<PAGE>

                                                                    EXHIBIT 10.1




                         SECURITIES PURCHASE AGREEMENT





                        Dated as of  March 1, 2001 among

                      UNITED SHIPPING & TECHNOLOGY, INC.,

                        AND THE PURCHASERS NAMED HEREIN
<PAGE>

                               TABLE OF CONTENTS

                                                                           Page

ARTICLE I       DEFINITIONS................................................   1
  Section 1.01    Definitions..............................................   1
ARTICLE II      PURCHASE AND SALE OF SECURITIES............................   4
  Section 2.01    Commitment to Purchase...................................   4
  Section 2.02    The Closings.............................................   4
ARTICLE III     REPRESENTATIONS AND WARRANTIES OF THE ISSUER...............   5
  Section 3.01    Organization, Corporate Power and Licenses...............   5
  Section 3.02    Capital Stock and Related Matters........................   5
  Section 3.03    Subsidiaries; Investments................................   6
  Section 3.04    Authorization; No Breach.................................   6
  Section 3.05    Securities Law Compliance................................   7
  Section 3.06    Commission Documents.....................................   7
  Section 3.07    Financial Statements.....................................   7
  Section 3.08    Absence of Undisclosed Liabilities.......................   8
  Section 3.09    No Material Adverse Change...............................   8
  Section 3.10    Absence of Certain Developments..........................   8
  Section 3.11    Assets...................................................   9
  Section 3.12    Real Property............................................   9
  Section 3.13    Tax Matters..............................................  10
  Section 3.14    Contracts and Commitments................................  11
  Section 3.15    Intellectual Property Rights.............................  12
  Section 3.16    Litigation, etc..........................................  13
  Section 3.17    Brokerage................................................  13
  Section 3.18    Governmental Consent, etc................................  14
  Section 3.19    Insurance................................................  14
  Section 3.20    Employees................................................  14
  Section 3.21    ERISA....................................................  14
  Section 3.22    Compliance with Laws.....................................  16
  Section 3.23    Environmental and Safety Matters.........................  16
  Section 3.24    Affiliated Transactions..................................  17
  Section 3.25    Disclosure...............................................  17
  Section 3.26    Customers and Suppliers..................................  18
  Section 3.27    Reports with the Securities and Exchange Commission......  18
  Section 3.28    Regulatory Matters.......................................  18
  Section 3.29    Shareholder Vote Required................................  19


                                       i
<PAGE>

                               TABLE OF CONTENTS
                                  (continued)

                                                                           Page

  Section 3.30    Knowledge................................................  19
ARTICLE IV      AGREEMENTS, REPRESENTATIONS AND WARRANTIES OF THE
                PURCHASERS.................................................  19
ARTICLE V       COVENANTS OF THE ISSUER....................................  20
  Section 5.01    Access to Information....................................  20
  Section 5.02    Certificate of Designation...............................  20
  Section 5.03    Restrictions Pending the Closings........................  20
  Section 5.04    Reservation of Shares....................................  21
  Section 5.05    Tax Consistency..........................................  21
  Section 5.06    Use of Proceeds..........................................  21
ARTICLE VI      COVENANTS OF THE PURCHASERS................................  21
  Section 6.01    Confidentiality..........................................  21
ARTICLE VII     COVENANTS OF THE ISSUER AND THE PURCHASERS.................  21
  Section 7.01    Certain Filings..........................................  21
  Section 7.02    Public Announcements.....................................  22
ARTICLE VIII    CONDITIONS PRECEDENT TO THE CLOSINGS.......................  22
  Section 8.01    Conditions to Each Party's Obligations...................  22
  Section 8.02    First Closing:  Conditions to Each Purchaser's
                  Obligations..............................................  22
  Section 8.03    Second Closing: Conditions to Each Purchaser's
                  Obligations..............................................  23
  Section 8.04    Conditions to the Issuer's Obligations...................  23
ARTICLE IX      MISCELLANEOUS..............................................  24
  Section 9.01    Notices..................................................  24
  Section 9.02    No Waivers; Amendments...................................  25
  Section 9.03    Survival.................................................  25
  Section 9.04    Indemnification..........................................  25
  Section 9.05    Procedures...............................................  26
  Section 9.06    Termination..............................................  26
  Section 9.07    Successors and Assigns...................................  26
  Section 9.08    GOVERNING LAW; WAIVER OF JURY TRIAL......................  27
  Section 9.09    JURISDICTION.............................................  27
  Section 9.10    Counterparts.............................................  27
  Section 9.11    Entire Agreement.........................................  27
  Section 9.12    Remedies.................................................  27
  Section 9.13    Severability.............................................  28
  Section 9.14    Descriptive Headings; Interpretation.....................  28
  Section 9.15    No Strict Construction...................................  28


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<PAGE>

                         SECURITIES PURCHASE AGREEMENT

     AGREEMENT dated as of March 1, 2001 among United Shipping & Technology,
Inc., a Utah corporation (the "Issuer"), and the purchasers listed in Schedule A
(together, the "Purchasers" and each a "Purchaser").

     WHEREAS, the Issuer desires to sell the Securities (as defined below) to
the Purchasers, and the Purchasers desire to purchase the Securities from the
Issuer, upon the terms and subject to the conditions hereinafter set forth;

     NOW THEREFORE, the parties hereto agree as follows:


                                   ARTICLE I
                                  DEFINITIONS

     Section 1.01 Definitions. The following terms, as used herein, have the
following meanings:

     "Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person, where
"control" means the possession, directly or indirectly, of the power to direct
the management and policies of a Person whether through ownership of voting
securities, contract or otherwise; provided that none of the Purchasers shall be
considered an Affiliate of the Issuer or any of its Subsidiaries.

     "Agreement" means this Agreement, as it may be amended from time to time.

     "Applicable Law" means any applicable constitution, treaty, statute, rule,
regulation, ordinance, order, directive, code, interpretation, judgment, decree,
injunction, writ, determination, award, permit, license, authorization,
directive, requirement, ruling or decision of, agreement with, or by any
Governmental Authority.

     "Certificate of Designation" means the Certificate of Designation for the
Series D Shares, in the form attached as Exhibit A hereto with such changes and
modifications as may be agreed to by the Issuer and the Purchasers.

     "Benefit Plan" has the meaning set forth in Section 3.21.

     "Bridge Note Warrants" means the stock purchase warrants to acquire Series
D Shares originally issued by the Issuer to THLi as of January 4, 2001.

     "Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.

     "Closings" and "Closing" shall have the meaning set forth in Section 2.03.

     "Closing Date" shall have the meaning set forth in Section 2.03.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Commission" means the U.S. Securities and Exchange Commission or any
governmental body or agency succeeding to the functions thereof.

     "Common Stock" means the common stock, par value $.004 per share, of the
Issuer.
<PAGE>

     "Common Warrants" means the stock purchase warrants to purchase shares of
the Issuer's Common Stock originally issued by the Issuer to TH Lee and TH Lee
Parallel as of May 31, 2000.

     "Convertible Bridge Notes" means the Convertible Bridge Notes in the
aggregate amount of $5,000,000, dated January 4, 2001 and January 31, 2001,
issued by the Issuer to THLi.

     "Common Stock Equivalents" has the meaning set forth in Section 3.02.

     "Credit Agreement" means the credit agreement between UST Delivery Systems,
Inc., a Subsidiary of the Issuer, and General Electric Capital Corporation,
dated September 24, 1999, and all documents executed in connection therewith.

     "ERISA" has the meaning set forth in Section 3.21.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "First Closing" shall have the meaning set forth in Section 2.03.

     "Governmental Authority" means any governmental body, agency or official of
any country or political subdivision of any country, including, but not limited
to, federal, state, county and local governments, administrative agencies and
courts.

     "Indebtedness" means at a particular time, without duplication, (i) any
indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money, (ii) any indebtedness evidenced by any note,
bond, debenture or other debt security, (iii) any indebtedness for the deferred
purchase price of property or services with respect to which a Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
and other current liabilities incurred in the ordinary course of business which
are not more than six months past due or being contested in good faith), (iv)
any commitment by which a Person assures a creditor against loss (including,
without limitation, contingent reimbursement obligations with respect to letters
of credit), (v) any indebtedness guaranteed in any manner by a Person
(including, without limitation, guarantees in the form of an agreement to
repurchase or reimburse), (vi) any obligations under capitalized leases with
respect to which a Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or with respect to which obligations a Person assures a
creditor against loss, (vii) any indebtedness secured by a Lien on a Person's
assets and (viii) any unsatisfied obligation for "withdrawal liability" to a
"multiemployer plan" as such terms are defined under ERISA.

     "Intellectual Property Rights" means all (i) patents, patent applications
and patent disclosures, (ii) trademarks, service marks, trade dress, trade
names, logos, corporate names, websites and internet domain names and
registrations and applications for registration thereof together with all of the
goodwill associated therewith, (iii) copyrights and copyrightable works and
registrations and applications for registration thereof, (iv) mask works and
registrations and applications for registration thereof, (v) computer software,
data, data bases and documentation thereof, (vi) trade secrets and other
confidential information (including, without limitation, ideas, formulas,
compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice), know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
designs, plans, proposals, technical data, financial and marketing plans and
customer and supplier lists and information), (vii) other intellectual property
rights and (viii) copies and tangible embodiments thereof (in whatever form or
medium).

     "Investment" as applied to any Person means (i) any direct or indirect
purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interest (including partnership
interests, limited liability company interests and joint venture interests) of
any other Person and (ii) any capital contribution by such Person to any other
Person.


                                       2
<PAGE>

     "Issuable Securities" has the meaning set forth in Section 3.05.

     "Issuer SEC Reports" has the meaning given to it in Section 3.25.

     "Latest Balance Sheet" means the audited balance sheet of the Issuer for
the most recent fiscal year ended July 1, 2000.

     "Leased Property" has the meaning set forth in Section 3.12.

     "Licenses" means all licenses, permits, construction permits, certificates
of public convenience and necessity and other authorizations issued by any
federal, state, county or local Governmental Authorities to the Issuer and its
Subsidiaries and used or necessary in connection with the operation and conduct
of their business, and including any applications for any such licenses,
permits, construction permits and other authorizations applied for by the Issuer
and its Subsidiaries that are currently pending.

     "Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to
Lien any asset that it has acquired or holds subject to the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.

     "Market Price" of any security means the average of the closing prices of
such security's sales on all securities exchanges on which such security may at
the time be listed, or, if there has been no sales on any such exchange on any
day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted in the
NASDAQ System as of 4:00 P.M., New York time, or, if on any day such security is
not quoted in the NASDAQ System, the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each such case averaged over a period of the two (2) consecutive trading days
immediately prior to the day as of which "Market Price" is being determined. If
at any time such security is not listed on any securities exchange or quoted in
the NASDAQ System or the over-the-counter market, the "Market Price" shall be
the fair value thereof determined jointly by the Corporation and the Required
Holders. If such parties are unable to reach agreement within a reasonable
period of time, such fair value shall be determined by an independent appraiser
experienced in valuing securities jointly selected by the Corporation and the
Required Holders. The determination of such appraiser shall be final and binding
upon the parties, and the Corporation shall pay the fees and expenses of such
appraiser.

     "Material Adverse Effect" means any change or effect (or aggregation of
changes and effects) that is or could reasonably be expected to be materially
adverse to the business, assets, condition (financial or otherwise) or results
of operations of the Issuer and its Subsidiaries, taken as a whole.

     "Owned Property" has the meaning set forth in Section 3.12.

     "Person" means an individual or a corporation, partnership, limited
liability company, association, a joint stock company, trust, a joint venture,
an unincorporated organization, or any other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.

     "Real Property" has the meaning set forth in Section 3.12.

     "Registration Rights Agreement" shall mean the Second Amended and Restated
Registration Rights Agreement to be dated as of the First Closing Date by and
among the Issuer and the Purchasers, substantially in the form attached hereto
as Exhibit D.


                                       3
<PAGE>

     "SEC Documents" means all reports, schedules, registration statements and
other documents (including all Exhibits and Schedules thereto) filed by the
Issuer with the Commission.

     "Second Closing" shall have the meaning set forth in Section 2.03.

     "Securities" means the Series D Shares.

     "Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.

     "Series B Shares" means the shares of Series B Convertible Preferred Stock,
par value $.004 per share, of the Issuer.

     "Series C Shares" means the shares of Series C Convertible Preferred Stock,
par value $.004 per share, of the Issuer.

     "Series D Shares" means the shares of Series D Convertible Preferred Stock,
par value $.004 per share, of the Issuer.

     "Series C Warrants" means the stock purchase warrants to purchase Series C
Shares originally issued by the Issuer to THLi as of September 1, 2000 and
September 22, 2000.

     "Subsidiary" means, with respect to any Person any other Person of which a
majority of the capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such Person.

     "THLi" means, collectively, TH Lee Putnam Internet Partners, L.P., TH
Lee.Putnam Internet Parallel Partners, L.P., THLi Coinvestment Partners LLC, and
Blue Star I, LLC.

     "Transaction Agreements" means this Agreement, the Registration Rights
Agreement and the Certificate of Designation.

     "Warrants" means the Series C Warrants and the Common Warrants and the
Bridge Note Warrants.


                                   ARTICLE II
                        PURCHASE AND SALE OF SECURITIES

     Section 2.01 Commitment to Purchase. Upon the basis of the representations
and warranties herein contained of each Purchaser, but subject to the terms and
conditions hereinafter stated, the Issuer agrees to sell to each Purchaser, and
each Purchaser, upon the basis of the representations and warranties herein
contained of the Issuer, but subject to the terms and conditions hereinafter
stated, agrees to purchase from the Issuer at the Closings, the Series D Shares
in the amount and for the aggregate purchase price set forth opposite the name
of such Purchaser on Annex I hereto. The purchase price per Series D Share shall
be (a) $8.00 in the case of all Purchasers other than THLi and (b) in the case
of THLi, the "conversion price" as defined in the Convertible Bridge Notes. The
Series D Shares shall have the rights, terms and privileges set forth in the
Certificate of Designation, a copy of which is attached hereto as Exhibit A.

     Section 2.02 The Closings.

          (a) The first closing (the "First Closing") and the second closing
     (the "Second Closing") (each a "Closing" and together, the "Closings") of
     the purchase and sale of the Securities hereunder shall take place at the
     offices of ___________, ______________, ___________. The First Closing
     shall occur immediately following fulfillment of each of the conditions set
     forth in Sections 8.01, 8.02


                                       4
<PAGE>

     and 8.04, or at such other time and place as the Issuer and the Purchasers
     shall agree in their sole discretion. Subject to fulfillment of the
     conditions set forth in Sections 8.03 and 8.04, the Second Closing shall
     occur on a date specified in writing by the Issuer following the First
     Closing and following the execution of this Agreement by additional
     Investors who become parties to this Agreement following the First Closing.
     The date and time of each Closing are referred to herein as the "First
     Closing Date" and the "Second Closing Date" (each a "Closing Date" and
     together the "Closing Dates").

          (b) At the Closings, each Purchaser, other than THLi, shall deliver to
     the Issuer, by wire transfer to an account designated by the Issuer not
     later than three Business Days prior to each Closing Date, an amount, in
     immediately available funds, equal to the aggregate purchase price of the
     Securities being purchased by such Purchaser. At the First Closing, ThLi
     shall deliver and surrender the Convertible Bridge Notes, which shall be
     converted to Series D Preferred Stock in accordance with its terms.

          (c) At each Closing, the Issuer shall deliver to each Purchaser,
     against payment of the purchase price by such Purchaser to the Issuer (or
     in the case of THLi, deliver the Convertible Bridge Notes) as set forth in
     2.03(b) above, certificates evidencing the Series D Shares being purchased
     by such Purchaser in definitive form and registered in such names as such
     Purchaser shall request not later than two Business Days prior to the
     Closing Date.


                                  ARTICLE III
                  REPRESENTATIONS AND WARRANTIES OF THE ISSUER

     The Issuer represents and warrants to each Purchaser that:

     Section 3.01 Organization, Corporate Power and Licenses. The Issuer is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Utah and is qualified to do business in every jurisdiction in
which its ownership of property or conduct of business requires it to qualify,
except where the failure to be so qualified would not have a Material Adverse
Effect. The Issuer possesses all requisite corporate power and authority and all
material Licenses necessary to own and operate its properties, to carry on its
businesses as now conducted and presently proposed to be conducted and to carry
out the transactions contemplated by this Agreement. The copies of the Issuer's
and each Subsidiary's charter documents and bylaws which have been furnished to
the Purchasers' counsel reflect all amendments made thereto at any time prior to
the date of this Agreement and are correct and complete.

     Section 3.02 Capital Stock and Related Matters.

          (a) As of the First Closing (except as set forth below with respect to
     the Series C Preferred as of the First Closing and the Second Closing, and
     immediately thereafter, the authorized capital stock of the Issuer shall
     consist of (a) 25,000,000 shares of preferred stock, of which (i) 4,500,000
     shares have been designated as Series A Cumulative Convertible Preferred
     Stock (none of which shall be issued and outstanding as of each Closing)
     and (ii) 10,000,000 shares shall be designated as Series B Convertible
     Preferred Stock (2,806,797 of which shall be issued and outstanding as of
     each Closing) and (iii) 5,000,000 shares have been designated as Series C
     Convertible Preferred Stock (2,000,000 of which shall be issued and
     outstanding as of each Closing and the remainder of which shall be reserved
     for issuance upon exercising the Series C Warrants), (iv) 3,000,000 shall
     be designated as Series D Convertible Preferred Stock (none of which shall
     be issued and outstanding prior to the First Closing and up to ________ of
     which shall be issued and outstanding as of the Second Closing after giving
     effect to the Closings (including Series D Shares reserved for conversion
     of a Convertible Bridge Notes dated January 4, 2001 and pursuant to
     exercise of the Bridge Warrant and (v) ________ shares have been designated
     as Series E Convertible Preferred Stock (________ of which shall be issued
     and outstanding as of each closing) and (b)


                                       5
<PAGE>

     75,000,000 shares of Common Stock, of which (i) 16,646,399 shares shall be
     issued and outstanding as of each Closing, (ii) 10,000,000 shares shall be
     reserved for issuance upon conversion of the Series B Shares, (iii)
     5,000,000 shares shall be reserved for issuance upon conversion of the
     Series C Shares, (iv) 12,099,847 shares shall be reserved for issuance upon
     exercise of stock options, warrants (including the Common Warrants but
     excluding the securities described in clause (v) below) and convertible
     securities, (v) certain of the remaining shares are reserved for issuance
     upon the exercise of warrants issued to Bayview Capital Partners L.P., the
     Convertible Subordinated Promissory Note issued to CEX Holdings, Inc, and
     the 9% Convertible Subordinated Promissory Note issued to J. Iver &
     Company, (vi) the issuance of shares of Common Stock to Jack D. Ashabranner
     II (or a trust solely for his benefit) in respect of a court-approved
     settlement of his claim against Corporate Express Delivery Systems, Inc.
     solely to meet any shortfall in the market value between the 600,000 shares
     of Common Stock that have been issued for the benefit of Mr. Ashabranner in
     respect of such settlement and the sum of $550,000, pursuant to the terms
     of such settlement. As of each Closing, neither the Issuer nor any
     Subsidiary shall have outstanding any stock or securities convertible or
     exchangeable for any shares of its capital stock or containing any profit
     participation features, nor shall it have outstanding any rights or options
     to subscribe for or to purchase its capital stock or any stock or
     securities convertible into or exchangeable for its capital stock or any
     stock appreciation rights or phantom stock plans ("Common Stock
     Equivalents"), except for the Series B Shares, the Series C Shares, the
     Series D Shares, the Series E Shares and the Warrants and except as set
     forth on Schedule 3.02 (a). Schedule 3.02 (a) accurately sets forth the
     following information with respect to all outstanding Common Stock
     Equivalents: the holder, the number of shares covered, the exercise price
     and the expiration date. As of each Closing, neither the Issuer nor any
     Subsidiary shall be subject to any obligation (contingent or otherwise) to
     repurchase or otherwise acquire or retire any shares of its capital stock
     or any warrants, options or other rights to acquire its capital stock,
     except as set forth on Schedule 3.02 (a) and except pursuant to the
     Certificate of Designation. As of each Closing, all of the outstanding
     shares of the Issuer's capital stock shall be validly issued, fully paid
     and nonassessable.

          (b) Except as set forth on Schedule 3.02 (b) hereto, there are no
     statutory or contractual stockholders' preemptive rights or rights of first
     refusal with respect to the issuance of the Securities hereunder or the
     issuance of the Common Stock upon conversion of the Securities. Except as
     set forth on Schedule 3.02 (b) hereto, the Issuer has not violated any
     applicable federal or state securities laws in connection with the offer,
     sale or issuance of any of its capital stock. There are no agreements
     between the Issuer and any of the Issuer's stockholders with respect to the
     voting or transfer of the Issuer's capital stock.

     Section 3.03 Subsidiaries; Investments. Schedule 3.03 correctly sets forth
the name of each Subsidiary of the Issuer, the jurisdiction of its incorporation
and the Persons owning the outstanding capital stock of such Subsidiary. Each
Subsidiary is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, possesses all requisite corporate
or other power and authority necessary to own its properties and to carry on its
businesses as now being conducted and as presently proposed to be conducted and
is qualified to do business in every jurisdiction in which its ownership of
property or the conduct of business requires it to qualify, except where the
failure to be so qualified would not have a Material Adverse Effect. Except as
set forth on Schedule 3.03, all of the outstanding shares of capital stock or
other equity interests of each Subsidiary are validly issued, fully paid and
nonassessable or not subject to a capital call or capital contribution
requirement, as applicable, and all such shares are owned by the Issuer or
another Subsidiary free and clear of any Lien and not subject to any option or
right to purchase any such shares. Except as set forth on the Schedule 3.03,
neither the Issuer nor any Subsidiary owns or holds the right to acquire any
shares of stock or any other security or interest in any other Person.

     Section 3.04 Authorization; No Breach. The execution, delivery and
performance of the Transaction Agreements and all other agreements contemplated
hereby or thereby to which the Issuer or any of its Subsidiaries is a party, the
filing of the Certificate of Designation have been duly and validly authorized
by the Issuer. The Transaction Agreements and all other agreements contemplated
hereby to which the Issuer or


                                       6
<PAGE>

any of its Subsidiaries is a party each constitutes a valid and binding
obligation of the Issuer or such Subsidiary, as applicable, enforceable in
accordance with its terms. The issuance of the Common Stock upon conversion of
the Series D Shares will not require any further corporate action (except for
action related to any anti-dilution adjustments) on the part of the Issuer
except as required pursuant to Section 5.07 and, except as set forth on Schedule
3.02 (b), will not be subject to any preemptive right, right of first refusal or
other similar right. The execution and delivery by the Issuer of this Agreement
and all other agreements contemplated hereby to which the Issuer is a party, the
offering, sale and issuance of the Securities hereunder, the issuance of Common
Stock upon conversion of the Series D Shares, the filing of the Certificate of
Designation, and the fulfillment of and compliance with the respective terms
hereof and thereof by the Issuer, do not and shall not (i) conflict with or
result in a breach of the terms, conditions or provisions of, (ii) constitute a
default under, (iii) result in the creation of any Lien upon the Issuer's or any
Subsidiary's capital stock or assets pursuant to, (iv) give any third party the
right to modify, terminate or accelerate any obligation under, (v) result in a
violation of, or (vi) require any authorization, consent, approval, exemption or
other action by or notice or declaration to, or filing with, any court or
administrative or governmental body or agency pursuant to, the articles of
incorporation or bylaws of the Issuer or any Subsidiary, or any law, statute,
rule or regulation, order, judgment or decree to which the Issuer or any
Subsidiary is subject, or any material agreement or instrument to which the
Issuer or any Subsidiary is subject, except for such matters that would not have
a Material Adverse Effect.

     Section 3.05 Securities Law Compliance. Assuming the representations and
warranties of the Purchasers set forth in Article 4 hereof are true and correct
in all material respects, the offer and sale of the Series D Shares and the
shares of Common Stock issuable upon conversion of the Series C Shares (the
"Issuable Securities") pursuant to this Agreement will be exempt from the
registration requirements of the Securities Act. Neither the Issuer nor any
Person acting on its behalf has, in connection with the offering of the Issuable
Securities, engaged in (i) any form of general solicitation or general
advertising (as those terms are used within the meaning of Rule 502(c) under the
Securities Act), (ii) any action involving a public offering within the meaning
of Section 4(2) of the Securities Act, or (iii) any action that would require
the registration under the Securities Act of the offering and sale of the
Issuable Securities pursuant to this Agreement. The Issuer has not made and will
not prior to each Closing make, directly or indirectly, any offer or sale of the
Issuable Securities or of securities of the same or similar class as the
Issuable Securities if, as a result, the offer and sale contemplated hereby
could fail to be entitled to exemption from the registration requirements of the
Securities Act. As used herein, the terms "offer" and "sale" have the meanings
specified in Section 2(3) of the Securities Act.

     Section 3.06 Commission Documents. Upon request, the Issuer will make
available to the Purchasers true and complete copies of all SEC Documents filed
with the Commission prior to the date hereof and will furnish the Purchasers a
true and correct copy of each amendment thereto and any SEC Documents filed by
the Issuer with the Commission on or before each Closing Date. As of their
respective filing dates, the SEC Documents complied (or will comply) in all
material respects with the requirements of the Securities Act, Exchange Act and
the rules and regulations of the Commission thereunder applicable to such SEC
Documents, and as of their respective dates none of the SEC Documents contained
(or will contain) any untrue statement of a material fact or omitted (or will
omit) to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.

     Section 3.07 Financial Statements. Each of the financial statements
(including, in each case, any notes and schedules thereto) contained in the
Issuer SEC Reports complied as to form in all material respects with the
applicable accounting requirements and rules and regulations of the Commission
and was prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
indicated (except as may be indicated in the notes thereto), and each fairly
presented the consolidated financial position, results of operations and cash
flows of the Issuer and its consolidated subsidiaries as at the respective dates
thereof and for the respective periods indicated therein in accordance with GAAP
(subject, in the case of unaudited statements, to normal and recurring year-end


                                       7
<PAGE>

adjustments and the absence of footnotes none of which would, individually or in
the aggregate, reflect or be reasonably expected to reflect a Material Adverse
Effect).

     Section 3.08 Absence of Undisclosed Liabilities. Except as set forth on
Schedule 3.08 or as disclosed in the Issuer SEC Reports, the Issuer and its
Subsidiaries do not have any material obligation or liability of a nature
required to be reflected on a balance sheet prepared in accordance with GAAP
arising out of transactions entered into at or prior to each Closing, or any
action or inaction at or prior to each Closing, or any state of facts existing
or any occurrence at or prior to each Closing other than: (i) liabilities set
forth on the Latest Balance Sheet (including any liabilities expressly disclosed
in any notes thereto), (ii) liabilities and obligations which have arisen after
the date of the Latest Balance Sheet in the ordinary course of business (none of
which is a liability resulting from breach of contract, breach of warranty,
tort, infringement, claim or lawsuit) and (iii) other liabilities and
obligations expressly disclosed in the other Schedules to this Agreement.

     Section 3.09 No Material Adverse Change. Since September 30, 2000, except
as disclosed in the Issuer SEC Reports, there has been no change in the
financial condition, operating results, assets, operations, employee relations
or customer or supplier relations of the Issuer and its Subsidiaries taken as a
whole that could reasonably be expected to have a Material Adverse Effect.

     Section 3.10 Absence of Certain Developments. Except as expressly
contemplated by the Transaction Agreements or as set forth on Schedule 3.10, and
except as disclosed in the Issuer SEC Reports filed prior to the date of this
Agreement, since the date of the Latest Balance Sheet, neither the Issuer nor
any Subsidiary has:

          (a) issued any notes, bonds or other debt securities or any capital
     stock or other equity securities or any securities convertible,
     exchangeable or exercisable into any capital stock or other equity
     securities;

          (b) borrowed any amount in excess of $250,000 or incurred or become
     subject to any material liabilities, except current liabilities incurred in
     the ordinary course of business and liabilities under contracts entered
     into in the ordinary course of business;

          (c) discharged or satisfied any material Lien or paid any material
     obligation or liability, other than current liabilities paid in the
     ordinary course of business;

          (d) declared or made any payment or distribution of cash or other
     property to its stockholders with respect to its capital stock or other
     equity securities or purchased or redeemed any shares of its capital stock
     or other equity securities (including, without limitation, any warrants,
     options or other rights to acquire its capital stock or other equity
     securities;

          (e) mortgaged or pledged any of its properties or assets or subjected
     them to any material Lien, except Liens for current property taxes not yet
     due and payable;

          (f) sold, assigned or transferred any of its tangible assets in excess
     of $50,000 individually or $250,000 in the aggregate or any interest in any
     Subsidiary, except in the ordinary course of business, or canceled any
     material debts or claims;

          (g) sold, assigned, transferred or abandoned any material patents or
     patent applications, trademarks, service marks, trade names, corporate
     names, copyrights or copyright registrations, trade secrets or other
     Intellectual Property Rights, or disclosed any material proprietary
     confidential information to any Person;

          (h) suffered any material extraordinary losses or waived any rights of
     material value, whether or not in the ordinary course of business or
     consistent with past practice;


                                       8
<PAGE>

          (i) made any Investment in or taken steps to incorporate any
     Subsidiary; or

          (j) entered into any other material transaction, other than in the
     ordinary course of business.

     Section 3.11 Assets. Except as disclosed in the Issuer SEC Reports filed
prior to the date of this Agreement or as set forth on Schedule 3.11, the Issuer
and each Subsidiary have good and marketable title to, a valid leasehold
interest in, or has the right or use, the material assets (other than Real
Property, which is addressed in Section 3.10) used by them, or shown on the
Latest Balance Sheet or acquired thereafter, free and clear of all Liens, except
for (i) assets disposed of in the ordinary course of business since the date of
the Latest Balance Sheet, (ii) Liens disclosed on the Latest Balance Sheet,
(iii) Liens for Taxes not yet due and payable, and (iv) covenants, conditions
and restrictions of record and minor title defects none of which individually or
collectively could reasonably be expected to interfere with Issuer's business as
presently conducted or planned to be conducted ("Permitted Liens"). The Issuer
and each Subsidiary owns, or has a valid leasehold interest in, or has the right
to use, all material tangible assets necessary for the conduct of their
respective businesses as presently conducted and as presently proposed to be
conducted.

     Section 3.12 Real Property.

          (a) Schedule 3.12(a) sets forth the address and description of each
     parcel of real property owned by the Issuer or any of its Subsidiaries (the
     "Owned Property"). The Issuer or its applicable Subsidiary has good and
     marketable fee simple title in and to each parcel of the Owned Property
     with a fair market value in excess of $250,000, subject to no liens,
     encroachments, encumbrances, claims, leases, rights of possession or other
     defects in title (collectively, "Encumbrance" ), except (i) as disclosed on
     the Latest Balance Sheet, (ii) Liens for Taxes not yet due and payable or
     as disclosed in the Issuer SEC Reports, (iii) covenants, conditions and
     restrictions of record and minor title defects none of which individually
     or collectively could reasonably be expected to interfere with Issuer's
     business as presently conducted or as planned to be conducted and (iv) for
     Permitted Liens or as described on Schedule 3.12(a).

          (b) Schedule 3.12(b) sets forth a list of all leases, subleases and
     other occupancy agreements providing for annual payments in excess of
     $50,000, including all amendments, extensions and other modifications
     thereto (the "Leases") for real property (the "Leased Property"; and
     collectively with the Owned Property, the "Real Property") to which the
     Issuer or any of its Subsidiaries is a party. To the best of their
     respective knowledge, the Issuer or its applicable Subsidiary has a good
     and valid leasehold interest in and to all of the Leased Property, subject
     to no Encumbrances except for Permitted Liens or as described on such
     Schedule. Each Lease is in full force and effect and is enforceable in
     accordance with its terms in all material respects. To the knowledge of the
     Issuer, there exists no default or condition which with the giving of
     notice, the passage of time or both could become a default under any Lease.
     Except as described on the Schedule 3.12(b), no consent, waiver, approval
     or authorization is required from the landlord under any Lease as a result
     of the execution of this Agreement or the consummation of the transactions
     contemplated hereby.

          (c) The Real Property constitutes all of the real property owned,
     leased, occupied or otherwise utilized in connection with the business of
     the Issuer and its Subsidiaries which is material to the conduct of the
     business of the Issuer and its Subsidiaries. To the knowledge of the
     Issuer, other than the Issuer, its Subsidiaries and the landlords under the
     Leases, there are no parties in possession or parties having any current or
     future right to occupy any of the Real Property which are material to the
     conduct of the business of the Issuer and its Subsidiaries. The Real
     Property and all plants, buildings and improvements located thereon conform
     in all material respects to all applicable building, zoning and other laws,
     ordinances, rules and regulations. All permits, licenses and other
     approvals necessary to the current occupancy and use of the Real Property
     which are material to the


                                       9
<PAGE>

     conduct of the business of the Issuer and its Subsidiaries have been
     obtained, are in full force and effect and have not been violated in any
     material respect. To the knowledge of the Issuer or any of its
     Subsidiaries, there exists no violation of any covenant, condition,
     restriction, easement, agreement or order affecting any portion of the Real
     Property which is material to the conduct of the business of the Issuer and
     its Subsidiaries. There is no pending or, to the knowledge of the Issuer,
     any threatened condemnation proceeding affecting any portion of the Real
     Property which is material to the conduct of the business of the Issuer and
     its Subsidiaries. There are no outstanding options, rights of first offer
     or rights of first refusal to purchase the Owned Property or any portion
     thereof or interest therein.

     Section 3.13 Tax Matters.

          (a) Except as set forth on Schedule 3.13: the Issuer, each Subsidiary
     and each Affiliated Group have filed all Tax Returns which they are
     required to have filed under Applicable Law, except where the failure to do
     so would not have a Material Adverse Effect; all such Tax Returns are
     complete and correct in all material respects and have been prepared in
     compliance with Applicable Law; the Issuer, each Subsidiary and each
     Affiliated Group in all material respects have paid all Taxes due and owing
     by them (whether or not such Taxes are required to be shown on a Tax
     Return) in all material respects and have withheld and paid over to the
     appropriate taxing authority all Taxes which they are required to withhold
     from amounts paid or owing to any employee, stockholder, creditor or other
     third party; neither the Issuer, any Subsidiary nor any Affiliated Group
     have outstanding any waiver of any statute of limitations with respect to
     any material Taxes or agreement to extend the time with respect to any
     material Tax assessment or deficiency; to the extent required by GAAP, the
     accrual for Taxes on the Latest Balance Sheet would be adequate to pay all
     Tax liabilities of the Issuer and its Subsidiaries if their current tax
     year were treated as ending on the date of the Latest Balance Sheet
     (excluding any amount recorded which is attributable solely to timing
     differences between book and Tax income); since the date of the Latest
     Balance Sheet, neither the Issuer nor any of its Subsidiaries have incurred
     any material liability for Taxes other than in the ordinary course of
     business; the federal income Tax Returns of the Issuer and its Subsidiaries
     have been audited and closed for all tax years through 1998; to the
     knowledge of the Issuer or its Subsidiaries, no foreign, federal, state or
     local tax audits or administrative or judicial proceedings are pending or
     being conducted with respect to the Issuer, any Subsidiary or any
     Affiliated Group; except with respect to such audits or proceedings, to the
     knowledge of the Issuer or its Subsidiaries, no information related to Tax
     matters has been requested by any foreign, federal, state or local taxing
     authority and no written notice indicating an intent to open an audit or
     other review has been received by the Issuer from any foreign, federal,
     state or local taxing authority; and there are no material unresolved
     questions or claims raised by any such taxing authority concerning the
     Issuer's, any Subsidiary's or any Affiliated Group Tax liability.

          (b) Except as set forth on Schedule 3.13, neither the Issuer nor any
     of its Subsidiaries has made an election under (S) 341(f) of the Internal
     Revenue Code of 1986, as amended. Neither the Issuer nor any Subsidiary is
     liable for the Taxes of another Person that is not a Subsidiary in a
     material amount under (a) Treas. Reg. (S) 1.1502-6 (or comparable
     provisions of state, local or foreign law), (b) as a transferee or
     successor, (c) by contract or indemnity or (d) otherwise by operation of
     Applicable Law. Neither the Issuer nor any Subsidiary is a party to any tax
     sharing agreement except as a member of an Affiliated Group. Neither the
     Issuer nor any Subsidiary has made any payments, is obligated to make
     payments or is a party to an agreement that could obligate it to make any
     payments that would not be deductible under IRC Section 280G.

          (c) "Tax" or "Taxes" means federal, state, county, local, foreign or
     other income, gross receipts, ad valorem, franchise, profits, sales or use,
     transfer, registration, excise, utility, environmental, communications,
     real or personal property, capital stock, license, payroll, wage or other
     withholding, employment, social security, severance, stamp, occupation,
     alternative or add-on minimum, estimated and other taxes of any kind
     whatsoever (including, without limitation,


                                       10
<PAGE>

     deficiencies, penalties, additions to tax, and interest attributable
     thereto) whether disputed or not. "Tax Return" means any return,
     information report or filing with respect to Taxes, including any schedules
     attached thereto and including any amendment thereof. "Affiliated Group"
     means any affiliated group as defined in IRC (S) 1504 that has filed a
     consolidated return for federal income tax purposes (or any similar group
     under state, local or foreign law) for a period and that includes any of
     the Issuer or any of its Subsidiaries as a member.

     Section 3.14 Contracts and Commitments.

          (a) Except as expressly contemplated by this Agreement or as disclosed
     in the Issuer SEC Reports filed prior to the date of this Agreement or on
     Schedule 3.14 under either the heading Contracts or the heading Employee
     Benefits or Schedule 3.12, neither the Issuer nor any Subsidiary is a party
     to or bound by any written or oral:

               (i) pension, profit sharing, stock option, employee stock
          purchase or other plan or arrangement providing for deferred or other
          compensation to employees or any other employee benefit plan or
          arrangement, or any collective bargaining agreement or any other
          contract with any labor union, or severance agreements, programs,
          policies or arrangements;

               (ii) contract for the employment of any officer, individual
          employee or other Person on a full-time, part-time, consulting or
          other basis providing annual compensation in excess of $100,000 or
          contract relating to loans to officers, directors or Affiliates;

               (iii) contract under which the Issuer or Subsidiary has advanced
          or loaned any other Person amounts in the aggregate exceeding
          $250,000;

               (iv) agreement or indenture relating to borrowed money or other
          Indebtedness or the mortgaging, pledging or otherwise placing a Lien
          on any material asset or material group of assets of the Issuer and/or
          its Subsidiaries;

               (v) guarantee of any obligation in excess of $100,000 (other than
          by the Issuer of a wholly-owned Subsidiary's debts or a guarantee by a
          Subsidiary of the Issuer's debts or of another wholly-owned
          Subsidiary's debts) other than in connection with the Credit
          Agreement;

               (vi) lease or agreement under which the Issuer or any Subsidiary
          is lessee of or holds or operates any personal property owned by any
          other party, except for any lease of personal property under which the
          aggregate annual rental payments do not exceed $50,000;

               (vii) lease or agreement under which the Issuer or any Subsidiary
          is lessor of or permits any third party to hold or operate any
          property, real or personal, owned or controlled by the Issuer or any
          Subsidiary, respectively;

               (viii) contract or group of related contracts with the same party
          or group of affiliated parties the performance of which involves
          consideration in excess of $250,000;

               (ix) assignment, license, indemnification or agreement with
          respect to any material intangible property (including, without
          limitation, any Intellectual Property Rights);

               (x) express warranty agreement with respect to its services
          rendered or its products sold or leased;


                                       11
<PAGE>

               (xi) agreement under which it has granted any Person any
          registration rights (including, without limitation, demand and
          piggyback registration rights);

               (xii) sales, distribution or franchise agreement the performance
          of which involves consideration in excess of $250,000;

               (xiii) agreement, the performance of which involves consideration
          in excess of $250,000, with a term of more than six months which is
          not terminable by the Issuer or any Subsidiary upon less than 30 days
          notice without penalty;

               (xiv) contract or agreement prohibiting it from freely engaging
          in any business or competing anywhere in the world;

               (xv) any joint venture agreement or other agreement pursuant to
          which the Issuer or any Subsidiary has made, or any agreement
          governing the Issuer's or any Subsidiary's investment in any other
          person; or

               (xvi) any other agreement which is material to its operations and
          business prospects or involves a consideration in excess of $250,000
          annually.

          (b) All of the contracts, agreements and instruments set forth or
     required to be set forth on Schedule 3.14 are valid, binding and
     enforceable in accordance with their respective terms. Except as set forth
     on Schedule 3.12, Schedule 3.14, Schedule 3.16, or Schedule 3.08, the
     Issuer and each Subsidiary has performed all material obligations required
     to be performed by it under the contracts, agreements and instruments
     listed on Schedule 3.14 or required to be set forth and are not in default
     under or in breach of nor in receipt of any claim of default or breach
     under any material contract, agreement or instrument to which the Issuer or
     any Subsidiary is subject and no event has occurred which with the passage
     of time or the giving of notice or both would result in a default, breach
     or event of noncompliance by the Issuer or any Subsidiary under any
     material contract, agreement or instrument to which the Issuer or any
     Subsidiary is subject; the Issuer has no present intention of not fully
     performing all such obligations; the Issuer has no knowledge of any breach
     or anticipated breach by the other parties to any material contract,
     agreement, instrument or commitment to which it is a party; and neither the
     Issuer nor any Subsidiary is a party to any contract or commitment or group
     of contracts or commitments the performance of which could have a Material
     Adverse Effect.

          (c) Upon request, the Issuer will make available to the Purchasers a
     true and correct copy of each of the written instruments, plans, contracts
     and agreements and an accurate description of each of the oral
     arrangements, contracts and agreements which are listed on, referred to or
     required to be listed on or referred to on Schedule 3.14, together with all
     amendments, waivers or other changes thereto.

     Section 3.15 Intellectual Property Rights.

          (a) Schedule 3.15 contains a complete and accurate list of all (a)
     patented or registered Intellectual Property Rights owned or used by the
     Issuer or any Subsidiary and material to the business of the Issuer and its
     Subsidiaries, (b) pending patent applications and applications for
     registration of other Intellectual Property Rights filed by the Issuer or
     any Subsidiary material to the business of the Issuer and its Subsidiaries,
     (c) material unregistered trade names and corporate names owned or used by
     the Issuer or any Subsidiary and (d) material unregistered trademarks,
     service marks, copyrights, mask works and computer software (other than
     commercially available computer software) owned or used by the Issuer or
     any Subsidiary and material to the business of the Issuer and its
     Subsidiaries. Schedule 3.15 also contains a complete and accurate list of
     all material licenses and other material rights granted by the Issuer or
     any Subsidiary to any third party with respect to any


                                       12
<PAGE>

     Intellectual Property Rights and all material licenses and other material
     rights granted by any third party to the Issuer or any Subsidiary with
     respect to any Intellectual Property Rights, in each case identifying the
     subject Intellectual Property Rights. The Issuer or one of its Subsidiaries
     is the beneficial and record owner of all right, title and interest to, or
     has the right to use pursuant to a valid and enforceable license, all
     Intellectual Property Rights necessary for the operation of the businesses
     of the Issuer and its Subsidiaries as presently conducted and as presently
     proposed to be conducted, free and clear of all Liens, except where the
     failure to have such right would not have a Material Adverse Effect. The
     loss or expiration of any Intellectual Property Right or related group of
     Intellectual Property Rights owned or used by the Issuer or any Subsidiary
     would not reasonably be expected to have a Material Adverse Effect and no
     such loss or expiration is, to the best of the Issuer's knowledge,
     threatened, pending or reasonably foreseeable. The Issuer and its
     Subsidiaries have taken all necessary actions to maintain and protect the
     Intellectual Property Rights which they own, except where the failure to
     have taken such actions would not have a Material Adverse Effect. To the
     best of the Issuer's knowledge, the owners of any Intellectual Property
     Rights licensed to the Issuer or any Subsidiary have taken all necessary
     actions to maintain and protect the Intellectual Property Rights which are
     subject to such licenses.

          (b) Except as set forth on Schedule 3.15 or Schedule 3.16, (i) to the
     best of the Issuer's knowledge, there have been no claims made against the
     Issuer or any Subsidiary within the past five (5) years asserting the
     invalidity, misuse or unenforceability of any of the Issuer's or its
     subsidiaries' Intellectual Property Rights or alleging infringement,
     misappropriation or other conflict of any third Person's Intellectual
     Property Rights by the Issuer or any of its Subsidiaries (including,
     without limitation, any demand or request that the Issuer or any Subsidiary
     license any rights from a third party), and, to the best of the Issuer's
     knowledge, there are no grounds for the same, (ii) neither the Issuer nor
     any Subsidiary has received any notices of, and is not aware of any facts
     which indicate a likelihood of, any infringement or misappropriation by any
     third party with respect to the Issuer's or its Subsidiaries' Intellectual
     Property Rights (including, without limitation, any demand or request that
     the Issuer or any Subsidiary license any rights from a third party) and
     (iii) to the best of the Issuer's knowledge, the conduct of the Issuer's
     and each Subsidiary's business has not infringed, misappropriated or
     conflicted with and does not infringe, misappropriate or conflict with any
     Intellectual Property Rights of other Persons, nor would any future conduct
     as presently contemplated infringe, misappropriate or conflict with any
     Intellectual Property Rights of other Persons. All Intellectual Property
     Rights owned or used by the Issuer or any Subsidiary immediately prior to
     each Closing will be owned or available for use by the Issuer or any such
     Subsidiary on identical terms and conditions immediately subsequent to such
     Closing.

     Section 3.16 Litigation, etc. Except as disclosed in the Issuer SEC Reports
filed prior to the date of this Agreement or on Schedule 3.16, there are no
actions, suits, proceedings, orders, investigations or claims pending or, to the
best of the Issuer's knowledge, threatened against or, to the Issuer's
knowledge, affecting the Issuer or any Subsidiary that individually or in the
aggregate have a Material Adverse Effect (or to the best of the Issuer's
knowledge, pending or threatened against or affecting any of the officers,
directors or employees of the Issuer and its Subsidiaries with respect to their
respective businesses or proposed business activities), or pending or threatened
by the Issuer or any Subsidiary against any third party, at law or in equity, or
before or by any governmental department, commission, board, bureau, agency or
instrumentality (including, without limitation, any actions, suit, proceedings
or investigations with respect to the transactions contemplated by this
Agreement); nor has there been any such actions, suits, proceedings, orders,
investigations or claims pending against or affecting the Issuer or any
Subsidiary during the past three years that individually or in the aggregate
have a Material Adverse Effect; and, to the best of the Issuer's knowledge,
there is no reasonable basis for any of the foregoing. Neither the Issuer nor
any Subsidiary is subject to any judgment, order or decree of any court or
Governmental Authority which could have a Material Adverse Effect.

     Section 3.17 Brokerage. Except as set forth on Schedule 3.17, for which
Issuer shall be solely responsible, there are no claims for brokerage
commissions, finders' fees or similar compensation in


                                       13
<PAGE>

connection with the transactions contemplated by this Agreement based on any
arrangement or agreement binding upon the Issuer or any Subsidiary. The Issuer
shall pay, and hold each Purchaser harmless against, any liability, loss or
expense (including, without limitation, reasonable attorneys' fees and
out-of-pocket expenses) arising in connection with any such claim.

     Section 3.18 Governmental Consent, etc. No permit, license, consent,
approval or authorization of, or declaration to or filing with, any governmental
authority or any other Person is required in connection with the execution,
delivery and performance by the Issuer of this Agreement or the other agreements
contemplated hereby, or the consummation by the Issuer of any other transactions
contemplated hereby or thereby, except as set forth on Schedule 3.18.

     Section 3.19 Insurance. Neither the Issuer nor any Subsidiary is in default
with respect to its obligations under any insurance policy maintained by it, and
since January 1, 1996 neither the Issuer nor any Subsidiary has been denied
insurance coverage. The insurance coverage of the Issuer and its Subsidiaries is
consistent with the best insurance practices for corporations of similar size
engaged in similar lines of business, is adequate and sufficient to cover all
material liabilities encountered in the ordinary course of business of the
Issuer and all material liabilities reasonably foreseen or projected by the
Issuer, and includes, without limitation, insurance in respect of pollution and
environmental liability, and personal injury liability. All of the insurers
through which the Issuer has sought insurance coverage in the past 10 years have
been and remain solvent. Except as set forth on Schedule 3.19, and excluding
deductibles under the Issuer's current insurance policies, neither the Issuer
nor its Subsidiaries have any self-insurance or co-insurance programs.

     Section 3.20 Employees. The Issuer is not aware that any executive or key
employee of the Issuer or any Subsidiary or any group of employees of the Issuer
or any Subsidiary has any plans to terminate employment with the Issuer or any
Subsidiary. The Issuer and each Subsidiary have complied in all material
respects with all laws relating to the employment of labor (including, without
limitation, provisions thereof relating to wages, hours, equal opportunity,
collective bargaining and the payment of social security and other taxes), and
the Issuer is not aware that it or any Subsidiary has any material labor
relations problems or concerns (including, without limitation, any union
organization activities, threatened or actual strikes or work stoppages or
material grievances). Except as disclosed on Schedule 3.14, neither the Issuer,
its Subsidiaries nor, to the best of the Issuer's knowledge, any of their
employees is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreements relating to, affecting or in
conflict with the present or proposed business activities of the Issuer and its
Subsidiaries, except for agreements between the Issuer and its present and
former employees.

     Section 3.21 ERISA.

          (a) Schedule 3.21 sets forth an accurate and complete list of each
     "employee benefit plan" (as such term is defined in Section 3(3) of the
     Employee Retirement Income Security Act of 1974, as amended ("ERISA")) that
     is material to the Issuer and each other employee benefit plan, program or
     arrangement that is material to the Issuer maintained, sponsored, or
     contributed to by the Issuer at any time in the last three years, or with
     respect to which the Issuer has any material actual or potential liability.
     Each such item listed on such attached schedule is referred to herein as a
     "Benefit Plan" and collectively as the "Benefit Plans".

          (b) All material contributions to and payments from any Benefit Plan
     that may have been required to be made in accordance with the terms of the
     Benefit Plan, any applicable collective bargaining agreement, and Section
     302 of ERISA or Section 412 of the Code have been timely made in all
     material respects. There has been no application for or waiver of the
     minimum funding standards imposed by Section 412 of the Code with respect
     to any Benefit Plan, and the Issuer is not aware of any facts or
     circumstances that would materially change the funded status of any such
     Benefit Plan at any time in the last three years. To the knowledge of the
     Issuer, no asset of the Issuer is or is reasonably likely to become subject
     to any lien under ERISA or the Code, and the Issuer has not


                                       14
<PAGE>

     incurred any material liability under Title IV of ERISA (other than for
     contributions not yet due) or to the Pension Benefit Guaranty Corporation
     (other than for payment of premiums not yet due).

          (c) Except as set forth on Schedule 3.21, each Benefit Plan that is
     intended to be qualified under Section 401(a) of the Code has received a
     determination from the IRS that such Benefit Plan is so qualified, and, to
     the best knowledge of the Issuer, nothing has occurred since the date of
     such determination that could adversely affect the qualified status of such
     Benefit Plan.

          (d) Each of the Benefit Plans and all related trusts, insurance
     contracts and funds have been maintained, funded and administered in
     compliance in all material respects with their terms and the terms of any
     applicable collective bargaining agreements and in compliance in all
     material respects with the applicable provisions of ERISA, the Code, and
     any other applicable laws. To the knowledge of the Issuer, there are no
     pending or threatened actions, suits, investigations or claims with respect
     to any Benefit Plan (other than routine claims for benefits) that could
     reasonably be expected to have a Material Adverse Effect. With respect to
     each Benefit Plan, all required material payments, premiums, contributions,
     distributions, or reimbursements for all periods ending prior to or as of
     each Closing Date have been made or properly accrued in all material
     respects.

          (e) To the knowledge of the Issuer, neither the Issuer nor any other
     "disqualified person" (within the meaning of Section 4975 of the Code) or
     any "party in interest" (within the meaning of Section 3(14) of ERISA) has
     engaged in any "prohibited transaction" (within the meaning of Section 4975
     of the Code or Section 406 of ERISA) with respect to any of the Benefit
     Plans which could subject any of the Benefit Plans, the Issuer, or any
     officer, director or employee of any of the foregoing to a penalty or tax
     under Section 502 of ERISA or Section 4975 of the Code that could
     reasonably be expected to have a Material Adverse Effect.

          (f) Except as set forth otherwise on Schedule 3.14, each Benefit Plan
     which is subject to the health care continuation requirements of Part 6 of
     Subtitle B of Title I of ERISA or Section 4980B of the Code ("COBRA") has
     been administered in compliance in all material respects with such
     requirements. No Benefit Plan provides medical or life or other welfare
     benefits to any current or future retired or terminated employee (or any
     dependent thereof) of the Issuer other than as required pursuant to COBRA
     or applicable State law.

          (g) To the knowledge of the Issuer, no Benefit Plan subject to Title
     IV of ERISA which is a "multiemployer plan" (as such term is defined in
     Section 3(37) of ERISA) (a "Multiemployer Plan") has been terminated; to
     the knowledge of the Issuer, no proceeding has been initiated to terminate
     any such Multiemployer Plan and there has been no "reportable event" within
     the meaning of Section 4043(c) of ERISA) with respect to any such
     Multiemployer Plan; to the knowledge of the Issuer, no Multiemployer Plan
     is in reorganization as described in Section 4241 of ERISA and, to the
     knowledge of the Issuer, no Multiemployer Plan is insolvent as described in
     Section 4245 of ERISA. To the knowledge of the Issuer, the Issuer has not
     incurred any liability on account of a "partial withdrawal" or a "complete
     withdrawal" (within the meaning of Sections 4205 and 4203, respectively, of
     ERISA) from any Multiemployer Plan, no such liability has been asserted,
     and, to the knowledge of the Issuer, there are no events or circumstances
     which could result in any such partial or complete withdrawal. The Issuer
     is not bound by any contract or agreement nor does it have any obligation
     or liability described in Section 4204 of ERISA.

          (h) With respect to each Benefit Plan, upon request, the Issuer will
     provide the Purchaser with true, complete and correct copies of (to the
     extent applicable): (i) all documents pursuant to which the Benefit Plan is
     maintained, funded and administered (including the plan and trust
     documents, any amendments thereto, the summary plan descriptions, and any
     insurance contracts or service provider agreements); (ii) the three most
     recent annual reports (Form 5500 series) filed with


                                       15
<PAGE>

     the IRS (with applicable attachments); (iii) the most recent actuarial
     valuation report; and (iv) the most recent determination letter received
     from the IRS.

          (i) The Issuer has no liability with respect to any "employee benefit
     plan" (as defined in Section 3(3) of ERISA) solely by reason of being
     treated as a single employer under Section 414 of the Code with any trade,
     business or entity other than the Issuer.

     Section 3.22 Compliance with Laws. Each of the Issuer and each Subsidiary
has operated its business and conducted its activities in compliance in all
material respects with all laws, regulations and governmental requirements,
which the failure to be in compliance with would reasonably be expected to have
a Material Adverse Effect and neither the Issuer nor any Subsidiary has violated
any law or any governmental regulation or requirement which violation has had or
would reasonably be expected to have a Material Adverse Effect, and neither the
Issuer nor any Subsidiary has received notice of any such violation.

     Section 3.23 Environmental and Safety Matters.

          (a) For purposes of this Agreement, the term "Environmental and Safety
     Requirements" shall mean all federal, state and local statutes,
     regulations, ordinances and other provisions having the force or effect of
     law, all judicial and administrative orders and determinations, all
     contractual obligations and all common law, in each case concerning public
     health and safety, worker health and safety and pollution or protection of
     the environment (including, without limitation, all those relating to the
     presence, use, production, generation, handling, transport, treatment,
     storage, disposal, distribution, labeling, testing, processing, discharge,
     Release, threatened Release, control or cleanup of any hazardous or
     otherwise regulated materials, substances or wastes, chemical substances or
     mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum
     products or byproducts, asbestos, polychlorinated biphenyls, noise or
     radiation); "Release" shall have the meaning set forth in CERCLA (as
     defined below); and "Environmental Lien" shall mean any Lien, whether
     recorded or unrecorded, in favor of any governmental entity, relating to
     any liability of the Issuer or any Subsidiary arising under any
     Environmental and Safety Requirements.

          (b) Except as set forth on Schedule 3.23:

               (i) The Issuer and its Subsidiaries have complied in all material
          respects with and are currently in compliance in all material respects
          with all Environmental and Safety Requirements, which the failure to
          be in compliance with would have a Material Adverse Effect, and since
          January 1, 1997, neither the Issuer nor its Subsidiaries have received
          any oral or written notice, report or information regarding any
          liabilities (whether accrued, absolute, unliquidated or otherwise) or
          any corrective, investigatory or remedial obligations arising under
          Environmental and Safety Requirements, which liabilities or
          obligations would have a Material Adverse Effect and which relate to
          the Issuer or its Subsidiaries or any of their properties or
          facilities.

               (ii) Without limiting the generality of the foregoing, the Issuer
          and its Subsidiaries have obtained and complied in all material
          respects with and are currently in compliance in all material respects
          with, all Environmental Permits. A list of all such permits, licenses
          and other authorizations which are material to the Issuer and its
          Subsidiaries is set forth on Schedule 3.23 ("Environmental Permits").

               (iii) None of the following exists at any property or facility
          owned, occupied or operated by the Issuer or any of its Subsidiaries:

                    (1) underground storage tanks or surface impoundments;


                                       16
<PAGE>

                    (2) asbestos-containing materials in any form or condition;
               or

                    (3) materials or equipment containing polychlorinated
               biphenyls; the existence of which could reasonably be expected to
               have a Material Adverse Effect.

               (iv) To the knowledge of the Issuer, neither the Issuer nor any
          of its Subsidiaries has treated, stored, disposed of, arranged for or
          permitted the disposal of, transported, handled or Released any
          hazardous substance or owned, occupied or operated any facility or
          property, so as to give rise to liabilities of the Issuer or its
          Subsidiaries for response costs, natural resource damages or attorneys
          fees pursuant to the Comprehensive Environmental Response,
          Compensation and Liability Act of 1980 ("CERCLA"), as amended, or any
          other Environmental and Safety Requirements.

               (v) Without limiting the generality of the foregoing, to the
          knowledge of the Issuer, no facts, events or conditions relating to
          the past or present properties, facilities or operations of the Issuer
          or its Subsidiaries shall prevent, hinder or limit continued
          compliance with Environmental and Safety Requirements, give rise to
          any corrective, investigatory or remedial obligations pursuant to
          Environmental and Safety Requirements or give rise to any other
          liabilities pursuant to Environmental and Safety Requirements
          (including, without limitation, those liabilities relating to onsite
          or offsite Releases or threatened Releases of hazardous materials,
          substances or wastes, personal injury, property damage or natural
          resources) damage that could reasonably be expected to have a Material
          Adverse Effect.

               (vi) Neither the Issuer nor any of its Subsidiaries has, either
          expressly or by operation of law, assumed or undertaken any material
          liability or corrective, investigatory or remedial obligation of any
          other Person relating to any Environmental and Safety Requirements
          that could reasonably be expected to have a Material Adverse Effect.

               (vii) No Environmental Lien has attached to any property owned,
          leased or operated by the Issuer or any of its Subsidiaries that could
          reasonably be expected to have a Material Adverse Effect.

     Section 3.24 Affiliated Transactions. Except as set forth on Schedule 3.24
or in the Issuer's SEC Reports, no officer, director, significant stockholder or
Affiliate of the Issuer or any Subsidiary, to the knowledge of the Issuer, or
any member of such individual's immediate family or any entity in which any such
Person or individual owns any beneficial interest (other than less than 5% of
the outstanding securities of a publicly traded company), is a party to any
agreement, contract, commitment or transaction with the Issuer or any Subsidiary
or has any material interest in any material property used by the Issuer or any
Subsidiary.

     Section 3.25 Disclosure. Neither this Agreement nor any of the exhibits,
schedules, attachments, written statements, documents, certificates or other
items prepared or supplied to any Purchaser by or on behalf of the Issuer with
respect to the transactions contemplated hereby contain any untrue statement of
a material fact or omit a material fact necessary to make each statement
contained herein or therein not misleading; provided that with respect to the
financial projections furnished to the Purchasers by the Issuer, the Issuer
represents and warrants only that such projections were based upon assumptions
reasonably believed by the Issuer to be reasonable and fair as of the date the
projections were prepared in the context of the Issuer's history and current and
reasonably foreseeable business conditions. There is no fact which the Issuer
has not disclosed to the Purchasers in writing and of which any of its officers,
directors or executive employees is aware (other than general economic
conditions) and which has had or would reasonably be expected to have a Material
Adverse Effect.


                                       17
<PAGE>

     Section 3.26 Customers and Suppliers.

          (a) Schedule 3.26 lists the ten (10) largest customers and suppliers
     of the Issuer (on a consolidated basis) for each of the two most recent
     fiscal years and sets forth opposite the name of each such customer or
     supplier the amount of revenues to such customer in the case of any such
     customer or the amount of expenditures to such supplier in the case of any
     such supplier. Schedule 3.26 also lists any additional current customers
     and suppliers which the Issuer anticipates shall be among the ten (10)
     largest customers or suppliers for the current fiscal year.

          (b) Since the date of the Latest Balance Sheet, no Supplier set forth
     on Schedule 3.26 has stopped or materially decreased the rate of or
     indicated that it shall stop, or materially decrease the rate of, supplying
     materials, products or services to the Issuer or any Subsidiary, and no
     customer listed on Schedule 3.26 has stopped or materially decreased or, to
     the Issuer's knowledge, indicated that it shall stop, or materially
     decrease the rate of, buying materials, products or services from the
     Issuer or any Subsidiary.

     Section 3.27 Reports with the Securities and Exchange Commission. Since
January 1, 1997, the Issuer has filed with the Commission all forms, statements,
reports and documents (including all exhibits, amendments and supplements
thereto) required to be filed by it under the Securities Act and the Exchange
Act, all of which complied when filed in all material respects with all
applicable requirements of the appropriate act and the rules and regulations
thereunder. Upon request, the Issuer will furnish the Purchasers with complete
and accurate copies of its annual report on Form 10-K for its three most recent
fiscal years, all other reports or documents required to be filed by the Issuer
pursuant to Section 13(a) or 15(d) of the Exchange Act since the filing of the
most recent annual report on Form 10-K and its most recent annual report to its
stockholders (collectively, the "Issuer SEC Reports"). Such reports and filings
did not as of the date of filing contain any material false statements or any
misstatement of any material fact and do not omit to state any fact necessary to
make the statements set forth therein not misleading. The Issuer has made all
filings with the Commission which it is required to make, and the Issuer has not
received any request from the Commission to file any amendment or supplement to
any of the reports described in this paragraph.

     Section 3.28 Regulatory Matters.

          (a) Except as disclosed on Schedule 3.16, the Issuer and its
     Subsidiaries have all requisite power and authority and hold or have
     applied for all Licenses required under any Applicable Law to own and
     operate their properties and to carry on the business of the Issuer and its
     Subsidiaries as such business is conducted on the date hereof and as
     proposed to be conducted. Each material License issued to the Issuer or its
     Subsidiaries is validly issued and is in full force and effect. The Issuer
     does not know of any reason why any Governmental Authority might revoke any
     License. The Issuer does not know of any party who has a current filing
     pending in specific opposition to or expressed an interest in opposing the
     grant of the material Licenses held or applied for by the Issuer or its
     Subsidiaries, or of any reason why any Governmental Authority might not
     grant any of the material Licenses or that have been applied for.

          (b) Except as disclosed on Schedule 3.16, none of the Issuer or its
     Subsidiaries is a party to nor, to the best knowledge of the Issuer and
     each Subsidiary, is there threatened any investigation, notice of apparent
     liability, violation, show cause order, forfeiture or other notice, order
     or complaint issued by or before any Governmental Authority, or of any
     other proceeding (other than proceedings of general applicability) that
     could in any manner threaten or adversely affect the validity, future grant
     or continued effectiveness of the material Licenses of the Issuer and its
     Subsidiaries. None of the Issuer and its Subsidiaries has any reason to
     believe that each of the material Licenses will not be renewed in the
     ordinary course.


                                       18
<PAGE>

     Section 3.29 Shareholder Vote Required. To the extent the number of shares
of Common Stock of the Company into which the Series D Shares are convertible
would exceed twenty percent (20%) of the Issuer's outstanding common stock,
approval of the holders of the Issuer's capital stock is required by the rules
of the NASDAQ Stock Market. If required to comply with Nasdaq shareholder
approval requirements, the Company will take all steps as soon as practicable
following the date of this Agreement, the Issuer will take all steps to call and
hold a special meeting of its stockholders for the purpose of approving the
issuance of common stock that would exceed such 20% requirement.

     Section 3.30 Knowledge. As used in this Section 3, the terms "knowledge" or
"aware" shall mean and include the actual knowledge or awareness, following due
inquiry, of the executive officers of the Issuer.


                                   ARTICLE IV
          AGREEMENTS, REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

     Each Purchaser hereby severally represents and warrants to the Issuer as of
the date hereof and as of each Closing Date that:

          (a) Such Purchaser understands that the offering and sale of the
     Securities is intended to be exempt from registration under the Securities
     Act pursuant to Section 4(2) of the Securities Act and any applicable state
     securities or blue sky laws.

          (b) The Securities to be acquired by such Purchaser pursuant to this
     Agreement are being acquired for its own account and without a view to the
     resale or distribution of such Securities or any interest therein other
     than in a transaction exempt from registration under the Securities Act.

          (c) Such Purchaser is an "Accredited Investor" as such term is defined
     in Regulation D under the Securities Act.

          (d) Such Purchaser has sufficient knowledge and experience in
     financial and business matters so as to be capable of evaluating the merits
     and risks of its investment in the Securities and such Purchaser is capable
     of bearing the economic risks of such investment, including a complete loss
     of its investment in the Securities. Such Purchaser understands that
     Purchaser's investment in the Securities involves a high degree of risk.

          (e) Such Purchaser has been furnished with and carefully read a copy
     of the Issuer SEC Reports and this Agreement (including the Schedules
     hereto) and has been given the opportunity to ask questions of, and receive
     answers from, the Issuer concerning the terms and conditions of the
     Securities and other related matters. To such Purchaser's knowledge, the
     Issuer has made available to such Purchaser or its agents all documents and
     information relating to an investment in the Securities requested by or on
     behalf of such Purchaser.

          (f) Such Purchaser understands that the Securities shall bear a
     restrictive legend in a form agreed between the parties.

          (g) Each Purchaser who holds Series B Shares or Series C Shares,
     consents to the issuance of the Series D Shares with rights pari passu to
     the Series B Shares and the Series C Shares.


                                       19
<PAGE>

                                   ARTICLE V
                            COVENANTS OF THE ISSUER

     The Issuer agrees that:

     Section 5.01 Access to Information.

          (a) From the date hereof until the First Closing Date, the Issuer will
     (i) furnish to each Purchaser and its authorized representatives such
     financial and operating data and other information relating to the Issuer
     and its Subsidiaries as such Persons may reasonably request and (ii)
     instruct its officers, employees, counsel, independent accountants and
     financial advisors to cooperate with such Purchaser and its authorized
     representatives in its investigation of the Issuer and its Subsidiaries.
     Any investigation pursuant to this Section shall be conducted in a manner
     that does not interfere unreasonably with the conduct of the business of
     the Issuer and its Subsidiaries.

          (b) After the First Closing Date, for so long as the Purchasers, in
     the aggregate, own 20% of the Series D Shares issued to the Purchasers at
     the Closings, the Purchasers shall be entitled to (i) receive, within 90
     days of the issuer's financial year end, audited annual financial
     statements, and receive within 45 and 30 days of the relevant respective
     periods, unaudited quarterly and monthly financial statements, (ii) receive
     all information made available to shareholders of the Issuer or members of
     the Board of Directors, in each case, at the same time as such materials
     are distributed to the shareholders or directors, as the case may be, (iii)
     designate up to two persons who shall be entitled to observation rights at
     all meetings of the Issuer's Board of Directors, (iii) meet on a quarterly
     basis with members of senior management, (v) receive copies of management
     reports, and (vi) have reasonable access to the Issuer's outside auditors.

          (c) Each Purchaser agrees that any nonpublic information furnished to
     such Purchaser pursuant to this Section 5.01 shall be deemed confidential
     information and shall not be used by it as the basis for any market
     transactions in the securities of the Issuer unless and until such
     information is made generally available to the public.

     Section 5.02 Certificate of Designation. Prior to the First Closing,
subject to the terms of this Agreement, the Issuer shall cause to be filed the
Certificate of Designation as required pursuant to the laws of the State of
Utah.

     Section 5.03 Restrictions Pending the Closings. After the date hereof and
prior to the Closing Dates, except as expressly provided for in this Agreement
or as consented to in writing by the Purchasers, the Issuer shall not:

          (i) amend its Articles of Incorporation or bylaws;

          (ii) split, combine or reclassify any shares of its capital stock
     without appropriately adjusting the conversion price and/or ratio and
     exercise price applicable to the Series D Shares prior to their issuance at
     the Closings;

          (iii) declare or pay any dividend or distribution (whether in cash,
     stock or property) in respect of its Common Stock;

          (iv) take any action, or knowingly omit to take any action, that could
     reasonably be expected to result in (A) any of the representations and
     warranties of the Issuer set forth in Article 3 becoming untrue or (B) any
     of the conditions to the obligations of the Purchasers set forth in Section
     8.01 or 8.02 not being satisfied; or


                                       20
<PAGE>

          (v) enter into any agreement or commitment to do any of the foregoing.

     Section 5.04 Reservation of Shares. For so long as any of the Securities
are outstanding, the Issuer shall keep reserved for issuance a sufficient number
of shares of Common Stock to satisfy its conversion obligations under the
Certificate of Designation and its issuance obligations under the Warrants.

     Section 5.05 Tax Consistency. The Issuer will not treat the Series D Shares
as "preferred stock" for Tax purposes, unless otherwise required pursuant to a
final determination or a change in Applicable Law.

     Section 5.06 Use of Proceeds. The Issuer shall use the proceeds received
upon the sale of the Series D Shares at the Closings solely for the purposes set
forth in Schedule 5.06 attached hereto.


                                   ARTICLE VI
                          COVENANTS OF THE PURCHASERS

     Section 6.01 Confidentiality. Each Purchaser will hold, and will use its
reasonable best efforts to cause its officers, directors, employees,
accountants, counsel, consultants, advisors, financing sources, financial
institutions, and agents (the "Representatives") to hold, in confidence, unless
required to disclose by judicial or administrative process or by other
requirements of law, regulation or national stock exchange, all confidential
documents and information concerning the Issuer or any of its Affiliates that
are furnished to such Purchaser, except to the extent that such information can
be shown to have been (i) previously known on a nonconfidential basis by such
Purchaser or such Representatives, (ii) in the public domain through no fault of
such Purchaser or its Representatives (with respect to information received in
their capacity as such) or (iii) later acquired by such Purchaser or such
Representatives from sources other than the Issuer or any of its Affiliates not
known by such Purchaser or such Representatives, as applicable, to be bound by
any confidentiality obligation; provided that such Purchaser may disclose such
information to any of its Representatives in connection with the transactions
contemplated by this Agreement and the Certificate of Designation so long as
such Persons are informed by such Purchaser of the confidential nature of such
information and are directed by such Purchaser to treat such information
confidentially. The obligation of each Purchaser to hold and to cause its
Representatives to hold any such information in confidence shall be satisfied if
such Purchaser exercises the same care with respect to such information as such
Purchaser would take to preserve the confidentiality of its own similar
information. If any Purchaser or any of its Representatives is requested to
disclose any confidential information by judicial or administrative process or
by other requirements of law or a national stock exchange, such Purchaser will
promptly notify the Issuer of such request so that the Issuer may seek an
appropriate protective order. Each Purchaser agrees that it will not, and will
use its reasonable best efforts to cause its Representatives not to, use any
confidential documents or information for any purpose other than monitoring and
evaluating its investment in the Issuer and in connection with the transactions
contemplated by this Agreement and the Certificate of Designation. If this
Agreement is terminated, each Purchaser will, and will use its reasonable best
efforts to cause its Representatives to, destroy or deliver to the Issuer, upon
request, all documents and other materials, and all copies thereof, obtained by
such Purchaser or on its behalf from the Issuer, or any of the Representatives,
in connection with this Agreement that are subject to such confidence.


                                  ARTICLE VII
                   COVENANTS OF THE ISSUER AND THE PURCHASERS

     Section 7.01 Certain Filings. The Issuer and each Purchaser will, and will
cause their Affiliates to, cooperate with one another (i) in determining whether
any action by or in respect of, or filing with, any Governmental Authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement and the
Certificate of Designation, the conversion by such Purchaser of such Purchaser's
Series D Shares or the exercise by such Purchaser of such Purchaser's Warrants,
and (ii) in taking such actions or making any such filings, furnishing
information required in connection therewith and seeking timely to


                                       21
<PAGE>

obtain any such actions, consents, approvals or waivers. The Issuer and each
Purchaser shall (A) give the other parties prompt notice of the commencement of
any action, suit, litigation, arbitration, preceding or investigation by or
before any governmental body with respect to the transactions contemplated by
this Agreement and the Certificate of Designation, (B) keep the other parties
informed on a current basis as to the status of any such action, suit,
litigation, arbitration, preceding or investigation, and (C) promptly inform the
other parties of any communication to or from the Department of Justice or any
other governmental body regarding the transactions contemplated by this
Agreement and the Certificate of Designation.

     Section 7.02 Public Announcements. In connection with the execution of this
Agreement, the Issuer shall issue a press release (a "Signing Release") and
shall file with the Commission a Report on Form 8-K with respect to the
transactions contemplated hereby (the "Signing 8-K" and together with the
Signing Release, the "Agreed Disclosure"). The Signing Release shall be in form
and substance as agreed by the parties hereto. The Signing 8-K shall be provided
to the Purchasers prior to filing and the Purchasers shall be given a reasonable
opportunity to comment thereon. The Issuer shall accept all reasonable changes
suggested by the Purchasers. If the Issuer does not accept any changes suggested
in good faith by the Purchasers, the provisions of this Section 7.02 shall
immediately terminate and be of no further force or effect as to the Purchasers.
If the Issuer accepts all such changes, the Agreed Disclosure shall serve as the
basis for any public disclosure by the parties of the transactions contemplated
hereby and neither the Issuer nor any Purchaser shall make any statement or
representation regarding the transactions contemplated hereby, publicly or in a
manner which could reasonably be expected to result in its public dissemination,
which is materially inconsistent with the Agreed Disclosure. Except as otherwise
permitted pursuant to this Section 7.03, the Issuer shall not use or refer to
the name of any Purchaser in any public statement or disclosure without the
consent of such Purchaser.


                                  ARTICLE VIII
                      CONDITIONS PRECEDENT TO THE CLOSINGS

     Section 8.01 Conditions to Each Party's Obligations. The obligation of each
party hereto to consummate the Closings is subject to the satisfaction, at or
prior to each Closing Date, of the following conditions:

          (a) All filings with, notifications to and consents from Governmental
     Authorities required for the consummation of such Closing shall have been
     made or obtained, as applicable; and

          (b) No provision of any applicable law or regulation and no judgment,
     injunction, order or decree shall prohibit the consummation of such
     Closing.

     Section 8.02 First Closing: Conditions to Each Purchaser's Obligations. The
obligation of each Purchaser to consummate the First Closing is further subject
to the satisfaction, at or prior to the First Closing Date, of the following
additional conditions:

          (a) The representations and warranties of the Issuer contained herein
     that are qualified as to materiality or Material Adverse Effect shall be
     true and correct in all respects on and as of the First Closing Date and
     the representations and warranties of the Issuer contained herein that are
     not so qualified shall be true and correct in all material respects on and
     as of the First Closing Date, in each case as if made on and as of such
     date; the Issuer shall have performed and complied in all material respects
     with all covenants and agreements required by this Agreement to be
     performed or complied with by it at or prior to the First Closing Date; and
     such Purchaser shall have received a certificate dated the First Closing
     Date signed by an authorized officer of the Issuer to the foregoing effect;

          (b) The Certificate of Designation shall have been filed with the
     Division of Corporations and Commercial Code of the State of Utah in
     accordance with the law of the State of Utah;


                                       22
<PAGE>

          (c) The Registration Rights Agreement shall have been executed and
     delivered by the parties thereto and be in full force and effect;

          (d) Each Purchaser shall have received opinions, dated the First
     Closing Date, of counsel to the Issuer, addressing such matters as shall be
     reasonably requested by the Purchasers;

          (e) No action, suit, investigation, litigation or proceeding
     challenging this Agreement or the transactions contemplated hereby or
     seeking to prohibit, alter, prevent or materially delay the First Closing
     or which could have an adverse affect on the ability of the Issuer to
     perform its obligations under this Agreement shall have been instituted by
     any Governmental Authority before any court, arbitrator or governmental
     body, agency or official binding on any party hereto and be pending;

          (f) Each Purchaser shall have received all documents reasonably
     requested by it relating to the existence of Issuer, the corporate
     authority for Issuer entering into, and the validity of, this Agreement,
     the Certificate of Designation, and the Series D Shares, all in form and
     substance reasonably satisfactory to it; and

          (g) The Issuer shall have received all consents and waivers by third
     parties that are required for the issuance of the Securities and the
     consummation of the transactions contemplated hereby on terms reasonably
     satisfactory to Purchaser (including (i) waivers of all shareholders'
     contractual or other preemptive and similar rights, and (ii) any consents
     required in order that the transactions contemplated hereby do not
     constitute a breach of, a default under, or a termination or modification
     of any material agreement to which the Issuer or any Subsidiary is a party
     or to which any portion of the property of the Issuer or any Subsidiary is
     subject).

     Section 8.03 Second Closing: Conditions to Each Purchaser's Obligations.
The obligation of each Purchaser to consummate the Second Closing is further
subject to the satisfaction, at or prior to the Second Closing Date, of the
following conditions:

          (a) The representations and warranties of the Issuer contained herein
     that are qualified as to materiality or Material Adverse Effect shall be
     true and correct in all respects on and as of the Second Closing Date and
     the representations and warranties of the Issuer contained herein that are
     not so qualified shall be true and correct in all material respects on and
     as of the Second Closing Date, in each case as if made on and as of such
     date; the Issuer shall have performed and complied in all material respects
     with all covenants and agreements required by this Agreement to be
     performed or complied with by it at or prior to the Second Closing Date;
     and such Purchaser shall have received a certificate dated the Second
     Closing Date signed by an authorized officer of the Issuer to the foregoing
     effect; and

          (b) No action, suit, investigation, litigation or proceeding
     challenging this Agreement or the transactions contemplated hereby or
     seeking to prohibit, alter, prevent or materially delay the Second Closing
     or which could have an adverse affect on the ability of the Issuer to
     perform its obligations under this Agreement shall have been instituted by
     any Governmental Authority before any court, arbitrator or governmental
     body, agency or official binding on any party hereto and be pending.

     Section 8.04 Conditions to the Issuer's Obligations. The obligation of the
Issuer to consummate each Closing is further subject to the satisfaction, at or
prior to each Closing Date, of the following additional conditions:

          (a) The representations and warranties of each Purchaser contained
     herein shall be true and correct in all respects on and as of each Closing
     Date. Each Purchaser shall have performed and complied in all material
     respects with all covenants and agreements required by this Agreement to be


                                       23
<PAGE>

     performed or complied with by such Purchaser at or prior to each Closing
     Date; and the Issuers shall have received a certificate dated as of each
     Closing Date signed by an authorized officer of such Purchaser to the
     foregoing effect; and

          (b) No proceeding challenging this Agreement or the transactions
     contemplated hereby or seeking to prohibit, alter, prevent or materially
     delay either Closing shall have been instituted by any Governmental
     Authority before any court, arbitrator or governmental body, agency or
     official binding on any party hereto and be pending;

          (c) The Issuer shall have received all consents and waivers by third
     parties that are required for the issuance of the Securities and the
     consummation of the transactions contemplated hereby on terms reasonably
     satisfactory to Purchaser (including (i) waivers of all shareholders'
     contractual or other preemptive and similar rights, and (ii) any consents
     required in order that the transactions contemplated hereby do not
     constitute a breach of, a default under, or a termination or modification
     of any material agreement to which the Issuer or any Subsidiary is a party
     or to which any portion of the property of the Issuer or any Subsidiary is
     subject).


                                   ARTICLE IX
                                 MISCELLANEOUS

     Section 9.01 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including facsimile or similar writing) and
shall be given to such party at its address or facsimile number set forth below,
or such other address or facsimile number as such party may hereinafter specify
for the purpose to the party giving such notice. Each such notice, request or
other communication shall be effective (i) if given by facsimile, when such
facsimile is transmitted to the facsimile number specified pursuant to this
Section 9.01 and the appropriate confirmation is received, (ii) if given by
mail, three days after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (iii) if given by any other
means, when delivered at the address specified below:

     The Issuer:

               United Shipping & Technology, Inc.
               9850 51st Avenue North
               Plymouth, MN  55442
               Attention:  Wesley C. Fredenburg, Esq.
               Fax:  (952) 941-4080

     with a copy to:

               Briggs and Morgan Professional Association
               2400 IDS Center
               Minneapolis, MN  55402
               Attention:  Avron L. Gordon
               Fax: (612) 334-8455


                                       24
<PAGE>

     The Purchasers:

               TH Lee.Putnam Internet Partners, L.P.
               TH Lee.Putnam Internet Parallel Partners, L.P.
               THLi Coinvestment Partners, LLC
               Blue Star I, LLC.
               200 Madison Avenue
               Suite 1900
               New York, NY  10016
               Attention:  Douglas H. Hsieh
               Fax:  (212) 951-8655

               RS Investment Management, Inc.
               388 Market Street
               San Francisco, CA 94111
               Attention:  Jennifer George
               Phone:  (415) 591-2735

     with a copy to:

               Kirkland & Ellis
               153 East 53rd Street
               New York, NY  10022
               Attention:  Eunu Chun
               Fax:  (212) 446-4900

     Section 9.02 No Waivers; Amendments.

          (a) No failure or delay on the part of any party in exercising any
     right, power or privilege hereunder shall operate as a waiver thereof, nor
     shall any single or partial exercise thereof preclude any other or further
     exercise thereof or the exercise of any other right, power or privilege.
     The rights and remedies herein provided shall be cumulative and not
     exclusive of any rights or remedies provided by law.

          (b) Any provision of this Agreement may be amended or waived if, but
     only if, such amendment or waiver is in writing and is signed by all the
     parties hereto.

     Section 9.03 Survival. All representations and warranties contained herein
or made in writing by any party in connection herewith shall survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby for a period of 2 years following each Closing,
regardless of any investigation made by any Purchaser or on its behalf;
provided, however, that the representations and warranties contained in Sections
3.01, 3.02, and 3.04 shall survive the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby indefinitely.

     Section 9.04 Indemnification. Effective upon the First Closing, the Issuer
hereby indemnifies each Purchaser and its Affiliates against and agrees to hold
such Purchaser and its Affiliates harmless from any and all actions, causes of
action or suits brought by third parties ("Third Party Claims") damages, losses,
liabilities and expenses (including, without limitation, reasonable expenses of
investigation and reasonable attorneys' fees and expenses in connection with any
action, suit or proceeding) ("Damages") arising from such Third Party Claim
incurred or suffered by such Purchaser or its Affiliates arising out of (a) any
misrepresentation or breach of warranty, covenant or agreement made or to be
performed by the Issuer pursuant to this Agreement, or (b) the breach by the
Issuer of any listing or other rules of any exchange upon


                                       25
<PAGE>

which the Issuer's securities are listed, or of any other laws or rules relating
to the issue and purchase of the Series D Shares pursuant to this Agreement.

     Section 9.05 Procedures. The party seeking indemnification under Section
9.04 (the "Indemnified Party") agrees to give prompt notice to the party against
whom indemnity is sought (the "Indemnifying Party") and to all other Purchasers
of the assertion of any claim, or the commencement of any suit, action or
proceeding in respect of which indemnity may be sought under such Section. The
Indemnifying Party may at its election participate in and control the defense of
any such suit, action or proceeding at its own expense. The Indemnifying Party
shall not be liable under Section 9.04 for any settlement effected without its
consent of any claim, litigation or proceeding in respect of which indemnity may
be sought hereunder.

     Section 9.06 Termination.

          (a) This Agreement may be terminated at any time prior to each
     Closing:

               (i) by mutual written agreement of the Issuer and each Purchaser;

               (ii) by the Issuer or the Purchasers if there shall be any law or
          regulation that makes consummation of the transactions contemplated
          hereby illegal or otherwise prohibited or if consummation of the
          transactions contemplated hereby would violate any nonappealable,
          final order, decree or judgment of any court or governmental body
          having competent jurisdiction.

               (iii) by the Issuer if the Second Closing has not occurred on or
          before the end of business on March 31, 2001, or by the Purchasers if
          the First Closing has not occurred on or before the end of business on
          March 1, 2001. The party desiring to terminate this Agreement pursuant
          to clauses 9.07(a)(ii) or (iii) shall give notice of such termination
          to the other parties hereto.

          (b) If this Agreement is terminated as permitted by Section 9.07(a),
     such termination shall be without liability of either party (or any
     stockholder, director, officer, employee, agent, consultant or
     representative of such party) to the other parties to this Agreement;
     provided that if such termination shall result from the willful (i) failure
     by any party to fulfill a condition to the performance of the obligations
     of the other parties, (ii) failure by any party to perform a covenant of
     this Agreement or (iii) breach by any party hereto of any representation,
     warranty, covenant or agreement contained herein, such party shall be fully
     liable for any and all Damages incurred or suffered by the other parties as
     a result of such failure or breach. The provisions of Sections 6.01, 9.01,
     9.07, 9.09, 9.10, 9.11, 9.12, 9.13, 9.14, 9.15 and 9.16 shall survive any
     termination hereof pursuant to Section 9.06(a).

          (c) Expenses; Documentary Taxes. The Issuer shall reimburse each
     Purchaser at the Closing for all of their respective reasonable
     out-of-pocket expenses, including, without limitation, the fees and
     disbursements of their counsel incurred in connection with the negotiation,
     preparation, execution and delivery of this Agreement (including the
     exhibits hereto) and the consummation of the transactions contemplated by
     this Agreement. The Issuer shall pay any and all stamp, transfer and other
     similar taxes payable or determined to be payable in connection with the
     execution and delivery of this Agreement or the Certificate of Designation
     or the issuance of the Securities or any shares of Common Stock issued upon
     conversion or exercise of the Securities.

     Section 9.07 Successors and Assigns. No party may assign any of its rights
and obligations hereunder without the prior written consent of the other parties
hereto. This Agreement shall be binding upon the parties hereto and their
respective successors and permitted assigns.


                                       26
<PAGE>

     Section 9.08 GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR
PROVISIONS (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE
OF NEW YORK. EACH OF THE PARTIES HERETO WAIVES TO THE FULLEST EXTENT PERMITTED
BY LAW ANY RIGHT TO TRIAL BY JURY IN RESPECT OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN
STATEMENT OR ACTION OF ANY PARTY HERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. THE
PARTIES TO THIS AGREEMENT EACH HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF A ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE
PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS
AGREEMENT WITH ANY COURT AS EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     Section 9.09 JURISDICTION. THE PARTIES HERETO AGREE THAT ANY SUIT, ACTION
OR PROCEEDING SEEKING TO ENFORCE ANY PROVISION OF, OR BASED ON ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH, THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY MAY ONLY BE BROUGHT IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK OR ANY NEW YORK STATE COURT SITTING IN NEW
YORK CITY, AND EACH OF THE PARTIES HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION
OF SUCH COURTS (AND OF THE APPROPRIATE APPELLATE COURTS THEREFROM) IN ANY SUCH
SUIT, ACTION OR PROCEEDING AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT
ANY SUCH SUIT, ACTION OR PROCEEDING WHICH IS BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING
MAY BE SERVED ON ANY PARTY ANYWHERE IN THE WORLD, WHETHER WITHIN OR WITHOUT THE
JURISDICTION OF ANY SUCH COURT. WITHOUT LIMITING THE FOREGOING, EACH PARTY
AGREES THAT SERVICE OF PROCESS ON SUCH PARTY AS PROVIDED IN SECTION 9.01 SHALL
BE DEEMED EFFECTIVE SERVICE OF PROCESS ON SUCH PARTY.

     Section 9.10 Counterparts. This Agreement may be executed in any number of
counterparts each of which shall be an original with the same effect as if the
signatures thereto and hereto were upon the same instrument.

     Section 9.11 Entire Agreement. This Agreement, the Registration Rights
Agreement, the Certificate of Designation and any other documents executed
concurrently herewith constitute the entire agreement and understanding among
the parties hereto and supersede any and all prior agreements and
understandings, written or oral, relating to the subject matter hereof.

     Section 9.12 Remedies. Each holder of Securities and Common Stock issuable
upon conversion or exercise thereof shall have all rights and remedies set forth
in this Agreement, the Warrants, the Articles of Incorporation and the
Certificate of Designation and all rights and remedies which such holders have
been granted at any time under any other agreement or contract and all of the
rights which such holders have under any law. Any Person having any rights under
any provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.


                                       27
<PAGE>

     Section 9.13 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

     Section 9.14 Descriptive Headings; Interpretation. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. The use of the word "including" in this
Agreement shall be by way of example rather than by limitation.

     Section 9.15 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.


                                       28
<PAGE>

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


UNITED SHIPPING & TECHNOLOGY, INC.        RS INVESTMENT MANAGEMENT, INC.

By: /s/ Jeffry Parell                     By: /s/ John Wallace
    ------------------------------            ----------------------------------
Name:  Jeffry Parell                      Name:  John Wallace
Title: Chief Executive Officer            Its:  Managing Director
                                          Portfolio Mgr. RS Diversified Growth
                                            Fund
TH LEE.PUTNAM INTERNET PARTNERS, L.P.

By:  TH Lee.Putnam Internet Advisors L.P.
Its: General Partner

By:

----------------------------------
Name: James Brown
Title: Managing Director

TH LEE.PUTNAM INTERNET PARALLEL PARTNERS, L.P.

By:  TH Lee.Putnam Internet Advisors L.P.
Its: General Partner

By:

----------------------------------
Name: James Brown
Title: Managing Director

THLI COINVESTMENT PARTNERS, LLC

By:

----------------------------------
Name: James Brown
Its:  Managing Member

BLUE STAR I, LLC

By:

----------------------------------
Name: Thomas H. Lee
Its:  Managing Member


                                       29
<PAGE>

                                   SCHEDULE A

                                   PURCHASERS


<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------

                         Number of        Consideration for   Number of Series D    Consideration for
                    Series D Shares to      Shares to be         Shares to be         Shares to be
                      be Purchased at     Purchased at the     Purchased at the     Purchased at the
    Purchaser        the First Closing      First Closing       Second Closing       Second Closing
-----------------------------------------------------------------------------------------------------
<S>                 <C>                  <C>                  <C>                  <C>

TH Lee.Putnam
 Internet
 Partners, LP

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

TH Lee.Putnam
 Internet
 Parallel
 Partners, LP

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

TH Li
 Coinvestment
 Partners LLC

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

Blue Star I, LLC

------------------------------------------------------------------------------------------------------
RS Investment              250,000           $2,000,000
 Management, Inc.

------------------------------------------------------------------------------------------------------
</TABLE>