sky or
securities laws, or in the absence of an opinion of counsel acceptable to
the Company that such registration is not required under such Act or
Acts, and it is not anticipated that the Company will, at any time, seek to
register the Units or the underlying securities under the Act or under any
applicable state blue sky or securities laws.

<PAGE>

(d)       Following its formation and the issuance of the Units, the
Company may, from time to time, make stop transfer notations in the
Company's records to assure compliance with the Act and any applicable
State blue sky or securities laws.

(e)       In accordance with the foregoing restrictions, the parties hereby
agree that a legend substantially to the effect of the following may be
placed upon all certificates representing the shares and the warrants
comprising the Units:

"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR UNDER
OTHER SECURITIES LAWS.  SUCH SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (i)
THEY SHALL HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE
SECURITIES ACT, OR (ii) THE COMPANY SHALL HAVE BEEN
FURNISHED WITH AN OPINION OF COUNSEL, SATISFACTORY
TO COUNSEL FOR THE COMPANY, THAT REGISTRATION IS
NOT REQUIRED UNDER ANY OF SUCH ACTS."

(f)       The parties hereto are acquiring the Units upon issuance solely for
their own account and not on behalf of any other person.

(g)       The parties hereto are acquiring the Units upon issuance for
investment purposes and not with the present intent of reselling or
otherwise distributing the Units or the underlying securities.

(h)       By execution of this Agreement, the parties hereto agree to
execute and deliver to the Company, following its formation, any
document, or do any other act or thing, which the Company may
reasonably request in connection with the acquisition of the Units.

8.  Assignment.  None of the parties hereto, or their heirs, executors,
representatives or assigns shall sell, assign, create a security interest in,
pledge, or otherwise transfer or encumber the Units to be issued
hereunder, or the underlying securities, without the express prior written
consent of each of the other parties hereto.

9.  Colorado Law.  This Agreement shall be governed by, and construed
in accordance with the laws of the State of Colorado.

<PAGE>

10.  Binding Effect.  This Agreement shall inure to the benefit of, and be
binding upon the parties, and their respective heirs, executors,
representatives and permitted assigns.

11.  Entire Agreement.  This Agreement supersedes all agreements
previously made between the parties relating to its subject matter.  There
are no other understandings or agreements between the parties.

IN WITNESS WHEREOF, this Preincorporation Consultation and
Subscription Agreement Regarding PROVIDENCE CAPITAL I, INC., has been
executed as of the day and year first above written.

/s/Richard Nadeau, Jr.

/s/James R. Simmons

/s/Mark T. Thatcher

/s/Jim Brennan

/s/Doug Dyer

/s/David Pequet

/s/Mark Margason

/s/Chris Werner

                           PROVIDENCE CAPITAL I, INC.

                             SUBSCRIPTION AGREEMENT

                           AND INVESTOR QUESTIONNAIRE

<PAGE>

                           PROVIDENCE CAPITAL I, INC.
                                 (THE "COMPANY")

INSTRUCTIONS TO SUBSCRIPTION AGREEMENT

This section must be completed by all
Wisconsin, Rhode Island, Illinois and Tennessee resident investors.

PLEASE FOLLOW DIRECTIONS BELOW.

     1.Complete pages 2, 7, 9 (if applicable), 10 and 13.   If you would like
a representative of the Company to contact you regarding any questions about
the Company call (423) 265-5062.

     2.Make sure to complete the signature page 7.

     3.Please make check payable in the amount of $___________, to PROVIDENCE
CAPITAL I, INC. (minimum investment: $0.0038/1,000 Shares).

<PAGE>

                              SUBSCRIPTION AGREEMENT

Providence Capital I, Inc.
735 Broad Street
Suite 800
Chattanooga, TN 37402

     Re:     Regulation D, Rule 506 Corporate Offering -
             734,000 Shares at $0.0038/Share of Company Common Stock

Gentlemen:

     1. Subscription. The undersigned hereby subscribes for and agrees to
purchase ___________________________ (       ) share(s) (the "Shares"), at a
price of $0.0038 per Share of common stock (the "Common Stock") of Providence
Capital I, Inc. (the "Company"), a Colorado corporation, for a total purchase
price of __________________ Dollars ($__________.00) (the "Purchase Price"),
in accordance with the terms and conditions of the offering (the "Offering")
made by the Company pursuant to the exemptions to registration afforded by
Rule 506 of the Securities Act of 1933 (the "Act") dated November 24, 1999,
(the "Disclosure Document"). This Subscription Agreement (the "Agreement") may
be rejected in whole or in part by the Company.

     2. Payment of Purchase Price. The undersigned hereby tenders his or her
personal or certified check or a bank cashier's or treasurer's check made
payable to the order of "Providence Capital I, Inc." for the full amount of
the Purchase Price, namely, $0.0038) for each Share purchased by the
undersigned (the "Purchase Price"), together with a fully completed and signed
Confidential Investor Questionnaire, a copy of which is attached hereto as
Exhibit A.  A stock certificate of the Company, representing the aggregate
number of shares of Common Stock of the Company that the undersigned is
purchasing (the "Shares"), will be delivered to the undersigned promptly after
the successful completion of the Offering.

     3. Acknowledgment of Receipt of Certain Documents and Instruments. The
undersigned hereby acknowledges his or her receipt of this subscription
agreement.  Also, the undersigned may request in writing to receive any one,
or all, of the exhibits set forth below for inspection:

<PAGE>

Exhibits   Description

(1.1)-     Articles of Incorporation of the Company, as amended;

(2.1)-     Bylaws of the Company;

(3.1)-     Specimen Form of the Company's Common Stock Certificate;

(4.1)-     Instruments Defining Rights of Security Holders/Minutes of
           Annual/Special Meetings of the Company;

(5.1)-     Opinion of Nadeau & Simmons, P.C.

     4. Representations and Warranties. The undersigned hereby represents and
warrants to the Company and its directors, officers and control persons, as
follows:

          (a) He or she is a citizen of the United States and is at least 21
years of age.

          (b) The residence of the undersigned set forth below is the true and
correct residence of the undersigned and he or she has no present intention of
becoming a resident or domiciliary of any other state, country or
jurisdiction.

          (c) He or she has received and read, and is familiar with, the
contents of the Disclosure Document and all of the Exhibits thereto that have
been requested for inspection (itemized in Section 4, above).

          (d) The shares of Common Stock of the Company for which the
undersigned hereby subscribes will be acquired by the undersigned for
investment only, for the undersigned's own account, and not with a view to,
for offer for sale or for sale in connection with, the distribution or
transfer thereof. The shares of Common Stock of the Company are not being
purchased for subdivision or fractionalization thereof; and the undersigned
has no contract, undertaking, agreement or arrangement with any person or
entity to sell, hypothecate, pledge, donate or otherwise transfer (with or
without consideration) to any such person or entity any shares of Common Stock
of the Company which the undersigned hereby subscribes, and the undersigned
has no present plans or intention to enter into any such contract,
undertaking, agreement or arrangement.

<PAGE>

          (e) The present financial condition of the undersigned is such that
he or she is under no present or contemplated future need to dispose of any
portion of the shares of Common Stock of the Company for which the undersigned
hereby subscribes to satisfy any existing or contemplated undertaking, need or
indebtedness.

     5. Acknowledgment of Certain Facts. The undersigned acknowledges his or
her awareness and understanding of the following:

          (a) This Agreement may be rejected in whole or in part by the
Company in its sole and absolute discretion.

          (b) The Company was organized in November, 1999.

          (c) The purchase of one or more Shares is a speculative investment
which involves a high degree of risk of loss by the undersigned of his or her
entire investment in the Shares.

          (d) Any "Risk Factors" set forth in a Disclosure Document.

          (e) No federal or state agency has made any finding or determination
as to the fairness for public investment, nor any recommendation or
endorsement, of the Shares.

          (f) Although there may not be restrictions on the transferability of
the shares of Common Stock of the Company; there may be no market for the
shares of Common Stock of the Company and, accordingly, it may not be possible
for the undersigned to liquidate readily, or at all, his or her investment in
the Company in case of an emergency or otherwise.

          (g) The shares of Common Stock of the Company have not been
registered under either the federal Securities Act of 1933 (the "Act") or
applicable state securities laws (the "State Acts").

          (h) The Company will file periodic reports with the Securities and
Exchange Commission ("SEC") pursuant to the provisions of the Securities
Exchange Act of 1934, as amended.

          (i) All instruments, documents, records and books pertaining to this
investment have been made available for inspection by the undersigned's
attorney and accountant and the undersigned, and that the books and records of
the Company will be available upon reasonable notice, for inspection by
investors during reasonable business hours at its principal place of business.
There is available to the undersigned, by contacting Mark T. Thatcher,
President of the Company, the opportunity to ask questions and receive answers
concerning the terms and conditions of the Offering and to obtain any
additional information which the Company possesses or can obtain without
unreasonable effort or expenses that is necessary to verify the information
contained in the Disclosure Document.

<PAGE>

     6. Notices. Any notices or other communications required or permitted
hereby shall be given by registered or certified, U. S. first-class mail,
postage prepaid, return receipt requested, and if to the Company, at the
address at the beginning of this Agreement, and if to the undersigned, at the
address set forth below his or her signature hereto, or to such other
addresses as either the Company or the undersigned shall designate to the
other by notice in writing. All such notices and other communications shall be
deemed to be received when given, as aforesaid.

     7. Successors and Assigns. This Agreement shall be binding upon the
Company and shall inure to the benefit of the Company, its directors, officers
and control persons, and its respective successors, heirs, personal and legal
representatives, guardians and assigns. This Agreement shall be binding upon
and inure to the benefit of the undersigned and his or her heirs, personal and
legal representatives and guardians. Neither this Agreement nor any part of it
shall be assignable by the undersigned.

     8. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Colorado, and to the
extent it involves any United States statute, in accordance with the laws of
the United States.

     IN WITNESS WHEREOF, the undersigned has executed, sealed and delivered
this Subscription Agreement this ______________ day of November , 1999.

SUBSCRIPTION

(a)     Minimum Subscription                              $  3.80
        (1,000 Shares @$0.0038/share)(1,000 Shares)

(b)     Maximum Subscription                              $380.00
        (100,000 Shares @$0.0038/share)(100,000 Shares)

(c)     Number of Shares                                  _______________

        TOTAL COMMITMENT                                  $______________

WITNESS:

(Signature of Subscriber)

STATE OF                 )
                         )     ss:
CITY/COUNTY OF           )

On __________________, 1999, before me, the undersigned, a Notary Public,
personally appeared __________________________, well known to me to be the
person(s) whose name(s) is/are subscribed to the foregoing instrument and
acknowledged that he/she/they executed the same.

     WITNESS my hand and official seal.

                                   Notary Public
                                   My Commission Expires:

<PAGE>

                                     EXHIBIT A

                             PROVIDENCE CAPITAL I, INC.

                        CONFIDENTIAL INVESTOR QUESTIONNAIRE

     The Shares offered for sale pursuant to the registration exemption
afforded by Rule 506 of the Act and accompanying Disclosure Document dated
November 24, 1999, of the common stock (the "Common Stock") of Providence
Capital I, Inc. (the "Company") a Colorado corporation, have not been
registered under the Securities Act of 1933 (the "Act"), or under the
securities laws of any state (the "State Acts"), and are being offered for
sale and sold in reliance upon exemptions from the registration requirements
of the Act and the State Acts. As a result, this Questionnaire must be
completed by each potential investor in order to assist the Company in
determining whether the offer for sale and sale of the Shares will qualify
under such exemptions.

     All information furnished is for the use of the Company and its
respective counsel and accountants. Such information will be held in
confidence by such persons, except that this Confidential Investor
Questionnaire may be furnished to such parties as the Company and its
respective counsel and accountants deem necessary or desirable to establish
compliance with federal or state securities laws.

<PAGE>

SPECIAL NOTE:

CORPORATIONS, PARTNERSHIPS, TRUSTS, AND OTHER ENTITIES

     Subscribers which are corporations, partnerships, trusts, or other
entities should have an authorized corporate officer, general partner,
trustee, or other authorized representative complete Section I of this
Confidential Investor Questionnaire, giving information concerning such
representative, and may optionally complete Section II of the Confidential
Investor Questionnaire giving information concerning the entity. In addition,
the following information should be provided with respect to the entity:

1.     Name of Subscriber (Entity):
       Address:
       City:      County:      State:
       Telephone:
       Form (i.e., corporation, partnership, trust, other entity):
       State in which organized:
       States in which business conducted:
       State in which business primarily conducted:

2. Is the Subscriber subscribing for that number of Shares having a total
purchase price of at least $150,000 and which does not exceed 20% of the
Subscriber's net worth?

               Yes               No

3. Was the Subscriber organized for the specific purpose of purchasing the
Shares?

               Yes               No

<PAGE>

SECTION I

(ALL SUBSCRIBERS, OR THEIR AUTHORIZED CORPORATE OFFICER, GENERAL PARTNER,
TRUSTEE OR OTHER AUTHORIZED REPRESENTATIVE, IF THE SUBSCRIBER IS A
CORPORATION, PARTNERSHIP, TRUST, OR OTHER ENTITY, MUST COMPLETE THIS SECTION
I, GIVING INFORMATION CONCERNING HIMSELF OR HERSELF.)

(Please Print. Attach Additional Pages
Where Necessary to Answer Questions Fully.)

1.     Name:                                 Telephone:

       Residence     Address:

       City:             County:            State:     Zip:

       Business Name:

       Business Address:

       City:         County:         Zip:       Telephone:

       Date of Birth:            Social Security Number:

       Communications should be sent to (check one):

       Business:               Residence Address:

<PAGE>

                                   SECTION II
                          "ACCREDITED INVESTOR" STATUS

(ONLY "ACCREDITED INVESTORS" MAY SUBSCRIBE TO THIS OFFERING AND MUST SATISFY
ONE OF THE CRITERIA SET FORTH BELOW.)

(a)  Accredited investor.

"Accredited investor" shall mean any person who comes within any of the
following categories, or who the issuer reasonably believes comes within any
of the following categories, at the time of the sale of the securities to that
person:

(1)  Any bank as defined in section 3(a)(2) of the Act, or any savings and
loan association or other institution as defined in section 3(a)(5)(A) of the
Act whether acting in its individual or fiduciary capacity; any broker or
dealer registered pursuant to section 15 of the Securities Exchange Act of
1934; any insurance company as defined in section 2(13) of the Act; any
investment company registered under the Investment Company Act of 1940 or a
business development company as defined in section 2(a)(48) of that Act; any
Small Business Investment Company licensed by the U.S. Small Business
Administration under section 301(c) or (d) of the Small Business Investment
Act of 1958; any plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets
in excess of $5,000,000; any employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 if the investment decision is
made by a plan fiduciary, as defined in section 3(21) of such act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made
solely by persons that are accredited investors;

(2)  Any private business development company as defined in section 202(a)(22)
of the Investment Advisers Act of 1940;

<PAGE>

(3)  Any organization described in section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the securities offered, with
total assets in excess of $5,000,000;

(4)  Any director, executive officer, or general partner of the issuer of the
securities being offered or sold, or any director, executive officer, or
general partner of a general partner of that issuer;

(5)  Any natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of his purchase exceeds $1,000,000;

(6)  Any natural person who had an individual income in excess of $200,000 in
each of the two most recent years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a reasonable expectation of
reaching the same income level in the current year;

(7)  Any trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in &sect;230.506(b)(2)(ii);
and

(8)  Any entity in which all of the equity owners are accredited investors.
SUBSCRIBERS MAY BE REQUIRED TO SUBMIT ADDITIONAL INFORMATION TO THE COMPANY TO
ENABLE THE COMPANY TO DETERMINE THE SUBSCRIBER'S SUITABILITY UNDER APPLICABLE
FEDERAL OR STATE LAWS OR TO VERIFY THE INFORMATION PROVIDED.

The Subscriber acknowledges that the Company and its directors, officers, and
control persons are relying upon the representations and warranties concerning
the Subscriber set forth in this Confidential Investor Questionnaire. The
Subscriber affirms, represents, and warrants to the Company and its directors,
officers, and control persons that he/she has read this entire document and
that all information provided by such investor is true, correct, accurate, and
complete and may be relied upon for purposes of determining the availability
of an exemption from registration for the offer and sale of the Shares.

(Date)                              (Signature)

                                    (Printed or typed name)

November 24, 1999

CONFIDENTIAL

The Shareholders
Providence Capital I, II, III, IV, V,
VI, VII, VIII, IX and X, Inc.
c/o Nadeau & Simmons, P.C.
1250 Turks Head Building
Providence, RI 02903

     Re:Investment Representation Letter

Ladies and Gentlemen:

In connection with the issuance of the outstanding capital stock of Providence
Capital I, II, III, IV, V, VI, VII, VIII, IX and X, Inc., Colorado development
stage corporations ( hereinafter collectively referred to as "PC"), and
pursuant to issuances of stock in reliance on the exemptions from registration
prescribed by Rule 701 and Rule 506 of Regulation D of the Securities Act of
1933 (the "Securities Act") made to you as individual(s) who are officers,
directors, members or affiliates of PC (the "Stockholders"), you, the
undersigned, hereby make the following certifications and representations with
respect to the Common Stock that is being issued to you (the "Shares").

The undersigned is either an "accredited investor," as that term is defined in
Regulation D of the Securities Act or prior to the issuance of Common Stock,
(i) has been given an opportunity by PC to ask questions and receive answers
concerning PC and to obtain any additional information from PC that is
necessary to make an informed decision regarding the receipt of shares, and
(ii) has been advised by PC of the limitations on resale.

By answering the questions listed below, the undersigned further represents
that he/she has the educational background and the business and financial
knowledge and experience necessary to evaluate the prospective interest in PC,
or may rely on a representative to evaluate the interest on his/her behalf:

Page 2
The Shareholders
November 24, 1999
_____________________

1.     Please describe your educational background, indicating degrees
obtained.

2.a)   Please state your present occupation, employer, primary business
address, and business phone number.

(b)    Please describe your occupational history briefly.  Specific employers
need not be identified.  What is sought is a description of your experience in
financial and business matters.

3.     Please indicate your prior experience in investing in new, speculative,
companies.

4.     Please indicate any other relevant investment experience.

5.     Please describe any pre-existing personal or business relationship
between you and PC or any of its officers or directors.

6.     If you have a background or experience in the business conducted by PC,
please describe.

Page 3
The Shareholders
November 24, 1999
_________________________

The undersigned represents and warrants that the undersigned is receiving the
Shares solely for the undersigned's account for investment and not with a view
to or for sale or distribution of the Shares or any part thereof.  The
undersigned also represents that the entire legal and beneficial interests of
the Shares the undersigned is receiving will be held for the undersigned's
account only.

The undersigned understands that the Shares have not been registered under the
Securities Act on the basis that no distribution or public offering of the
Shares is to be effected.  The undersigned realizes that the basis for the
exemption may not be present if, notwithstanding the undersigned's
representations, the undersigned has in mind merely receiving the Shares for a
fixed or determinable period in the future, or for a market rise, or for sale
if the market does not rise.  The undersigned has no such intention.

The undersigned recognizes that the Shares being received must be held
indefinitely unless they are subsequently registered under the Securities Act
or an exemption from such registration is available.  The undersigned is aware
that the Shares may not be sold pursuant to Rule 144 adopted under the
Securities Act ("Rule 144") unless certain conditions are met including, among
other things, (1) the availability of certain current public information about
PC, (2) the passage of required holding periods under Rule 144 and (3)
compliance with limitations on the volume of shares which may be sold during
any three-month period. The undersigned acknowledges that the certificates
representing the Shares will be legended to reflect these restrictions.

The undersigned further agrees not to make any disposition of all or any part
of the Shares being received in any event unless and until:

1.The Shares are transferred pursuant to Rule 144; or

2.PC shall have received a letter secured by the undersigned from the
Securities and Exchange Commission stating that no action will be recommended
to the Commission with respect to the proposed disposition; or

3.There is then in effect a registration statement under the Securities Act
covering such proposed disposition and such disposition is made in accordance
with said registration statement; or

Page 4
The Shareholders
November 24, 2000
_________________________

4.(i) The undersigned shall have notified PC of the proposed disposition and
shall have furnished PC with a detailed statement of the circumstances
surrounding the proposed disposition and (ii) the undersigned shall have
furnished PC with an opinion of counsel for the undersigned to the effect that
such disposition will not require registration of such Shares under the
Securities Act.

                                   Signature

                                   _________________________________

                                   Print Name

                                   __________________________________<PAGE>

                              CONSULTING AGREEMENT

     Consulting Agreement ("Agreement") by and among HOLLIS-EDEN
PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), WILLIAM H. TILLEY
and JACMAR/VIKING, L.L.C. ("Consultant") as of the 8th of March, 1999 (the
"Effective Date").

                                    RECITALS

     Whereas, the Company's Board of Directors has appointed Tilley to fill a
vacancy on the Board of Directors and to serve as a Director of the Company;

     WHEREAS, Tilley desires to serve on the Company's Board of Directors;

     WHEREAS, the Company desires to retain Consultant to make Tilley available
to provide certain investor relations consulting service to the Company; and

     WHEREAS, Consultant desires to provide certain investor relations
consulting service to the Company.

     NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants hereinafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:

1.  TERMS.

     1.1 DUTIES OF CONSULTANT. The Company hereby retains Consultant to provide
investor relations consulting services for and during the term hereof, subject
to the direction of the Chief Executive Officer of the Company and the terms and
conditions hereof. Specifically, Consultant shall cause Tilley to introduce the
Company to, and act as the Company's liaison with, and provide the Company with
his opinions and recommendations with respect to, potential investors, strategic
partners and existing and potential investment bankers, broker-dealers,
analysts, market makers and underwriters, and taking other actions intended to
enhance stockholder value as reasonably requested by the Chief Executive Officer
of the Company. Consultant hereby accepts such retention under the terms and
conditions set forth in this Agreement. Consultant agrees to cause Tilley to
devote part of his business time and services to the faithful performance of the
duties, responsibilities, and authorities which may be reasonably assigned to
Consultant hereunder. It is understood that Tilley will not be providing his
services, through Consultant or otherwise, on a full-time basis.

     1.2 BOARD MEMBERSHIP. Tilley agrees to serve on the Board of Directors of
the Company during the term of this Agreement.

     1.3 TERM. Unless sooner terminated as provided in Section 1.5 hereof, this
Agreement has become effective as of the date set forth above and shall continue
in force and effect until the third anniversary of the date hereof.

                                       1.
<PAGE>

     1.4 COMPENSATION. As compensation for services rendered by Consultant, the
Company shall grant to Consultant a warrant to purchase 500,000 shares of the
Company's common stock at an exercise price of $20.50 per share. Such warrant
shall be transferable, shall not include a net exercise provision, shall contain
customary S-3 registration rights and shall expire on the third anniversary of
the date of this agreement. A form of such warrant is attached as Exhibit "A"
hereto. The Company may also grant such other stock options and other incentives
to Consultant for consulting services or to Tilley for serving as a director as
the Company's Board of Directors may determine in its sole discretion.

     1.5 TERMINATION. Notwithstanding any other provisions in this Agreement:

          (A) DEATH. If Tilley dies during the term of this Agreement, this
     Agreement shall automatically terminate as of the date of his death; and
     the Company shall have no further obligation to Consultant, Tilley or
     Tilley's estate, except to pay Consultant or Tilley, as the case may be,
     any accrued, but unpaid compensation under Section 1.4 hereof.

          (B) VOLUNTARY TERMINATION BY CONSULTANT. In the event that during the
     term hereof, Consultant shall voluntarily terminate this Agreement, or
     Consultant shall refuse to perform the services required hereunder, then,
     in such event, this Agreement shall automatically be terminated and
     Consultant shall have the right to receive any unpaid compensation or
     reimbursements to the date of termination, but no other compensation.

     1.6 EXPENSE REIMBURSEMENT AND TRAVEL ADVANCES. Consultant or Tilley, as the
case may be, shall be entitled to reimbursement for any and all reasonable
expenses, including travel and entertainment, incurred by Consultant or Tilley,
as the case may be, in the performance of this Agreement. Consultant or Tilley,
as the case may be, will take all actions necessary to maintain the tax
deductibility of any such expenses by the Company and shall submit vouchers
prior to reimbursement for expenses. All expense report vouchers of Consultant
or Tilley, as the case may be, shall be approved by the Chief Executive Officer
of the Company. Expenses in excess of $1,000.00 per occurrence must be approved
in advance by the Chief Executive Officer of the Company.

     1.7 PROTECTION FROM LIABILITY. The Company may provide Tilley with
appropriate insurance coverage as necessary to protect Tilley from any and all
personal liability incurred in the normal performance of Tilley's designated
duties. The Company agrees to indemnify Tilley to the fullest extent permitted
by law for any liabilities in connection with the lawful performance of services
hereunder.

2. PROTECTIVE COVENANTS. Because (i) Consultant and Tilley will become fully
familiar with all aspects of the Company's business during the period of this
Agreement with the Company, (ii) certain information of which Consultant and
Tilley will gain knowledge during this Agreement is proprietary and confidential
information which is of special and peculiar value to the Company, (iii) if any
such proprietary and confidential information were imparted to or became known
by any persons, including Consultant and Tilley, engaging in a business in
competition with that of the Company, hardship, loss and irreparable injury and
damage could result to the Company, the measurement of which would be difficult
if not impossible to ascertain, and (iv) it is necessary for the Company to
protect its business from such damage, the following covenants constitute a
reasonable and appropriate means, consistent with the best interests of
Consultant, Tilley and the

                                       2.
<PAGE>

Company, to protect the Company against such damage and shall apply to and be
binding upon Consultant and Tilley as provided herein:

     2.1 NON-COMPETITION BY CONSULTANT. Consultant and Tilley covenant that,
during the term of this Agreement and for a period of one year thereafter,
neither Consultant nor Tilley will engage in or participate in any business
which is in competition with the business of the Company on the date of
termination and which continues during the period of non-competition.
Notwithstanding the foregoing, Consultant and/or Tilley may make passive
investments in the aggregate of less than 5% of the outstanding equity
securities in any entity listed for trading on a national stock exchange or
quoted on any recognized automatic quotation system.

     2.2 TRADE SECRETS, PROPRIETARY AND CONFIDENTIAL INFORMATION. Consultant and
Tilley recognizes that their position with the Company is one of the highest
trust and confidence by reason of Consultant's and Tilley's access to and
contact with trade secrets and confidential and proprietary information of the
Company. Consultant and Tilley shall use their best efforts and exercise utmost
diligence to protect and safeguard the trade secrets and confidential and
proprietary information of the Company. Consultant and Tilley covenant that
during the term of this Agreement and thereafter, they will not disclose,
disseminate or distribute to another, nor induce any other person to disclose,
disseminate, or distribute, any trade secret or proprietary or confidential
information of the Company, directly or indirectly, for Consultant's or Tilley's
own benefit or for the benefit of another, whether or not acquired, learned,
obtained or developed by Consultant or Tilley use or cause to be used, any trade
secret, proprietary or confidential information in any way except as is required
in the course of the services to the Company hereunder. The foregoing shall not
apply to information which becomes public or other than as a result of the
prohibited acts of Consultant or Tilley. All confidential information relating
to the business of the Company, whether prepared by Consultant or Tilley or
otherwise coming into its or his possession, shall remain the exclusive property
of the Company and shall not, except in the good faith furtherance of the
business of the Company, be removed from the premises of the Company under any
circumstances whatsoever without the prior written consent of the Company.

     2.3 REMEDIES. In the event of breach or threatened breach by Consultant or
Tilley of any provision of this Section 2, the Company shall be entitled to
apply for relief by temporary restraining order, temporary injunction, or
permanent injunction and to all other relief to which it may be entitled,
including any said breach, violation or threatened breach or violation. The
Company may pursue any remedy available to it concurrently or consecutively in
any order as to any breach, violation, and the pursuit of any one of such
remedies at any time will not be deemed an election of remedies or waiver of the
right to pursue any other of such remedies as to such breach, violation, or as
to any other breach, violation, or threatened breach or violation.

3.  MISCELLANEOUS.

     3.1 NOTICES. All notices, requests, consents and other communications under
this Agreement shall be in writing and shall be deemed to have been delivered
(i) on the date personally delivered or (ii) two days after the date deposited
in a receptacle maintained by the United States Postal Services for such
purpose, addressed as set forth below, or (iii) one day after properly sent by
Federal Express, addressed as set forth below:

                                       3.
<PAGE>

          If to Consultant:   JacMar/Viking, L.L.C.
                              2200 W. Valley Boulevard
                              Alhambra, CA 91803

          If to Tilley:       William H. Tilley
                              2200 W. Valley Boulevard
                              Alhambra, CA 91803

          with a copy to:     Latham & Watkins
                              701 "B" Street, Suite 2100
                              San Diego, CA  92102
                              Attn:  Donald P. Newell, Esq.

          If to the Company:  Hollis-Eden Pharmaceuticals, Inc.
                              9333 Genesee Avenue, Suite 110
                              San Diego, CA  92121
                        Fax:  (619) 558-6470
                       Attn:  Chief Executive Officer

          with a copy to:     Cooley Godward LLP
                              4365 Executive Drive, Suite 1100
                              San Diego, CA  92121
                        Fax:  (619) 453-3555
                       Attn:  Eric J. Loumeau, Esq.

Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto as provided above.

     3.2 SEVERABILITY. If any provision contained in this Agreement is
determined to be void, illegal or unenforceable, in whole or in part, then the
other provisions contained herein shall remain in full force and effect as if
the provision which was determined to be void, illegal, or unenforceable had not
been contained herein.

     3.3 WAIVER, MODIFICATION AND INTEGRATION. The waiver by any party hereto of
a breach of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach of any party. This instrument, and the
documents referred to herein, contain the entire agreement of the parties and
supersede any and all other agreements either oral or in writing, between the
parties hereto with respect to services of Consultant and Tilley to the Company
and contain all of the covenants and agreements between the parties with respect
to such services in any manner whatsoever. This Agreement may not be modified,
altered or amended except by written agreement of all parties hereto.

     3.4 RELATIONSHIP. Consultant is an independent contractor and is
responsible for the withholding and payment of any applicable employment-related
taxes or unemployment compensation. This Agreement does not establish any
partnership, joint venture or other business association between the parties,
and Consultant shall have no interest in the management, business or property of
the Company, except as specifically provided herein.

     3.5 GOVERNING LAW. This Agreement shall be governed by the internal laws of
the State of California, without regard to its conflicts of law principles.

                                       4.
<PAGE>

     3.6 TILLEY CONSENT. Tilley hereby agrees to make his services available to
Consultant to the extent necessary for Consultant to perform its obligations
hereunder. The Company is an intended third-party beneficiary of the covenant
set forth in the preceding sentence.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

                                         HOLLIS-EDEN PHARMACEUTICALS, INC.,
                                         a Delaware corporation

                                         By: /s/ RICHARD B. HOLLIS
                                            ------------------------------------
                                                 Richard B. Hollis, CEO

                                         JACMAR/VIKING, L.L.C.
                                         a Delaware limited liability company

                                         By:  THE JACMAR COMPANIES
                                              a California corporation
                                              Its:  Managing Member

                                              By: /s/ JAMES A. DAL POZZO
                                                 -------------------------------
                                                      James A. Dal Pozzo,
                                                      President

                                              By: /s/  WILLIAM H. TILLEY
                                                 -------------------------------
                                                       William H. Tilley

                                       5.
<PAGE>

                                                                     No. W-99-5

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS.  SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.

                       WARRANT TO PURCHASE 500,000 SHARES
                               OF COMMON STOCK OF
                       HOLLIS-EDEN PHARMACEUTICALS, INC.
                           (Void after March 7, 2002)

     This certifies that Jacmar/Viking, L.L.C., or its assigns (the "Holder"),
for value received, is entitled to purchase from Hollis-Eden Pharmaceuticals,
Inc., a Delaware corporation (the "Company"), having a place of business at 9333
Genesee Avenue, Suite 110, San Diego, California 92121, a maximum of 500,000
fully paid and nonassessable shares of the Company's Common Stock ("Common
Stock") for cash at a price of $20.50 per share (the "Stock Purchase Price") at
any time or from time to time up to and including 5:00 p.m. (Pacific time) on
March 7, 2002 (the "Expiration Date"), upon surrender to the Company at its
principal office (or at such other location as the Company may advise the Holder
in writing) of this Warrant properly endorsed with the Form of Subscription
attached hereto duly filled in and signed and, if applicable, upon payment in
cash or by check of the aggregate Stock Purchase Price for the number of shares
for which this Warrant is being exercised determined in accordance with the
provisions hereof. The Stock Purchase Price and the number of shares purchasable
hereunder are subject to adjustment as provided in Section 3 of this Warrant.

     This Warrant is subject to the following terms and conditions:

     1.   EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES. This Warrant
is exercisable at the option of the holder of record hereof, at any time or from
time to time, up to the Expiration Date for all or any part of the shares of
Common Stock (but not for a fraction of a share) which may be purchased
hereunder. The Company agrees that the shares of Common Stock purchased under
this Warrant shall be and are deemed to be issued to the Holder hereof as the
record owner of such shares as of the close of business on the date on which
this Warrant shall have been surrendered, properly endorsed, the completed,
executed Form of Subscription delivered and payment made for such shares.
Certificates for the shares of Common Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's expense within a reasonable time after the rights represented by this
Warrant have been so exercised. In case of a purchase of less than all the
shares which may be purchased under this Warrant, the Company shall cancel this
Warrant and execute and deliver a new Warrant or Warrants of like tenor for the
balance of the shares purchasable under the Warrant surrendered upon such
purchase to the Holder hereof within a reasonable time. Each stock certificate
so delivered shall be in such denominations of Common Stock as may be requested
by the Holder hereof and shall be registered in the name of such Holder.

                                      1.
<PAGE>

     2.   SHARES TO BE FULLY PAID; RESERVATION OF SHARES; LISTING OF SHARES. The
Company covenants and agrees that all shares of Common Stock which may be issued
upon the exercise of the rights represented by this Warrant will, upon issuance,
be duly authorized, validly issued, fully paid and nonassessable and free from
all preemptive rights of any stockholder and free of all taxes, liens and
charges with respect to the issue thereof. The Company further covenants and
agrees that, during the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized and
reserved, for the purpose of issue or transfer upon exercise of the subscription
rights evidenced by this Warrant, a sufficient number of shares of authorized
but unissued Common Stock, or other securities and property, when and as
required to provide for the exercise of the rights represented by this Warrant.
The Company will take all such action as may be necessary to assure that such
shares of Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange upon which the Common Stock may be listed; provided, however, that
other than as set forth in Section 11 hereof, the Company shall not be required
to effect a registration under Federal or State securities laws with respect to
such exercise. As long as the Warrant shall be outstanding, the Company shall
use its best efforts to cause all shares of Common Stock issuable upon the
exercise of the Warrant to be listed (subject to official notice of issuance) on
all securities exchanges on which the Common Stock may then be listed and/or
quoted. The Company will not take any action which would result in any
adjustment of the Stock Purchase Price (as set forth in Section 3 hereof) if the
total number of shares of Common Stock issuable after such action upon exercise
of all outstanding options, warrants and convertible securities, together with
all shares of Common Stock then outstanding, would exceed the total number of
shares of Common Stock then authorized by the Company's Certificate of
Incorporation.

     3.   ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.

     3.1  SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall at any
time subdivide its outstanding shares of Common Stock into a greater number of
shares, the Stock Purchase Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the outstanding shares
of Common Stock of the Company shall be combined into a smaller number of
shares, the Stock Purchase Price in effect immediately prior to such combination
shall be proportionately increased.

     3.2  DIVIDENDS IN COMMON STOCK, OTHER STOCK, PROPERTY, RECLASSIFICATION. If
at any time or from time to time the Holders of Common Stock (or any shares of
stock or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive, without payment
therefor,

                                     2.
<PAGE>

          (a)  Common Stock or any shares of stock or other securities which are
at any time directly or indirectly convertible into or exchangeable for Common
Stock, or any rights or options to subscribe for, purchase or otherwise acquire
any of the foregoing by way of dividend or other distribution, or

          (b)  Common Stock or additional stock or other securities or property
(including cash) by way of spinoff, split-up, reclassification, combination of
shares or similar corporate rearrangement, (other than shares of Common Stock
issued as a stock split or adjustments in respect of which shall be covered by
the terms of Section 3.1 above), then and in each such case, the Holder hereof
shall, upon the exercise of this Warrant, be entitled to receive, in addition to
the number of shares of Common Stock receivable thereupon, and without payment
of any additional consideration therefor, the amount of stock and other
securities and property (including cash in the cases referred to in clause (b)
above and this clause (c) which such Holder would hold on the date of such
exercise had he been the holder of record of such Common Stock as of the date on
which holders of Common Stock received or became entitled to receive such shares
or all other additional stock and other securities and property.

     3.3  REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE. If
any recapitalization, reclassification or reorganization of the capital stock of
the Company, or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets or other
transaction shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities, or other assets or property (a
"Transaction"), then, as a condition of such Transaction, lawful and adequate
provisions shall be made by the Company whereby the Holder hereof shall
thereafter have the right to purchase and receive (in lieu of the shares of the
Common Stock of the Company immediately theretofore purchasable and receivable
upon the exercise of the rights represented hereby) such shares of stock,
securities or other assets or property as may be issued or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such stock immediately theretofore purchasable and
receivable upon the exercise of the rights represented hereby; provided,
however, that in the event the fair market value of the stock, securities or
other assets or property (determined in good faith by the Board of Directors of
the Company) issuable or payable with respect to one share of the Common Stock
of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby is in excess of the Stock Purchase
Price hereof effective at the time of a merger and securities received in such
reorganization, if any, are publicly traded, then this Warrant shall expire
unless exercised prior to such Transaction. In the event of any Transaction,
appropriate provision shall be made by the Company with respect to the rights
and interests of the Holder of this Warrant to the end that the provisions
hereof (including, without limitation, provisions for adjustments of the Stock
Purchase Price and of the number of shares purchasable and receivable upon the
exercise of this Warrant) shall thereafter be applicable, in relation to any
shares of stock, securities or assets thereafter deliverable upon the exercise
hereof. The Company will not effect any such consolidation, merger or sale
unless, prior to the consummation thereof, the successor corporation (if other
than the Company) resulting from such consolidation or the corporation
purchasing such assets shall assume by written instrument reasonably
satisfactory in form and substance to the Holders of a majority of the warrants
to purchase Common Stock then outstanding, executed and mailed or delivered to
the registered Holder hereof at the last address of such Holder appearing on the
books of the Company, the obligation to deliver to such Holder

                                      3.
<PAGE>

such shares of stock, securities or assets as, in accordance with the foregoing
provisions, such Holder may be entitled to purchase.

     3.4  CERTAIN EVENTS. If any change in the outstanding Common Stock of the
Company or any other event occurs as to which the other provisions of this
Section 3 are not strictly applicable or if strictly applicable would not fairly
protect the purchase rights of the Holder of the Warrant in accordance with such
provisions, then the Board of Directors of the Company shall make an adjustment
in the number and class of shares available under the Warrant, the Stock
Purchase Price or the application of such provisions, so as to protect such
purchase rights as aforesaid. The adjustment shall be such as will give the
Holder of the Warrant upon exercise for the same aggregate Stock Purchase Price
the total number, class and kind of shares as he would have owned had the
Warrant been exercised prior to the event and had he continued to hold such
shares until after the event requiring adjustment.

     3.5  NOTICES OF CHANGE.

          (a)  Within 30 days after any adjustment in the number or class of
shares subject to this Warrant and of the Stock Purchase Price, the Company
shall give written notice thereof to the Holder, setting forth in reasonable
detail and certifying the calculation of such adjustment.

          (b)  The Company shall also give written notice to the Holder at least
10 business days prior to the date on which a Transaction shall take place.

     4.   ISSUE TAX. The issuance of certificates for shares of Common Stock
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax (other than any applicable income taxes) in
respect thereof; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the then
Holder of the Warrant being exercised.

     5.   CLOSING OF BOOKS. The Company will at no time close its transfer books
against the transfer of any warrant or of any shares of Common Stock issued or
issuable upon the exercise of any warrant in any manner which interferes with
the timely exercise of this Warrant.

     6.   NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent or to receive notice as a stockholder of
the Company or any other matters or any rights whatsoever as a stockholder of
the Company. No dividends or interest shall be payable or accrued in respect of
this Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
holder to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the holder hereof, shall give rise to any liability of
such Holder for the Stock Purchase Price or as a stockholder of the Company,
whether such liability is asserted by the Company or by its creditors.

                                      4.
<PAGE>

     7.   REPRESENTATIONS AND WARRANTS OF THE HOLDER.

     7.1  PURCHASE FOR OWN ACCOUNT. Holder represents that it is acquiring this
Warrant and the Common Stock issuable upon exercise of this Warrant
(collectively, the "Securities") solely for its own account and beneficial
interest for investment and not for sale or with a view to distribution of the
Securities or any part thereof, has no present intention of selling (in
connection with a distribution or otherwise), granting any participation in, or
otherwise distributing the same, and does not presently have reason to
anticipate a change in such intention.

     7.2  INFORMATION AND SOPHISTICATION. Holder acknowledges that it has
received all the information it has requested from the Company and considers
necessary or appropriate for deciding whether to acquire this Warrant. Holder
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of this
Warrant and to obtain any additional information necessary to verify the
accuracy of the information given the Holder. Holder further represents that it
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risk of this investment.

     7.3  ABILITY TO BEAR ECONOMIC RISK. Holder acknowledges that investment in
this Warrant involves a high degree of risk, and represents that it is able,
without materially impairing its financial condition, to hold the Securities for
an indefinite period of time and to suffer a complete loss of its investment.

     7.4  FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting the
representations set forth above, Holder further agrees not to make any
disposition of all or any portion of the Securities unless and until:

          (a)  There is then in effect a Registration Statement under the 1933
Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or

          (b)  (i)  Holder shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by the Company, Holder shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration under the 1933 Act.

          (c)  Notwithstanding the provisions of paragraphs (a) and (b) above,
no such registration statement or opinion of counsel shall be necessary for a
transfer by Holder to a stockholder or partner (or retired partner) of such
Holder, or transfers by gift, will or intestate succession to any spouse or
lineal descendants or ancestors, if all transferees agree in writing to be
subject to the terms hereof to the same extent as if they were a Holder
hereunder.

     8.   WARRANTS TRANSFERABLE. Subject to compliance with applicable federal
and state securities laws, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the holder hereof (except
for transfer taxes), upon surrender of this Warrant

                                      5.
<PAGE>

properly endorsed. Each taker and holder of this Warrant, by taking or holding
the same, consents and agrees that this Warrant, when endorsed in blank, shall
be deemed negotiable, and that the holder hereof, when this Warrant shall have
been so endorsed, may be treated by the Company, at the Company's option, and
all other persons dealing with this Warrant as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented by this
Warrant, or to the transfer hereof on the books of the Company any notice to the
contrary notwithstanding; but until such transfer on such books, the Company may
treat the registered owner hereof as the owner for all purposes.

     9.    RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant shall survive the
exercise of this Warrant.

     10.   MODIFICATION AND WAIVER. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.

     11.   REGISTRATION RIGHTS.

     11.1  Within one (1) year following the date of this Warrant (provided that
the parties may agree to file sooner to take advantage of the Company's
eligibility to use Form S-3), the Company will prepare and file with the SEC a
registration statement on Form S-3 (or such other form that the Company may be
eligible to use) relating to the sale of the shares of Common Stock issuable
upon exercise of this Warrant (the "Shares") by Holder from time to time (the
"Registration Statement"), and use its best efforts, subject to receipt of
necessary information from Holder, to cause such Registration Statement to be
declared effective by the Securities and Exchange Commission (the "SEC") as soon
as practicable after the SEC has completed its review process. The Company
agrees to use its best efforts to keep such Registration Statement effective
until the earlier of (i) the date on which all the Shares have been sold by
Holder and (ii) the date on which the Shares may be resold by Holder without
registration by reason of Rule 144(k) under the Act of 1933 or any other rule of
similar effect. The Company shall file all reports required to be filed by the
Company with the SEC in a timely manner and take all other necessary action so
as to maintain such eligibility for the use of Form S-3 (or its successor or
equivalent). Notwithstanding the foregoing, following the effectiveness of the
Registration Statement, the Company may, at any time, suspend the effectiveness
of the Registration Statement for up to no longer than 30 days, as appropriate
(a "Suspension Period"), by giving notice to the Holder, if the Company shall
have determined that the Company may be required to disclose any material
corporate development. The Company will use its best efforts to minimize the
length of any Suspension Period. Notwithstanding the foregoing, no more than two
Suspension Periods may occur in any twelve (12) month period. Holder agrees
that, upon receipt of any notice from the Company of a Suspension Period, Holder
will not sell any Shares pursuant to the Registration Statement until (i) Holder
is advised in writing by the Company that the use of the applicable prospectus
may be resumed, (ii) Holder has received copies of any additional or
supplemental or amended prospectus, if applicable, and (iii) Holder has received
copies of any additional or supplemental filings which are incorporated or
deemed to be incorporated by reference in such prospectus. Holder further
covenants to notify the Company promptly of the sale of all of its Shares.

                                      6.
<PAGE>

     11.2  The Company shall furnish to Holder promptly after the Registration
Statement is prepared and publicly distributed, filed with the SEC, or received
by the Company, one copy of the Registration Statement and any amendment
thereto, each preliminary prospectus and prospectus and each amendment or
supplement thereto. The Company shall furnish to Holder such number of copies of
prospectuses and preliminary prospectuses in conformity with the requirements of
the Securities Act, in order to facilitate the public sale or other disposition
of all or any of the Shares by Holder; provided, however, that the obligation of
the Company to deliver copies of prospectuses or preliminary prospectuses to the
Holder shall be subject to the receipt by the Company of reasonable assurances
from the Holder that the Holder will comply with the applicable provisions of
the Securities Act and of such other securities or blue sky laws as may be
applicable in connection with any use of such prospectuses or preliminary
prospectuses. The Company shall bear all expenses incurred by the Company in
connection with the registration of the Shares pursuant to the Registration
Statement.

     11.3  The Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein and, as of the dates such documents
were filed, all documents incorporated by reference therein) shall not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein not
misleading.

     11.4  INDEMNIFICATION. For the purpose of this Section 11:

           (i)  the term "Holder/Affiliate" shall include Holder and any
affiliate of Holder;

           (ii) the term "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 11.1.

           (a)  The Company agrees to indemnify and hold harmless Holder and
each person, if any, who controls Holder within the meaning of the Securities
Act, against any losses, claims, damages, liabilities or expenses to which
Holder or such controlling person may become subject, under the Securities Act,
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any
other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof as
contemplated below) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, including the prospectus, financial statements and schedules, and all
other documents filed as a part thereof or incorporated by reference therein, as
amended at the time of effectiveness of the Registration Statement, including
any information deemed to be a part thereof as of the time of effectiveness
pursuant to paragraph (b) of Rule 430A, or pursuant to Rule 434, of the Rules
and Regulations, or the prospectus, in the form first filed with the SEC
pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) filing is required (the
"Prospectus"), or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state in any of them a material
fact required to be stated therein or necessary to make the statements in any of
them not misleading, and will reimburse Holder and each such controlling person
for any

                                      7.
<PAGE>

legal and other expenses as such expenses are reasonably incurred by Holder or
such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage, liability or expense arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company (i) by or on behalf of Holder expressly for
use therein or (ii) the failure of Holder to comply with the covenants and
agreements contained in this Warrant respecting the sale of the Shares, the
inaccuracy of any representations made by Holder herein or any statement or
omission in any Prospectus that is corrected in any subsequent Prospectus that
was delivered to Holder prior to the pertinent sale or sales by Holder. In
addition to its other obligations under this paragraph (a), the Company agrees
that, as an interim measure during the pendency of any claim, action,
investigation, inquiry or other proceeding arising out of or based upon any
statement or omission, or any alleged statement or omission, or any inaccuracy
in the representations and warranties of the Company in this Agreement or
failure to perform its obligations in this Agreement, all as described in this
paragraph (a), it will reimburse Holder on a quarterly basis for all reasonable
legal or other expenses incurred in connection with investigating or defending
any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation, to reimburse Holder for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, Holder shall
promptly return it to the Company together with interest, compounded daily,
determined on the basis of the prime rate (or other commercial lending rate for
borrowers of the highest credit standing) announced from time to time by Bank of
America National Trust and Savings Association, San Francisco, California (the
"Prime Rate"). Any such interim reimbursement payments which are not made to a
Holder within 30 days of a request for reimbursement shall bear interest at the
Prime Rate from the date of such request. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.

           (b)  Holder will indemnify and hold harmless the Company, each of its
directors, each of its officers who signed the Registration Statement and each
person, if any, who controls the Company within the meaning of the Securities
Act, against any losses, claims, damages, liabilities or expenses to which the
Company, each of its directors, each of its officers who signed the Registration
Statement or controlling person may become subject, under the Securities Act,
the Exchange Act, or any other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of Holder) insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of or are based upon any untrue or alleged
untrue statement of any material fact contained in the Registration Statement,
the Prospectus, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information furnished
to the

                                      8.
<PAGE>

Company by or on behalf of Holder expressly for use therein, and will reimburse
the Company, each of its directors, each of its officers who signed the
Registration Statement or controlling person for any legal and other expense
reasonably incurred by the Company, each of its directors, each of its officers
who signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action. In addition to its other obligations under
this paragraph (b), Holder agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or based upon any failure to comply, statement or omission, or
any alleged failure to comply, statement or omission, described in this
paragraph (b) which relates to written information furnished to the Company by
or on behalf of Holder, it will reimburse the Company (and, to the extent
applicable, each officer, director or controlling person) on a quarterly basis
for all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of Holder's obligations to reimburse the
Company (and, to the extent applicable, each officer, director or controlling
person) for such expenses and the possibility that such payments might later be
held to have been improper by a court of competent jurisdiction. To the extent
that any such interim reimbursement payment is so held to have been improper,
the Company (and, to the extent applicable, each officer, director or
controlling person) shall promptly return it to Holder together with interest,
compounded daily, determined on the basis of the Prime Rate. Any such interim
reimbursement payments which are not made to the Company within 30 days of a
request for reimbursement shall bear interest at the Prime Rate from the date of
such request. This indemnity agreement will be in addition to any liability
which Holder may otherwise have.

           (c)  Promptly after receipt by an indemnified party under this
Section 11.4 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 11.4 notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in this
Section 11.4 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 11.4 for any
legal or other expenses subsequently incurred

                                      9.
<PAGE>

by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by such
indemnifying party in the case of paragraph (a), representing the indemnified
parties who are parties to such action) or (ii) the indemnified party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of action, in each of which cases the fees and expenses of counsel
shall be at the expense of the indemnifying party.

           (d)  If the indemnification provided for in this Section 11.4 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) of this Section 11.4 in respect to any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of any losses, claims, damages, liabilities or expenses referred to
herein in such proportion as is appropriate to reflect the relative fault of the
Company and Holder in connection with the statements or omissions or
inaccuracies in the representations and warranties in this Warrant which
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The relative fault of the Company
and Holder shall be determined by reference to, among other things, whether the
untrue or alleged statement of a material fact or the omission or alleged
omission to state a material fact or the inaccurate or the alleged inaccurate
representation and/or warranty relates to information supplied by the Company or
by Holder and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in paragraph (c) of this Section 11.4 any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
paragraph (c) of this Section 11.4 with respect to notice of commencement of any
action shall apply if a claim for contribution is to be made under this
paragraph (d); provided, however, that no additional notice shall be required
with respect to any action for which notice has been give under paragraph (c)
for purposes of indemnification. The Company and Holder agree that it would not
be just and equitable if contribution pursuant to this Section 11.4 were
determined solely by pro rata allocation (even if Holder were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this paragraph.
Notwithstanding the provisions of this Section 11.4, the Holder shall not be
required to contribute any amount in excess of the amount by which the amount
paid by Holder paid for the Shares that were sold pursuant to the Registration
Statement and the amount received by Holder from such sale exceeds the amount of
any damages that Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

           (e)  It is agreed that any controversy arising out of the operation
of the interim reimbursement arrangements set forth in paragraphs (a) and (b) of
this Section 11.4,

                                      10.
<PAGE>

including the amounts of any requested reimbursement payments and the method of
determining such amounts, shall be settled by arbitration conducted under the
provisions of the Judicial Arbitration and Mediation Service (JAMS) and shall be
held in San Diego, California. Any such arbitration must be commenced by service
of a written demand for arbitration or a written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of any arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in paragraphs (a) and (b) of this
Section 11.4 and would not resolve the ultimate propriety or enforceability of
the obligation to reimburse expenses which is created by the provisions of such
paragraphs (a) and (b).

     12.  NOTICES. Any notice, request or other document required or permitted
to be given or delivered to the holder hereof or the Company shall be delivered
or shall be sent by certified mail, postage prepaid, to each such holder at his
address as shown on the books of the Company or to the Company at the address
indicated therefor in the first paragraph of this Warrant or such other address
as either may from time to time provide to the other.

     13.  BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Common Stock issuable upon the exercise of this Warrant
shall survive the exercise and termination of this Warrant. All of the covenants
and agreements of the Company shall inure to the benefit of the successors and
assigns of the holder hereof.

     14.  DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of Delaware.

     15.  LOST WARRANTS. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.

     16.  FRACTIONAL SHARES. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share, pay
the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.

                                     11.
<PAGE>

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its officers, thereunto duly authorized this 8th day of March, 1999.

                              HOLLIS-EDEN PHARMACEUTICALS, INC.
                              a Delaware corporation

                              By: /s/ Richard B. Hollis
                                 -------------------------------------------
                              Name:   Richard B. Hollis
                                   -----------------------------------------
                              Title:  Chairman & Chief Executive Officer
                                    ----------------------------------------

                                      12.
<PAGE>

                                   EXHIBIT A

                               SUBSCRIPTION FORM

                                                 Date:  _________________, 19___

Hollis-Eden Pharmaceuticals, Inc.
9333 Genesee Avenue, Suite 110
San Diego, CA  92121

Attn:  President

Ladies and Gentlemen:

     The undersigned hereby elects to exercise the warrant issued to him by
Hollis-Eden Pharmaceuticals, Inc. (the "Company") and dated ___________ _____,
1999 Warrant No. W-___ (the "Warrant") and to purchase thereunder
________________________________ shares of the Common Stock of the Company (the
"Shares") at a purchase price of ___________________________________________
Dollars ($__________) per Share or an aggregate purchase price of
__________________________________ Dollars ($__________) (the "Purchase Price").

  Pursuant to the terms of the Warrant the undersigned has delivered the
Purchase Price herewith in full in cash or by certified check or wire transfer.

                                    Very truly yours,

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

                                    By:
                                       -------------------------------------

                                    Title:
                                          ----------------------------------

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