Document:

PURCHASE AND SALE AGREEMENT

     THIS PURCHASE AND SALE  AGREEMENT  (this  "Agreement")  is made and entered
into as of this 15th day of  September,  2000 by and between  Ebiz  Enterprises,
Inc.,  a Nevada  corporation  ("Ebiz"),  and Caldera  Systems,  Inc., a Delaware
corporation ("Caldera Systems").

     WHEREAS, Caldera Systems has developed a marketing and distribution concept
called Electronic Linux Marketplace ("ELM"); and

     WHEREAS,  Ebiz desires to acquire all of Caldera Systems' right,  title and
interest  in  and to all of the  intellectual  property  and  assets  comprising
Caldera  Systems'  ELM (the "ELM  Assets") as such assets are more  particularly
described on Exhibit A, attached hereto and made a part hereof; and

     WHEREAS,  Caldera  Systems is willing to sell to Ebiz the ELM Assets on the
terms and conditions set forth in this Agreement; and

     WHEREAS,  Caldera  Systems  desires to invest in Ebiz on the condition that
the proceeds of its  investment be used solely for  development  of a viable ELM
Business  (as defined  below) in Ebiz and  Caldera  Systems is willing to assist
Ebiz in hiring certain employees of Caldera Systems to assist Ebiz in developing
and operating the ELM Business; and

     NOW, THEREFORE,  in consideration of the foregoing and the mutual covenants
and agreements hereinafter set forth, the parties hereto agree as follows:

SECTION 1. PURCHASE AND SALE OF ELM ASSETS AND EBIZ SHARES.

1.1  PURCHASE OF ELM ASSETS.

     Ebiz hereby  agrees to purchase  from Caldera  Systems and Caldera  Systems
agrees to sell to Ebiz all of the ELM  Assets  described  on  Exhibit  A, on and
subject to the following terms and conditions:

     (a)  The purchase  price for the ELM Assets shall be the combined  total of
          the  following  consideration  determined  and  paid in the  following
          manner:

         (i)   Upon the  execution  of this  Agreement,  Ebiz  shall  deliver to
               Caldera Systems 1,000,000 shares of Ebiz's common stock.

         (ii)  Not later than January 15, 2002,  Ebiz shall  prepare and deliver
               to  Caldera  Systems a written  statement  (the  "Sales  Report")
               setting  forth the total gross  revenue  received from Ebiz's ELM
               operations described on Exhibit B attached hereto and made a part
               hereof  (the "ELM  Operations")  during the  twelve-month  period
               commencing on December 15, 2000,  and  continuing  for the twelve
               month period  thereafter  ending December 15, 2001 (the "Earn Out
               Period"). Such gross revenues from Ebiz's ELM Operations shall be
               calculated in accordance  with United States  generally  accepted
               accounting  principles  ("GAAP")  and shall take into account all
               revenues  from the ELM  Operations.  Upon  receipt  of the  Sales

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               Report, Caldera Systems shall have 30 days in which to review the
               Sales Report and during such period of time,  Ebiz shall  provide
               Caldera  Systems  access to such books,  records and employees as
               Caldera Systems shall reasonably  request in connection with such
               review. Caldera Systems may object to the Sales Report by sending
               a written notice, explaining in reasonable detail the reasons for
               the objection to Ebiz within 10 days  following the 30 day review
               period.  Ebiz and Caldera Systems shall endeavor,  in good faith,
               to resolve any such  objections and reach  agreement on the Sales
               Report.  If Ebiz and Caldera  Systems  cannot  agree on the Sales
               Report,  each  of  Ebiz  and  Caldera  Systems  shall  select  an
               independent,  certified  public  accounting  firm to  review  the
               disputed  amounts  on the  Sales  Report in  accordance  with the
               provisions  of  this  Agreement.  If the  determination  of  such
               accounting  firms  are less than 10%  apart in  amount,  then the
               correct  amount  shall  be  deemed  to be  the  average  of  such
               determination.  If such determinations are more than 10% apart in
               value,   then  such  accounting   firms  shall  select  a  third,
               independent,  certified  public  accounting  firm and the correct
               revenue shall be deemed to be the average of the determination of
               the third accounting firm and the next closest determination. The
               determinations  made by such accounting  firms shall be final and
               binding on all parties,  absent manifest error.  Ebiz and Caldera
               Systems  shall each bear one-half of the fees and expenses of all
               accountants  selected  under  this  Section  1.1  to  review  the
               disputed amounts. If Ebiz does not receive a written objection to
               the Sales Report from Caldera  Systems  within 10 days  following
               the 30 day  review  period,  the  Sales  Report  shall be  deemed
               accepted by Caldera Systems.

               Upon  determination of the gross revenues  received by Ebiz which
               are  attributable  to its ELM  Business,  such  amount  shall  be
               multiplied  by 5 and  $1,380,000  shall  be  subtracted  from the
               resulting  amount and the  result,  which  shall not be less than
               zero,  shall be deemed to be the base amount (the "Base Amount").
               If the result of the foregoing  would be less than zero, then the
               Base Amount shall be deemed to be zero.

         (iii) As additional  consideration  for the ELM Assets,  Ebiz agrees to
               deliver  additional  shares of Ebiz's  common stock in the amount
               specified  in  subsection  (A)  or  subsection   (B)  below,   as
               applicable:

               (A)  If Ebiz's  shares are not  traded or quoted on any  national
                    securities  exchange,  or quoted on NASDAQ's National Market
                    System or quoted on the NASDAQ  Stock  market,  or quoted in
                    the  domestic  over-the-counter  market as  reported  by the
                    National  Quotation  Bureau,  Inc., or any similar successor
                    organization  at the  time of the  calculation  of the  Base
                    Amount,  then Caldera  Systems shall receive one  additional
                    share  of Ebiz  common  stock  for  each  $1.25  of the Base
                    Amount,  not to exceed  4,000,000  shares of additional Ebiz
                    common stock pursuant to this subsection (iii)(A).

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               (B)  If the Ebiz shares of common  stock are traded and quoted on
                    any  national  securities  exchange  or quoted  on  NASDAQ's
                    National  Market  or quoted on the  NASDAQ  Stock  Market or
                    quoted in a domestic  over-the-counter market as reported by
                    the  National   Quotation  Bureau,   Inc.,  or  any  similar
                    successor organization, then the number of additional shares
                    to be  delivered  to Caldera  Systems of Ebiz  common  stock
                    shall be  determined  as follows:  First,  the "fair  market
                    value" of the Ebiz common  shares shall be  determined.  For
                    purposes of this  Agreement,  "fair market  value" means the
                    five-day average of the following, as determined for each of
                    the five  business  days  immediately  preceding  the  final
                    determination  of the Base  Amount:  (1) the  closing  sales
                    price if such  security  is listed on a national  securities
                    exchange, or if not, (2) the closing sales price reported on
                    The NASDAQ Stock Market  National  Market,  or if there have
                    been no sales  on any  such  exchange  or The  NASDAQ  Stock
                    Market  National  Market on any day, then (3) the average of
                    the highest bid and lowest  asked  prices at the end of such
                    day, or, (4) if on any day such security is not so listed or
                    reported,  the  average  of the  representative  bid and ask
                    prices  quoted on The NASDAQ  Stock  Market as of 4:00 p.m.,
                    New  York  Time,  on such  day,  or,  (5) if on any day such
                    security  is not  quoted on The  NASDAQ  Stock  Market,  the
                    average of the highest bid and lowest ask prices on such day
                    in the domestic  over-the-counter  market as reported by the
                    National  Quotation  Bureau,  Inc., or any similar successor
                    organization; provided, that if such security is listed on a
                    national  securities  exchange,  the term "business days" as
                    used in this  sentence  means  business  days on which  such
                    exchange is open for trading.  Once the fair market value of
                    the Ebiz  common  shares has been  determined,  such  amount
                    shall be discounted  by 75% (the  "Discounted  Value").  One
                    dollar and thirty-eight cents ($1.38) shall then be added to
                    the  Discounted  Value and such amount shall be deemed to be
                    the "Purchase  Price Value" of a share of Ebiz common stock.
                    However, in no event shall Purchase Price Value be less than
                    $1.38 per share.  For  example,  if by using the formula set
                    forth above, the fair market value of the Ebiz common shares
                    is  $6.00,  the  Discounted  Value of such  shares  shall be
                    deemed to be $1.50 and the  Purchase  Price  Value  shall be
                    deemed to be $2.88 per share.  Upon determining the Purchase
                    Price  Value,  the  Base  Amount  shall  be  divided  by the
                    Purchase  Price Value and Caldera  Systems  shall receive an
                    additional  number of Ebiz common  shares  equal to the Base
                    Amount divided by the Purchase  Price Value,  rounded to the
                    nearest whole share; up to a maximum of 4,000,000 additional
                    shares of Ebiz  common  stock  pursuant to the terms of this
                    subsection (iii)(B).

1.2  CALDERA SYSTEMS  PURCHASE OF EBIZ  COMMON SHARES. Pursuant  to the terms of
this Agreement,  Caldera Systems hereby agrees to purchase  3,000,000  shares of
the common  stock of Ebiz for a cash  purchase  price of $1.00 per  share.  Such
shares shall be purchased pursuant to the terms and conditions set forth in this
Agreement. At the Closing,  Caldera Systems shall deliver to a bank account (the
"Restricted Account") by wire transfer the amount of $3,000,000. Such $3,000,000
shall be used  solely for the  purpose of  developing  and  implementing  an ELM
Business  in Ebiz  and it shall be used for no  other  purpose.  The  terms  and
conditions  of  such  use are as set  forth  on the  Use  Restriction  Agreement
attached hereto as Exhibit C and incorporated  herein by this reference.  At the
Closing,  Ebiz shall  deliver  3,000,000  shares of its common  stock to Caldera
Systems  in  exchange  for the  $3,000,000  payment  by  Caldera  Systems to the
Restricted Account.

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1.3  ADDITIONAL AGREEMENTS REGARDING PURCHASE AND SALE.

     (A) As further  consideration  for the  purchase  by Ebiz of the ELM Assets
from Caldera Systems, Caldera Systems agrees to assist Ebiz in hiring certain of
Caldera Systems' employees which have been engaged in the development of the ELM
concept  and  Caldera  Systems  agrees to use  reasonable  efforts  to make such
employees available to Ebiz for hiring by Ebiz for the continued development and
implementation of the ELM concept.  Caldera Systems makes no  representations or
warranties  regarding the availability of such employees or their willingness to
become employees of Ebiz.

     (B) Ebiz agrees to enter into an Investor Rights  Agreement  (providing for
registration rights, rights of first refusal on future equity offerings of Ebiz,
certain information rights and the right to convert Caldera Systems' common into
preferred  stock if Ebiz  issues  preferred  to any party after the date of this
Agreement) in substantially  the form of the Investor Rights Agreement  attached
hereto as Exhibit D and incorporated herein by this reference.

     (C) Ebiz,  Caldera Systems and certain key shareholders of Ebiz shall enter
into a shareholders  agreement  (providing for the election of Caldera  Systems'
representatives to the board of directors), such Shareholders Agreement to be in
substantially the form attached hereto as Exhibit E, and incorporated  herein by
this reference.

     (D) Caldera Systems is hereby granted,  on a nonexclusive  basis, a license
to use,  develop,  sell and  sublicense,  the Oracle based database  system (the
"Oracle Database") that the ELM Employees participated in designing and creating
on behalf of Caldera  Systems  prior to the  Closing  which  Oracle  Database is
designed to retain customer,  accounting,  inventory,  website,  sales and other
information  and  which  Oracle  Database  Ebiz,  through  its  ELM  development
activities, will continue to develop and complete as part of its ELM development
efforts.  For purposes of this Subsection (D), the "Oracle  Database" shall mean
the structure and design of such database system only, and shall not include any
data  that is  entered  into the  Oracle  Database  by or on  behalf of Ebiz for
storage,  management  or  processing.  Ebiz will  deliver to Caldera  Systems in
electronic  and hard copy format a copy of the Oracle  Database and all software
comprising a part thereof and all  embodiments of the Oracle Database as Caldera
Systems shall reasonably request. Caldera Systems' rights to the Oracle Database
shall be to the Oracle  Database  as it exists  through  the  completion  of the
expenditure  of the  $3,000,000  contained in the  Restricted  Account.  Caldera
Systems  shall  have no rights to changes or  developments  with  respect to the
Oracle  Database  occurring  after the  completion  of the  expenditure  of such
$3,000,000.

     (E) As additional  consideration  for Caldera Systems'  investment in Ebiz,
Ebiz hereby agrees that in all future  campaigns,  outsourcing  relationships or
other business relationships between Ebiz and Caldera Systems, Ebiz will: (i) in
all  situations  involving the sale or providing of Ebiz products or services to
any of its customers,  grant to Caldera Systems business terms for such products
or services  equivalent the most  favorable  terms upon which Ebiz provides such
products or services to any of such  customers;  and (ii) in connection with any
business  transaction  in which Ebiz is  selecting a person or entity to provide
goods or  services  to it,  Ebiz  shall,  to the extent  such good or service is
offered to such customers by Caldera Systems, consider, in good faith, retaining
Caldera Systems to provide the same; provided,  however, Ebiz may determine,  in
its sole  discretion  to obtain  such good or  service  from a party  other than
Caldera System on any basis,  including,  without  limitation,  price,  quality,
experience,  timeliness  etc.,  that  Ebiz,  in its sole  discretion,  considers
relevant  to its  decision.  The  foregoing  provisions  of  Section  1.3  shall
terminate at the time when  Caldera  shall cease to own at least 25% of the Ebiz
common stock issued to it pursuant to this Agreement.

     (F) Ebiz  further  agrees that all  Caldera  Confidential  Information  (as
defined  below)  delivered  by Caldera  Systems to Ebiz in  connection  with any

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program,  activity,  campaign or business  transaction  between Ebiz and Caldera
shall be kept confidential by Ebiz and shall not be used by Ebiz for any purpose
other than the business  transactions  between Ebiz and Caldera.  Ebiz agrees to
use  all  commercially   reasonable   efforts  to  safeguard  and  maintain  the
confidentiality  of  Caldera  Confidential  Information  and  not  to  use  such
information for any other purpose than to complete the business transaction with
Caldera  Systems.  For  purposes  of  this  Agreement,   "Caldera   Confidential
Information"  shall mean all information that is delivered by Caldera Systems to
Ebiz  that is  expressly  marked  or  identified  as  "confidential";  provided,
however,  "Caldera  Confidential  Information" shall not include any information
that (i) is in Ebiz's  possession at the time of disclosure;  (ii) either before
or after it has been  disclosed  to Ebiz,  is part of the  public  knowledge  or
literature,  not as a result of any action or  inaction  of Ebiz;  (iii) is of a
type or nature that could not be claimed by Caldera Systems as being proprietary
or  confidential;  (iv) is  approved  for  release by written  authorization  of
Caldera Systems; or (v) is required to be disclosed by Ebiz pursuant to subpoena
or any applicable law or governmental order.

1.4  CLOSING.

     The closing of the  purchase and sale of the ELM Assets and the Ebiz Shares
contemplated by Sections 1.1, 1.2 and 1.3 above (the "Closing") shall take place
at 10:00 a.m. on the date hereof,  or at such other time and date as the parties
hereto mutually agree (the "Closing Date").

SECTION 2. REPRESENTATIONS AND WARRANTIES OF CALDERA SYSTEMS RE: ELM ASSETS

     In order to induce  Ebiz to enter  into  this  Agreement,  Caldera  Systems
represents and warrants to Ebiz the following, except as set forth on a Schedule
of Exceptions  furnished by Caldera  Systems to Ebiz (the  "Caldera  Schedule of
Exceptions"),  specifically  identifying the relevant  subparagraphs(s)  hereof,
which exceptions shall be deemed to be representations and warranties as if made
hereunder:

2.1  ORGANIZATION AND CORPORATE POWER.

     Caldera Systems is a corporation  duly organized and validly existing under
the laws of the State of Delaware,  and is qualified to do business as a foreign
corporation in each  jurisdiction  in which the failure to be so qualified would
have a material adverse effect on its assets, liabilities,  financial condition,
business,  or results of  operations  (a  "Material  Adverse  Effect").  Caldera
Systems has all required corporate power and corporate authority to carry on its
business as presently  conducted,  to enter into and perform this  Agreement and
the agreements  contemplated  hereby to which it is a party and to carry out the
transactions  contemplated  hereby and  thereby,  including  the sale of the ELM
Assets and the purchase of the Ebiz common shares.

2.2  AUTHORIZATION AND NON-CONTRAVENTION.

     The  execution,  delivery  and  performance  by  Caldera  Systems  of  this
Agreement and each other  agreement,  document and instrument to be executed and
delivered by Caldera  Systems  pursuant to or as contemplated by this Agreement,
including,  without  limitation,  the sale of the ELM Assets and the purchase of
the Ebiz Shares, have been duly authorized, by all necessary corporate action on
behalf  of  Caldera  Systems.  This  Agreement  and each such  other  agreement,
document, and instrument, when executed and delivered, will constitute valid and
binding  obligations of Caldera  Systems,  enforceable in accordance  with their
respective  terms,  except as may be limited by applicable law and public policy
and subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors= rights
generally  and (ii) general  principles  of equity  and/or laws  relating to the
availability  of  specific  performance,  injunctive  relief or other  equitable
remedies, whether such enforceability is considered in a proceeding in equity or

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at law. The execution and delivery by Caldera Systems of this Agreement and each
other agreement, document and instrument to be executed and delivered by Caldera
Systems pursuant hereto or as contemplated hereby and the performance by Caldera
Systems of the transactions contemplated hereby and thereby, including,  without
limitation,  the sale of the ELM Assets and the purchase of the Ebiz Shares,  do
not and will not: (A)  violate,  conflict  with or result in a default  (whether
after the giving of notice,  lapse of time or both) under any material contract,
mortgage, indenture, contract, instrument or obligation to which Caldera Systems
is a party or by which it or its  assets  are  bound,  or any  provision  of the
Caldera Systems'  Articles of Incorporation or Caldera Systems' Bylaws, or cause
the creation of any material  lien,  charge or  encumbrance  upon any of the ELM
Assets;  (B) violate or result in a violation of, or constitute a default under,
any provision of any material law,  regulation or rule, or any judgment,  order,
writ,  decree  or  statute  of,  or any  restriction  imposed  by,  any court or
governmental  agency  applicable  to Caldera  Systems;  (C) require from Caldera
Systems any notice to, declaration or filing with, or consent or approval of any
governmental  authority or third party other than such filings as have been made
or consents which have been obtained prior to the Closing; or (D) accelerate any
obligation under, or give rise to a right of termination, suspension, revocation
or  impairment  of, any material  agreement,  permit,  license or  authorization
applicable to any of Caldera Systems=  operations,  assets or properties,  or by
which Caldera Systems is bound.

2.3  PERMITS.

     Caldera  Systems has all  franchises,  permits,  licenses,  and any similar
authority  necessary  for the conduct of its business as now being  conducted by
it,  the lack of which  could  have a  Material  Adverse  Affect  the  business,
properties, prospects or financial condition of Caldera Systems. Caldera Systems
is not in default in any material respect under any of such franchises, permits,
licenses or other similar authority.

2.4  LITIGATION.

     There is no action,  suit,  proceeding or investigation  pending or, to the
best of Caldera Systems' knowledge, currently threatened against Caldera Systems
that questions the validity of this  Agreement,  or the right of Caldera Systems
to enter into this  Agreement,  or to consummate the  transactions  contemplated
hereby, or that might result,  either  individually or in the aggregate,  in any
material  adverse  change in the assets,  business,  properties,  prospects,  or
financial  condition of Caldera  Systems,  or in any material  impact on the ELM
Assets.

2.5  TITLE TO PROPERTY AND ASSETS; LEASES.

     Caldera  Systems has good and  marketable  title to the ELM Assets free and
clear of all mortgages,  liens, claims and encumbrances and upon consummation of
the transactions  contemplated  hereby, Ebiz will acquire the ELM Assets free of
any liens, encumbrances or third-party rights, subject to the qualifications set
forth in Section 2.6 hereof.

2.6  INTELLECTUAL PROPERTY.

     To the  best of  Caldera  Systems'  knowledge,  the  ELM  Assets  have  not
infringed and do not infringe the copyrights of any third party.  To the best of
Caldera Systems'  knowledge,  Caldera Systems has not misappropriated and is not
misappropriating  any trade secrets or proprietary  confidential  information of
any third  party  with  respect  to the ELM  Assets,  and the ELM  Assets do not
include  or embody  any trade  secret or  proprietary  confidential  information
misappropriated  by Caldera Systems from any third party. To the best of Caldera
Systems'  knowledge,  the ELM Assets have not  infringed and do not infringe any
patents, trademarks, service marks, or trade names of any third party. Each item
of  Intellectual  Property  constituting  part of the  ELM  Assets  owned  by or
licensed to Caldera Systems  immediately  prior to the Closing hereunder will be

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owned by or  licensed  by Ebiz on  identical  terms and  conditions  immediately
subsequent to the Closing hereunder (i.e., identical to any applicable terms and
conditions immediately prior to the Closing).

               (i) To the best of Caldera  Systems'  knowledge,  none of Caldera
          Systems  and  its   directors  and  officers   (and   employees   with
          responsibility  for Intellectual  Property  matters) has ever received
          any charge,  complaint,  claim,  demand,  or notice  alleging any such
          infringement,  misappropriation,  or violation  by Caldera  Systems of
          Intellectual  Property related to the ELM Assets  (including any claim
          that  Caldera  Systems  must  license  or  refrain  from using any ELM
          Asset).   Exhibit  A  sets  forth  a  description   of  each  item  of
          Intellectual Property constituting part of the ELM Assets. To the best
          of Caldera  Systems'  knowledge  and the  knowledge of  directors  and
          officers (and employees with responsibility for Intellectual  Property
          matters)  of  Caldera   Systems,   no  third   party  has   infringed,
          misappropriated,  or otherwise violated any ELM Intellectual  Property
          rights of Caldera Systems.

               (ii) Exhibit A  identifies  (a) each patent which has been issued
          or assigned  to Caldera  Systems  related to the ELM Assets,  (b) each
          pending  patent  application  which has been  filed by or for  Caldera
          Systems related to the ELM Assets,  (c) each trademark or service mark
          registration  issued or assigned to Caldera Systems related to the ELM
          Assets,  (d) each pending  trademark or service mark application which
          has been filed by or for  Caldera  Systems  related to the ELM Assets,
          (e) each copyright  registration issued or assigned to Caldera Systems
          related to the ELM  Assets,  (f) each  pending  copyright  application
          which has been  filed by or for  Caldera  Systems  related  to the ELM
          Assets,  and (g) each license which Caldera Systems has granted to any
          third party with respect to any of Caldera  Systems' ELM  Intellectual
          Property.  Caldera  Systems  will deliver to Ebiz correct and complete
          copies of all such patents, registrations,  applications, and licenses
          (as amended to date).  Exhibit A also  identifies  each trade name and
          each  unregistered  trademark  or  service  mark  owned or  claimed by
          Caldera  Systems in  connection  with the ELM Assets.  With respect to
          each  patent,  application,  and  registration  (each  an  "IP  item")
          identified on Exhibit A:

                    (A) Caldera Systems possess all right,  title,  and interest
               in and to the IP item,  free and  clear  of any  mortgage,  lien,
               claim, license, or other encumbrance;

                    (B) to the best of Caldera Systems'  knowledge,  the IP item
               is not subject to any outstanding  injunction,  judgment,  order,
               decree, ruling, or charge;

                    (C) to the best of Caldera  Systems'  knowledge,  no action,
               suit,  proceeding,  hearing,  investigation,  charge,  complaint,
               claim,  or demand is pending or, to the best of Caldera  Systems'
               knowledge,  and the  knowledge of the directors and officers (and
               employees with responsibility for Intellectual  Property matters)
               of Caldera Systems is threatened  which  challenges the legality,
               validity, enforceability, use, or ownership of the IP item; and

                    (D) Caldera Systems has never agreed to indemnify any Person
               for or against any interference, infringement,  misappropriation,
               or other conflict with respect to the IP item.

               (iii)  Exhibit A identifies  each item of  Intellectual  Property
          that any third party owns and licenses to Caldera  Systems,  excluding
          licenses to commercially  available software products (e.g.,  Windows,
          Microsoft  Office,  etc.) used by  Caldera  Systems as an end user and
          which is used in connection with the ELM Assets.  Caldera Systems will
          deliver to Ebiz at the  Closing  correct  and  complete  copies of all
          agreements  applicable to such licenses (as amended to date). The term
          "license"  is intended to include  "sublicense."  With respect to each
          such license and agreement  required to be identified on Exhibit A, to
          the best of Caldera Systems' knowledge;

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                    (A) each  such  license  and  agreement  are  legal,  valid,
               binding, enforceable, and in full force and effect;

                    (B) the license  and  agreement  will  continue to be legal,
               valid,  binding,  enforceable,  and in full  force and  effect on
               identical terms on the day immediately following the Closing;

                    (C) no party to such  license or  agreement  is in breach or
               default,  and to the knowledge of Caldera  Systems,  no event has
               occurred  which with notice or lapse of time would  constitute  a
               breach  or  default  or  permit  termination,   modification,  or
               acceleration thereunder;

                    (D) no party to such license or agreement has repudiated any
               provision thereof;

                    (E)  such  license  or  agreement  is  not  subject  to  any
               outstanding  injunction,  judgment,  order,  decree,  ruling,  or
               charge; and

                    (F) no action,  suit,  proceeding,  hearing,  investigation,
               charge,  complaint,  claim, or demand is pending or is threatened
               which challenges the legality,  validity,  or  enforceability  of
               such license or agreement; and

                    (G) no consent to the assignment of any of the ELM Assets is
               required.

               (iv)  To  the  best  of  Caldera  Systems'  knowledge  and to the
          knowledge  of  the  directors  and  officers   (and   employees   with
          responsibility for Intellectual  Property matters) of Caldera Systems,
          neither Ebiz nor Caldera  Systems will  infringe,  misappropriate,  or
          otherwise violate any Intellectual Property rights of third parties as
          a result  of the  continued  operation  by Ebiz of the ELM  Operations
          contemplated by Exhibit B.

2.7  MANUFACTURING AND MARKETING RIGHTS.

     Except as set forth on the Caldera Systems Schedule of Exceptions,  Caldera
Systems has not  granted  rights to  manufacture,  produce,  assemble,  license,
market or sell any  products or rights  related to the ELM Business to any other
person and is not bound by any agreement that affects Caldera  Systems' right to
develop, manufacture,  assemble, distribute, market or sell products or services
in its ELM Business.

                                      -8-
<PAGE>
2.8  EMPLOYEES; EMPLOYEE COMPENSATION.

     To the  best of  Caldera  Systems'  knowledge,  the  relationships  between
Caldera  Systems and the employees  who are being made  available to be hired by
Ebiz (the "ELM  Employees")  are good and no labor dispute or claims are pending
or  threatened.  None of the ELM  Employees  belong to any  union or  collective
bargaining unit.  Caldera Systems has complied in all material respects with all
applicable state and federal laws related to employment of the ELM Employees. To
the best of Caldera Systems' knowledge,  none of the ELM Employees is or will be
in violation of any  judgment,  decree or order,  or any term of any  employment
contract,  patent disclosure agreement,  or other contract or agreement relating
to the  relationship  of any such  employee with Caldera  Systems,  or any other
party because of the nature of the business  conducted or presently  proposed to
be  conducted  by Caldera  Systems or to the use by such  employee of his or her
best  efforts  with  respect to such  business.  Subject  to general  principles
related  to  wrongful  termination  of  employees,  the  employment  of each ELM
Employee is terminable at the will of Caldera Systems.  Attached as Exhibit E is
a list of each of the ELM Employees and their current compensation.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF EBIZ

     In order to induce  Caldera  Systems  to enter  into this  Agreement,  Ebiz
represents and warrants to Caldera Systems the following, except as set forth on
a  Schedule  of  Exceptions  furnished  by Ebiz to  Caldera  Systems  (the "Ebiz
Schedule of Exceptions"),  specifically identifying the relevant subparagraph(s)
hereof, which exceptions shall be deemed to be representations and warranties as
if made hereunder:

3.1  ORGANIZATION AND CORPORATE POWER.

     Ebiz is a corporation duly organized and validly existing under the laws of
the State of Nevada and is  qualified  to own and  operate  its  properties  and
assets,  to do business as a foreign  corporation in each  jurisdiction in which
the  failure  to be so  qualified  would have a Material  Adverse  Effect.  Each
Subsidiary of Ebiz is a corporation  duly  organized and validly  existing under
its state of  incorporation  and is qualified to own and operate its  properties
and assets,  to do business as a foreign  corporation  in each  jurisdiction  in
which the failure to be so qualified would have a Material Adverse Effect.  Each
of Ebiz and its  Subsidiaries  has all required  corporate  power and  corporate
authority  to carry on its business as  presently  conducted,  to enter into and
perform this Agreement and the agreements  contemplated  hereby to which it is a
party  and to  carry  out the  transactions  contemplated  hereby  and  thereby,
including the issuance of the Ebiz common shares to be issued to Caldera Systems
hereunder  (the  "Ebiz  Shares").  Ebiz is not in  violation  of any term of its
Articles of Incorporation,  as amended as of the date hereof (the "Ebiz Articles
of  Incorporation"),  or Bylaws,  as amended  as of the date  hereof  (the "Ebiz
Bylaws"),  the  effect of which  would be to have a Material  Adverse  Effect on
Ebiz.

3.2  AUTHORIZATION AND NON-CONTRAVENTION.

     The execution,  delivery and performance by Ebiz of this Agreement and each
other  agreement,  document and  instrument to be executed and delivered by Ebiz
pursuant to or as contemplated by this Agreement, including, without limitation,
the issuance and delivery of the Ebiz Shares, have been duly authorized,  by all
necessary corporate action on behalf of Ebiz. This Agreement and each such other
agreement,   document,  and  instrument,   when  executed  and  delivered,  will
constitute valid and binding obligations of Ebiz, enforceable in accordance with
their  respective  terms,  except as may be limited by applicable law and public
policy and subject to (i)  applicable  bankruptcy,  insolvency,  reorganization,
moratorium  and other  laws of  general  application  affecting  enforcement  of
creditors'  rights  generally and (ii) general  principles of equity and/or laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies, whether such enforceability is considered in a proceeding in
equity or at law. The execution and delivery by Ebiz of this  Agreement and each

                                      -9-
<PAGE>
other  agreement,  document and  instrument to be executed and delivered by Ebiz
pursuant  hereto or as  contemplated  hereby and the  performance by Ebiz of the
transactions contemplated hereby and thereby, including, without limitation, the
offer, sale,  issuance and delivery of the Ebiz Shares, do not and will not: (A)
violate,  conflict  with or  result in a default  (whether  after the  giving of
notice, lapse of time or both) under any material contract, mortgage, indenture,
contract, instrument or obligation to which Ebiz or any of its Subsidiaries is a
party or by which it or its  assets  are  bound,  or any  provision  of the Ebiz
Articles of Incorporation or Ebiz Bylaws,  or cause the creation of any material
lien,  charge  or  encumbrance  upon  any of the  assets  of  Ebiz or any of its
Subsidiaries;  (B) to Ebiz's knowledge,  violate or result in a violation of, or
constitute a default  under,  any provision of any material  law,  regulation or
rule, or any judgment,  order,  writ,  decree or statute of, or any  restriction
imposed by, any court or  governmental  agency  applicable to Ebiz or any of its
Subsidiaries;  (C) require from Ebiz any notice to,  declaration or filing with,
or consent or approval of any  governmental  authority or third party other than
such filings as have been made prior to the Closing and/or as may be required to
secure an exemption from  qualification of the offer and sale of the Ebiz Shares
under the Securities Act of 1933 (the  "Securities  Act"),  and applicable state
securities and blue sky laws; or (D) accelerate  any obligation  under,  or give
rise to a right of  termination,  suspension,  revocation or impairment  of, any
material  agreement,  permit,  license  or  authorization  applicable  to any of
Ebiz's, or any of its Subsidiaries', business, operations, assets or properties,
to which Ebiz, or any of its Subsidiaries, is a party or by which Ebiz is bound.

3.3  CAPITALIZATION.

     (A) For purposes of this Section 3.3,  "Merger  Agreement"  shall mean that
certain  Agreement  and Plan of Merger,  including all  appendices  and exhibits
thereto, dated August 7, 2000, by and between Ebiz, Linux Mall Acquisition, Inc.
("Merger Sub") and LinuxMall.com,  Inc.  ("LinuxMall");  "Merger" shall mean the
contemplated  merger  between  Merger Sub and LinuxMall  described in the Merger
Agreement;  "Merger Consideration" shall mean all shares of common stock of Ebiz
that Ebiz is required to issue pursuant to Section 1.3 of the Merger  Agreement;
and "Merger  Related  Shares" shall mean all shares of preferred or common stock
of Ebiz, other than the Merger  Consideration,  that Ebiz is or may be obligated
to issue pursuant to any agreement that, pursuant to the Merger Agreement,  Ebiz
is  expressly  required  to enter  into in  connection  with the  closing of the
Merger.

     (B)  As  of  the  Closing,   without  giving  effect  to  the  transactions
contemplated hereby, the authorized capital stock of Ebiz consists of 70,000,000
shares of common stock of which 8,737,566  shares are issued and outstanding and
5,000,000  shares of  preferred  stock of which  7,590  shares  are  issued  and
outstanding. As of the Closing, other than the shares described in the preceding
sentence,  and currently outstanding options to purchase 1,152,000 shares of the
common stock of Ebiz, warrants to purchase 382,513 shares of the common stock of
Ebiz,  debentures  convertible into 3,496,647 shares of the common stock of Ebiz
(based on an assumed price of $2.00 per share;  the conversion rate with respect
to these  debentures  is based upon the per share  market  price of Ebiz  common
stock  at the time of  conversion),  the  Merger  Consideration  and the  Merger
Related Shares,  Ebiz has not issued any warrants,  options,  rights (including,
without  limitation,  conversion  or  preemptive  rights  and  rights  of  first
refusal),  proxy or  stockholder  agreements  or  agreements of any kind for the
purchase or acquisition from Ebiz, or any of its Subsidiaries,  of any shares of
its, or any of its Subsidiaries',  capital stock or other securities, including,
without   limitation,   any  securities   convertible  into  or  exercisable  or
exchangeable for such shares or any warrants, options or other rights to acquire
any such convertible  securities.  As of the Closing, and after giving effect to
the transactions  contemplated  hereby, all of the outstanding shares of capital
stock of Ebiz and each of its  Subsidiaries  will  have  been  duly and  validly
authorized  and  issued,  fully paid and  nonassessable  and not  subject to any
preemptive  rights and will have been  offered,  issued,  sold and  delivered in
compliance  with applicable  federal and state  securities  laws.  Except as set
forth in the Ebiz Articles of  Incorporation,  there are no  preemptive  rights,
rights of first  refusal,  put or call rights or  obligations  or  anti-dilution

                                      -10-
<PAGE>
rights with respect to the issuance,  sale or redemption of Ebiz's capital stock
or other  securities.  Except for the Merger  Agreement,  Ebiz is not a party or
subject to any agreement or understanding, and, to the best of Ebiz's knowledge,
there is no  agreement  or  understanding  between any persons  that  affects or
relates to the voting or giving of written consents with respect to any security
or the  voting by a  director  of Ebiz.  Upon the  Closing  of the  transactions
contemplated hereby, the 4,000,000 shares of common stock of Ebiz to be owned by
Caldera Systems represents not less than 21.70% of Ebiz's total capital stock on
a fully  diluted  basis (after  giving  effect to all  outstanding  warrants and
options and any unallocated stock option pool of 348,000 shares and after giving
consideration to the conversion of any preferred stock or debentures into common
stock of Ebiz).

     (C) If the Merger is  consummated,  giving  effect to the  issuance  of the
Merger  Consideration  and the  4,000,000  shares of common  stock of Ebiz to be
issued to Caldera Systems in connection with the Closing,  but not giving effect
to any other shares of common or preferred  stock of Ebiz that may be authorized
or issued after the Closing and assuming that none of the LinuxMall shareholders
exercise their dissenter's  rights in connection with the Merger, the authorized
capital stock of Ebiz will consist of 70,000,000 shares of common stock of which
21,499,716  shares  will be  issued  and  outstanding  and  5,000,000  shares of
preferred stock of which no shares will be issued and outstanding.

3.4  VALID ISSUANCE OF EBIZ SHARES.

     The Ebiz Shares,  when issued,  sold and delivered in  accordance  with the
terms of this Agreement for the consideration expressed herein, will be duly and
validly issued, fully paid and non-assessable,  and will be free of restrictions
on transfer other than  restrictions  on transfer under this Agreement and under
applicable state and federal securities laws.

3.5  SUBSIDIARIES.

     Except as set forth in the Ebiz Schedule of  Exceptions,  Ebiz does not own
or  control,  directly or  indirectly,  any  interest in any other  corporation,
partnership,  limited liability  company,  association or other business entity.
Ebiz  is  not a  participant  in  any  joint  venture,  partnership  or  similar
arrangement.

3.6  CONTRACTS AND OTHER COMMITMENTS.

     Neither  Ebiz  nor any of its  Subsidiaries  has  and/or  is  bound  by any
contract,  agreement,  lease,  commitment,  or proposed  transaction,  judgment,
order,  writ or decree,  written or oral,  absolute  or  contingent,  other than
contracts  entered into in the ordinary  course of business.  For the purpose of
this paragraph,  employment and consulting  contracts and license agreements and
any other agreements  relating to Ebiz's or any of its Subsidiary's  acquisition
or disposition of Intellectual  Property (other than standard  end-user  license
agreements) shall not be considered to be contracts entered into in the ordinary
course of business.

3.7  RELATED-PARTY TRANSACTIONS.

     No  employee,  officer,  stockholder  or  director  of  Ebiz  or any of its
Subsidiaries  or member of his or her immediate  family is indebted to Ebiz, nor
is Ebiz or any  Subsidiary  indebted  (or  committed  to make loans or extend or
guarantee  credit)  to any of them,  other  than (i) for  payment  of salary for
services rendered, (ii) reimbursement for reasonable expenses incurred on behalf
of Ebiz or such Subsidiary,  and (iii) for other standard employee benefits made
generally  available  to  all  employees   (including  stock  option  agreements
outstanding  under any stock  option plan  approved by the Board of Directors of
Ebiz or such Subsidiary).  To the best of Ebiz's or such Subsidiary's knowledge,

                                      -11-
<PAGE>
none of such persons has any direct or indirect  ownership  interest in any firm
or  corporation  with which Ebiz or such  Subsidiary is affiliated or with which
Ebiz or such Subsidiary has a business relationship,  or any firm or corporation
that competes with Ebiz or such Subsidiary, except that employees, stockholders,
officers or directors of Ebiz or such  Subsidiary and members of their immediate
families may own stock in  publicly-traded  companies that may compete with Ebiz
or such Subsidiary.  To the best of Ebiz's or such  Subsidiary's  knowledge,  no
officer,  director or stockholder or any member of their immediate  families is,
directly or  indirectly,  interested in any material  contract with Ebiz or such
Subsidiary  (other than such contracts as relate to any such person's  ownership
of capital stock or other securities of Ebiz or such Subsidiary).

3.8  REGISTRATION RIGHTS.

     Except as set forth in the Caldera Systems Investor Rights Agreement,  Ebiz
is presently not under any obligation and has not granted any rights to register
under the Securities Act any of its presently  outstanding  securities or any of
its securities that may subsequently be issued.

3.9  PERMITS.

     Each of Ebiz and its  Subsidiaries has all franchises,  permits,  licenses,
and any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could  materially  and  adversely  affect the
business,  properties,  prospects  or  financial  condition  of Ebiz or any such
Subsidiary,  and believes it can obtain,  without  undue burden or expense,  any
similar  authority  for the conduct of its business as  presently  planned to be
conducted. Neither Ebiz nor any Subsidiary is in default in any material respect
under any of such franchises, permits, licenses or other similar authority.

3.10 LITIGATION.

     There is no action,  suit,  proceeding or investigation  pending or, to the
best  of  Ebiz's  or any of its  Subsidiary's  knowledge,  currently  threatened
against  Ebiz or any of its  Subsidiaries  that  questions  the validity of this
Agreement,  or the right of Ebiz to enter into this Agreement,  or to consummate
the transactions  contemplated hereby, or that might result, either individually
or in the aggregate,  in any material  adverse  change in the assets,  business,
properties,   prospects,   or  financial   condition  of  Ebiz  or  any  of  its
Subsidiaries,  or in any material change in the current equity ownership of Ebiz
or any of its Subsidiaries.

3.11 RETURNS AND COMPLAINTS.

     Neither  Ebiz  nor  any of  its  Subsidiaries  has  received  any  customer
complaints  concerning  alleged  defects in its products (or the design thereof)
that, if true,  would  materially  adversely  affect the operations or financial
condition of Ebiz or any of its Subsidiaries.

3.12 DISCLOSURE.

     Ebiz has  provided  Caldera  Systems  with all the  information  reasonably
available to it without  undue  expense that  Caldera  Systems has  requested in
writing for  deciding  whether to purchase  the Ebiz Shares and all  information
that Ebiz believes is reasonably  necessary to enable Caldera Systems to make an
informed  investment  decision.  The  foregoing  representation  is  limited  to
specific  information  regarding  Ebiz and is not  intended  to  extend  to such
matters as general economic conditions or industry-wide type risks.

                                      -12-
<PAGE>
3.13 OFFERING.

     Subject,   in  part,  to  the  truth  and  accuracy  of  Caldera   Systems'
representations set forth in this Agreement, the offer, sale and issuance of the
Ebiz Shares as contemplated  by this Agreement are exempt from the  registration
requirements of the Securities  Act, and neither Ebiz, any of its  Subsidiaries,
nor any  authorized  agent  acting on its behalf will take any action  hereafter
that would cause the loss of such exemption.

3.14 TITLE TO PROPERTY AND ASSETS; LEASES.

     Except  (i) as  reflected  in the Ebiz  Financial  Statements  (defined  in
paragraph 3.15), (ii) for liens for current taxes not yet delinquent,  (iii) for
liens  imposed  by law and  incurred  in the  ordinary  course of  business  for
obligations not past due to carriers,  warehousemen,  laborers,  materialmen and
the like,  (iv) for liens in  respect  of pledges  or  deposits  under  workers'
compensation laws or similar legislation or (v) for minor defects in title, none
of which,  individually or in the aggregate,  materially interferes with the use
of such  property,  each of Ebiz and its  Subsidiaries  has good and  marketable
title to its property and assets free and clear of all mortgages,  liens, claims
and  encumbrances.  With respect to the  property and assets it leases,  each of
Ebiz and its  Subsidiaries is in compliance with such leases and, to the best of
its knowledge,  holds a valid  leasehold  interest free of any liens,  claims or
encumbrances, subject to clauses (i)-(v) above.

3.15 FINANCIAL STATEMENTS.

     Ebiz has delivered to Caldera  Systems its unaudited  financial  statements
(balance sheet and profit and loss statement,  statement of stockholders' equity
and statement of cash flows,  including  notes thereto) at June 30, 2000 and for
the fiscal year then ended (the "Ebiz Financial Statements"). The Ebiz Financial
Statements have been prepared in accordance with generally  accepted  accounting
principles applied on a consistent basis throughout the periods  indicated.  The
Ebiz Financial  Statements fairly present the financial  condition and operating
results of Ebiz as of the dates, and for the periods,  indicated therein. Except
as set  forth  in the Ebiz  Financial  Statements,  neither  Ebiz nor any of its
Subsidiaries has any material liabilities,  contingent or otherwise,  other than
(i) liabilities  incurred in the ordinary course of business  subsequent to June
30, 2000 and (ii)  obligations  under contracts and commitments  incurred in the
ordinary course of business and not required under generally accepted accounting
principles  to be  reflected  in the Ebiz  Financial  Statements,  which in both
cases,  individually  or in the  aggregate,  are not  material to the  financial
condition or  operating  results of Ebiz or any of its  Subsidiaries.  Except as
disclosed  in  the  Ebiz  Financial  Statements,  neither  Ebiz  nor  any of its
Subsidiaries  is a guarantor  or  indemnitor  of any  indebtedness  of any other
person,  firm or corporation.  Ebiz and each of its  Subsidiaries  maintains and
will  continue  to  maintain a standard  system of  accounting  established  and
administered in accordance with GAAP.

3.16 CHANGES.

     Since June 30, 2000 there has not been any event or  condition  of any type
that has materially and adversely affected the business, properties or financial
condition of Ebiz or any of its Subsidiaries.

3.17 INTELLECTUAL PROPERTY.

     To  the  best  of  Ebiz's  and  its  Subsidiaries'  knowledge,   Ebiz,  its
Subsidiaries  and their  products  have not  infringed  and do not  infringe the
copyrights  of any  third  party.  To the best of Ebiz's  and its  Subsidiaries'
knowledge,   neither  Ebiz  nor  its  Subsidiaries  has  misappropriated  or  is
misappropriating  any trade secrets or proprietary  confidential  information of
any third party, and the products of Ebiz and its Subsidiaries do not include or

                                      -13-
<PAGE>
embody any trade secret or proprietary confidential information  misappropriated
by Ebiz or its Subsidiaries  from any third party. To the best of Ebiz's and its
Subsidiaries' knowledge,  each of Ebiz and its Subsidiaries and their respective
products have not infringed and do not infringe any patents, trademarks, service
marks,  or trade names of any third party.  Each item of  Intellectual  Property
owned by or  licensed  to Ebiz  and its  Subsidiaries  immediately  prior to the
Closing  hereunder  will be owned by or licensed to Ebiz and the  Subsidiary  on
identical terms and conditions  immediately  subsequent to the Closing hereunder
(i.e., identical to any applicable terms and conditions immediately prior to the
Closing).

               (i) To the best of Ebiz's and its Subsidiaries'  knowledge,  none
          of Ebiz or its  Subsidiaries  or their  directors  and  officers  (and
          employees with  responsibility for Intellectual  Property matters) has
          ever received any charge, complaint, claim, demand, or notice alleging
          any such infringement,  misappropriation,  or violation by Ebiz or its
          Subsidiaries of Intellectual  Property  (including any claim that Ebiz
          and  its   Subsidiaries   must  license  or  refrain  from  using  any
          Intellectual  Property  rights  of any  third  party).  To the best of
          Ebiz's and its Subsidiaries'  knowledge and the knowledge of directors
          and officers  (and  employees  with  responsibility  for  Intellectual
          Property  matters)  of Ebiz and its  Subsidiaries,  no third party has
          infringed,  misappropriated,  or otherwise  violated any  Intellectual
          Property rights of Ebiz and its Subsidiaries.

               (ii) The Ebiz Schedule of Exceptions  identifies  (a) each patent
          which has been issued or assigned to Ebiz or any of its  Subsidiaries,
          (b) each  pending  patent  application  which has been filed by or for
          Ebiz or any of its  Subsidiaries,  (c) each  trademark or service mark
          registration  issued or assigned  to Ebiz or any of its  Subsidiaries,
          (d) each pending  trademark or service mark application which has been
          filed  by or for  Ebiz or any its  Subsidiaries,  (e)  each  copyright
          registration  issued or assigned  to Ebiz or any of its  Subsidiaries,
          (f) each pending copyright  application which has been filed by or for
          Ebiz or any of its  Subsidiaries,  and (g) each license which Ebiz and
          its Subsidiaries has granted to any third party with respect to any of
          Ebiz's  Intellectual  Property  excluding  licenses  to end  users  of
          Company products granted in the ordinary course of business.  Ebiz has
          delivered to Caldera  Systems  correct and complete copies of all such
          patents,  registrations,  applications,  and  licenses  (as amended to
          date). The Ebiz Schedule of Exceptions also identifies each trade name
          and each  unregistered  trademark  or service mark owned or claimed by
          any of Ebiz  and its  Subsidiaries  in  connection  with  any of their
          businesses.  With  respect  to  each IP item  identified  in the  Ebiz
          Schedule of Exceptions:

                    (A) Ebiz and its Subsidiaries  possess all right, title, and
               interest in and to the IP item,  free and clear of any  mortgage,
               lien, claim, license, or other encumbrance;

                    (B) to the best of Ebiz's and its  Subsidiaries'  knowledge,
               the  IP  item  is not  subject  to  any  outstanding  injunction,
               judgment, order, decree, ruling, or charge;

                    (C) to the best of Ebiz's or its Subsidiaries' knowledge, no
               action,  suit,  proceeding,   hearing,   investigation,   charge,
               complaint,  claim, or demand is pending or, to the best of Ebiz's
               or  its  Subsidiaries'   knowledge,  and  the  knowledge  of  the
               directors and officers (and  employees  with  responsibility  for
               Intellectual  Property matters) of Ebiz and its Subsidiaries,  is
               threatened    which    challenges    the   legality,    validity,
               enforceability, use, or ownership of the IP item; and

                    (D) none of Ebiz and its  Subsidiaries  has ever  agreed  to
               indemnify   any   Person  for  or   against   any   interference,
               infringement, misappropriation, or other conflict with respect to
               the IP item.

                                      -14-
<PAGE>
               (iii) The Ebiz  Schedule of  Exceptions  identifies  each item of
          Intellectual Property that any third party owns and licenses to any of
          Ebiz  and  its  Subsidiaries,   excluding   licenses  to  commercially
          available software products (e.g.,  Windows,  Microsoft Office,  etc.)
          used by any of Ebiz  and its  Subsidiaries  as an end  user.  The term
          "license"  is intended to include  "sublicense."  With respect to each
          such  license  and  agreement  required to be  identified  in the Ebiz
          Schedule  of  Exceptions,  to the best of Ebiz's or its  Subsidiaries'
          knowledge;

                    (A) such license and  agreement are legal,  valid,  binding,
               enforceable, and in full force and effect;

                    (B) such license and  agreement  will  continue to be legal,
               valid,  binding,  enforceable,  and in full  force and  effect on
               identical terms on the day immediately following the Closing;

                    (C) no party to such  license or  agreement  is in breach or
               default,  and no event has occurred which with notice or lapse of
               time would constitute a breach or default or permit  termination,
               modification, or acceleration thereunder;

                    (D) no party to such license or agreement has repudiated any
               provision thereof;

                    (E)  such  license  or  agreement  is  not  subject  to  any
               outstanding  injunction,  judgment,  order,  decree,  ruling,  or
               charge; and

                    (F) no action,  suit,  proceeding,  hearing,  investigation,
               charge,  complaint,  claim, or demand is pending or is threatened
               which challenges the legality, validity, or enforceability of the
               license or agreement.

               (iv) To the best of Ebiz's and its Subsidiaries' knowledge and to
          the  knowledge of the  directors  and  officers  (and  employees  with
          responsibility  for  Intellectual  Property  matters)  of Ebiz and its
          Subsidiaries,  neither Ebiz nor any of its Subsidiaries will infringe,
          misappropriate,  or otherwise violate any Intellectual Property rights
          of  third  parties  as a  result  of the  continued  operation  of its
          businesses  as presently  conducted  and as  presently  proposed to be
          conducted.

3.18 MANUFACTURING AND MARKETING RIGHTS.

     Except as set forth on the Ebiz  Schedule of  Exceptions,  neither Ebiz nor
any of its  Subsidiaries has granted rights to manufacture,  produce,  assemble,
license, market or sell its products to any other person and is not bound by any
agreement that affects Ebiz's or such  Subsidiary's  exclusive right to develop,
manufacture, assemble, distribute, market or sell its products.

3.19 EMPLOYEES; EMPLOYEE COMPENSATION.

     To the best of Ebiz's and its  Subsidiary's  knowledge,  the  relationships
between Ebiz and its Subsidiaries and their respective employees are good and no
labor dispute or claims are pending or threatened.  None of Ebiz's or any of its
Subsidiary's  employees  belongs to any union or collective  bargaining unit. To
the  best of  Ebiz's  and its  Subsidiaries'  knowledge,  Ebiz  and  each of its
Subsidiaries has complied in all material respects with all applicable state and
federal laws related to  employment.  To the best of Ebiz's and it  Subsidiary's
knowledge, no employee of Ebiz or any such Subsidiary is or will be in violation
of any judgment, decree or order, or any term of any employment contract, patent
disclosure   agreement,   or  other  contract  or  agreement   relating  to  the
relationship  of any such employee with Ebiz,  any of its  Subsidiaries,  or any
other  party  because  of the  nature of the  business  conducted  or  presently

                                      -15-
<PAGE>
proposed to be conducted by Ebiz or any of its Subsidiaries or to the use by the
employee of his or her best efforts with respect to such business.  Neither Ebiz
nor any of its  Subsidiaries is aware that any officer or key employee,  or that
any group of key employees,  intends to terminate their  employment with Ebiz or
any of its Subsidiaries, nor does Ebiz or any of its Subsidiaries have a present
intention  to  terminate  the  employment  of any of the  foregoing.  Subject to
general principles related to wrongful termination of employees,  the employment
of each officer and employee of Ebiz and each of its  Subsidiaries is terminable
at the will of Ebiz or such Subsidiary, as applicable.

3.20 TAX RETURNS, PAYMENTS, AND ELECTIONS.

     Ebiz and each of its  Subsidiaries  has timely  filed all tax  returns  and
reports (federal, state and local) as required by law. These returns and reports
are true and correct in all material respects. Ebiz and each of its Subsidiaries
has paid all taxes and other  assessments  due,  except those contested by it in
good faith. Neither Ebiz nor any of its Subsidiaries has elected pursuant to the
Code, to be treated as an S corporation or a collapsible corporation pursuant to
Section  1362(a)  or  Section  341(f)  of the  Code,  nor has it made any  other
elections  pursuant  to the Code  (other than  elections  that relate  solely to
methods of accounting,  depreciation or amortization) that would have a material
effect on the business, properties,  prospects or financial condition of Ebiz or
any of its  Subsidiaries.  Neither Ebiz nor any of its Subsidiaries has ever had
any tax  deficiency  proposed or assessed  against it and has not  executed  any
waiver of any statute of  limitations on the assessment or collection of any tax
or governmental  charge.  None of Ebiz's or any Subsidiary's  income tax returns
(federal or otherwise) and none of its state income or franchise tax or sales or
use tax returns has ever been audited by governmental authorities. Ebiz and each
of its Subsidiaries has made adequate provisions on its books of account for all
taxes,  assessments  and  governmental  charges  with  respect to its  business,
properties and operations for such period. Ebiz and each of its Subsidiaries has
withheld or  collected  from each  payment  made to each of its  employees,  the
amount of all taxes,  including,  but not  limited  to,  federal  income  taxes,
Federal Insurance  Contribution Act taxes and Federal Unemployment Tax Act taxes
required  to be withheld or  collected  therefrom,  and has paid the same to the
proper tax receiving officers or authorized depositaries.

3.21 ENVIRONMENTAL AND SAFETY LAWS.

     Neither Ebiz nor any of its  Subsidiaries is in violation of any applicable
statute,  law or regulation  relating to the environment or occupational  health
and  safety  except to the  extent  that the  effect  of which  would not have a
Material  Adverse  Effect on Ebiz, and no material  expenditures  are or will be
required in order to comply with any such existing statute, law or regulation.

SECTION 4. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF CALDERA SYSTEMS

     (A) Caldera  Systems  represents to Ebiz that (i) it has such knowledge and
experience  in  financial  and  business   matters  and  in  private   placement
transactions  of securities of companies in a similar  stage of  development  as
Ebiz that it is capable  of  evaluating  the merits and risks of the  investment
contemplated  by such  purchasing  party  under  this  Agreement  and  making an
informed investment  decision with respect thereto,  (ii) it is able to bear the
economic risk of such investment and can afford to sustain a substantial loss on
such investment, (iii) it is an "accredited investor" as such term is defined in
Rule  501  under  the  Securities  Act,  (iv) it is  purchasing  the  securities
purchased by it hereunder for its own account,  for investment only and not with
a view to, or any present intention of, effecting a resale or distribution of or
selling or granting any  participation  in such  securities or any part thereof,
(v) it  realizes  that  the  basis  for any  exemption  pursuant  to  which  the
securities  such  party is  purchasing  hereunder  have been  issued  may not be
present if,  notwithstanding the  representations  made by such party hereunder,

                                      -16-
<PAGE>
such party has in mind merely  acquiring the securities is purchasing  hereunder
for a fixed or determinable  period in the future,  or for a market rise, or for
sale if the  market  does not  rise  and  (vi) it does  not  have any  contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations  to such  person or to any third  person,  with  respect  to such
securities.  Caldera Systems  acknowledges  that the securities  purchased by it
hereunder  have not been  registered  under the Securities Act or the securities
laws of any  state  or other  jurisdiction  in  reliance  on an  exemption  from
registration  thereunder  and  reliance on such  exemption by the issuer of such
securities is predicated on the representations and warranties set forth in this
Agreement. Furthermore, Caldera Systems acknowledges that such securities cannot
be disposed of unless they are subsequently  registered under the Securities Act
and any  applicable  state  laws  or an  exemption  from  such  registration  is
available.

     (B)  Caldera  Systems   understands  that  the  securities  have  not  been
registered  under the Securities  Act. In particular,  Caldera  Systems is aware
that the  securities  purchased by it hereunder may not be sold pursuant to Rule
144  promulgated  under the  Securities Act unless all of the conditions of that
Rule are met.

     (C)  Caldera  Systems  represents  that  it has had an  opportunity  to ask
questions and receive  answers from Ebiz  regarding the terms and  conditions of
the offering of such  securities  and the  business,  properties,  prospects and
financial condition of Ebiz and to obtain additional  information (to the extent
Ebiz possessed such information or could acquire it without  unreasonable effort
or expense)  necessary  to verify the accuracy of any  information  furnished to
Caldera Systems or to which Caldera Systems had access. The foregoing,  however,
does not limit or modify the representations and warranties of Ebiz in Section 3
of this Agreement or the right of Caldera Systems to rely thereon.

SECTION 5. CLOSING

     5.1 CLOSING. Upon the execution of this Agreement, a Closing shall be held.
At the Closing, the following shall occur:

          (a) DELIVERIES BY CALDERA  SYSTEMS.  At the Closing,  Caldera  Systems
     shall deliver to Ebiz the following:

              (i)   An assignment or other  instrument of transfer  assigning to
                    Ebiz all of Caldera  Systems'  right,  title and interest in
                    and to the ELM Assets;

              (ii)  $3,000,000 by wire transfer to the Restricted Account;

              (iii) An executed copy of the Use Restriction Agreement;

              (iv)  An executed copy of the Investor Rights Agreement;

              (v)   An executed copy of the Shareholders Agreement;

              (vi)  An Assignment and Bill of Sale  transferring  the ELM Assets
                    to Ebiz; and

              (vii) Such other  documents and  instruments as Ebiz shall, in its
                    reasonable  discretion,  require to close and consummate the
                    transactions  contemplated  hereby;  such documents to be in
                    form  and  substance  reasonably   satisfactory  to  Caldera
                    Systems.

                                      -17-
<PAGE>
          (b) DELIVERIES BY EBIZ. At the Closing,  Ebiz shall deliver to Caldera
     Systems the following:

              (i)   A  copy  of  instructions  sent  to  Ebiz's  Transfer  Agent
                    instructing the Transfer Agent to deliver to Caldera Systems
                    share  certificates for 4,000,000 shares of the common stock
                    of  Ebiz.   Ebiz   covenants  and  agrees  that  such  share
                    certificates  will be  delivered to Caldera  Systems  within
                    seven (7) days of the Closing;

              (ii)  An executed copy of the Use Restriction Agreement;

              (iii) An executed copy of the Investor Rights Agreement;

              (iv)  An executed copy of the Shareholders  Agreement  executed by
                    Ebiz and the key  shareholders  of Ebiz who are  required to
                    execute such agreement; and

              (v)   Such other  documents  and  instruments  as Caldera  Systems
                    shall,  in its reasonable  discretion,  require to close and
                    consummate  the  transactions   contemplated   hereby;  such
                    documents   to  be  in   form   and   substance   reasonably
                    satisfactory to Ebiz.

SECTION 6. POST CLOSING COVENANTS

6.1  DEVELOPMENT OF ELM BUSINESS.

     During the twelve month period  following  the Closing,  Ebiz agrees to use
its good faith and  commercially-reasonable  efforts to develop the ELM Business
and to generate  revenue  from such  business  during the fifteen  month  period
following the Closing.

6.2  LOCATION OF ELM BUSINESS.

     In order to facilitate  the  transition  of the ELM Employees  from Caldera
Systems to Ebiz,  Ebiz agrees that during the longer of: (i) the one year period
of time following the Closing;  or (ii) until all of the funds in the Restricted
Account have been spent,  Ebiz will conduct its ELM Business  operations  in the
Utah  County,  Utah area  during  the period  specified  above and agrees not to
require  any ELM  Employee  to  transfer  out of such  area  as a  condition  of
continuing employment.

6.3  NONCOMPETE.

     For a period of three (3) years following the date hereof,  Caldera Systems
shall not: (i) directly or indirectly compete with Ebiz or any of its successors
or assigns,  with respect to any aspect of the ELM  Business;  (ii)  directly or
indirectly  engage in or conduct any business  operations the same as or similar
to the ELM  Business  or any  material  aspect  thereof;  or (iii)  directly  or
indirectly assist any person or entity in connection with any activity or matter
described  in the  immediately  preceding  clause  (i) or (ii).  Notwithstanding
anything in this Section 6.3 to the contrary,  Caldera Systems shall be entitled
to make  investments in any entity it chooses so long as in connection with such
investment  Caldera  Systems does not  actively  assist such entity in competing
with  Ebiz in the ELM  Business,  and  such  investment  shall  not be  deemed a
violation of this Agreement  unless Caldera  Systems shall acquire a controlling
interest  in such  entity.  Nothing in this  Section 6.3 shall be  construed  as
permitting Caldera Systems to infringe upon or violate any intellectual property
right of Ebiz at any  time,  whether  prior to or after the  expiration  of such

                                      -18-
<PAGE>
three (3) year period. Caldera Systems acknowledges and agrees that the terms of
this Section 6.3 are reasonable as to duration and scope and that because of the
intangible nature of most or all of the ELM Assets,  Caldera Systems  compliance
with the  provisions of this Section 6.3 is reasonably  necessary to permit Ebiz
to realize  the  benefits  intended  to be  conferred  upon it  pursuant to this
Agreement  and by the ELM Assets.  The parties  understand  and agree that money
damages  may not be a  sufficient  remedy for any breach of this  Section 6.3 by
Caldera Systems and that Ebiz shall be entitled to injunctive relief as a remedy
for any such breach.

6.4  SHAREHOLDERS AGREEMENT.

     Within twenty-one (21) days of the Closing, or seven (7) days following the
merger of Ebiz and  LinuxMall.com,  whichever shall be later,  Ebiz shall obtain
and  deliver  to Caldera  Systems an  amendment  to the  Shareholders  Agreement
whereby  shareholders holding a majority of the Ebiz voting shares following the
merger shall have agreed to be bound by the terms of the Shareholders Agreement.

SECTION 7. GENERAL

7.1  AMENDMENTS, WAIVERS AND CONSENTS.

     For the purposes of this  Agreement and all  agreements  executed  pursuant
hereto,  no course of dealing  between or among any of the parties hereto and no
delay on the part of any party  hereto in  exercising  any rights  hereunder  or
thereunder  shall  operate as a waiver of the  rights  hereof  and  thereof.  No
covenant or other  provision  hereof may be waived  otherwise  than by a written
instrument  signed by the party or  parties so waiving  such  covenant  or other
provision.  No  amendment  to this  Agreement  may be made  without  the written
consent of all of the parties hereto.

7.2  LEGEND ON SECURITIES.

     The parties  acknowledge and agree that the following legend shall be typed
on each certificate evidencing any of the securities issued hereunder:

THE SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933,  AS AMENDED (THE "ACT"),  OR ANY STATE  SECURITIES OR BLUE SKY LAWS
AND MAY NOT BE OFFERED, SOLD,  TRANSFERRED,  PLEDGED,  HYPOTHECATED OR OTHERWISE
ASSIGNED  EXCEPT (1) PURSUANT TO A  REGISTRATION  STATEMENT WITH RESPECT TO SUCH
SECURITIES  WHICH IS  EFFECTIVE  UNDER THE ACT OR (2)  PURSUANT TO AN  AVAILABLE
EXEMPTION FROM REGISTRATION  UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES
AND BLUE SKY LAWS RELATING TO THE  DISPOSITION OF  SECURITIES,  PROVIDED THAT AN
OPINION OF COUNSEL TO SUCH EFFECT IS PROVIDED TO THE ISSUER OF SUCH  SECURITIES,
IN FORM SATISFACTORY TO SUCH ISSUER, IN CONNECTION THEREWITH.

7.3  GOVERNING LAW.

     This  Agreement  shall be deemed to be a contract made under,  and shall be
construed  in  accordance  with,  the laws of the State of Utah,  as  applied to
agreements among Utah residents entered into and to be performed entirely within
Utah,  without  giving  effect to conflict of laws  principles  thereof and each
party  hereby   expressly   submits   themselves  to  the  exclusive,   personal
jurisdiction of the courts situate in the State of Utah, with respect to any and

                                      -19-
<PAGE>
all claims,  demands  and/or causes of action  asserted or filed by any party in
any way  relating to, or arising out of, this  Agreement  or the subject  matter
hereof.

7.4  SECTION HEADINGS.

     The  descriptive   headings  in  this  Agreement  have  been  inserted  for
convenience  only and  shall  not be deemed  to limit or  otherwise  affect  the
construction or interpretation of any provision thereof or hereof.

7.5  COUNTERPARTS.

     This Agreement may be executed in any number of counterparts, each of which
when so  executed  and  delivered  shall be taken  to be an  original;  but such
counterparts  shall  together  constitute  but one and the same  document.  This
Agreement may be executed by facsimile signatures,  each of which will be deemed
an original.

7.6  ENTIRE AGREEMENT.

     This Agreement,  including the exhibits, documents and instruments referred
to herein or therein, constitutes the entire agreement, and supersedes all other
prior  agreements and  understandings,  both written and oral, among the parties
with respect to the subject matter hereof.

7.7  SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS

     The warranties,  representations  and covenants of Ebiz and Caldera Systems
contained in or made pursuant to this Agreement  shall survive the execution and
delivery of this Agreement and the Closing.

7.8  SUCCESSORS AND ASSIGNS.

     Except as  otherwise  provided  herein,  the terms and  conditions  of this
Agreement  shall  inure to the  benefit  of and be binding  upon the  respective
successors and assigns of the parties  (including  permitted  transferees of any
securities issued hereunder).  Nothing in this Agreement, express or implied, is
intended  to  confer  upon any  party  other  than the  parties  hereto or their
respective  successors  and  assigns  any  rights,   remedies,   obligations  or
liabilities under or by reason of this Agreement,  except as expressly  provided
in this Agreement.

7.9  NOTICES.

     Unless otherwise provided, all notices and other communications required or
permitted under this Agreement shall be in writing and shall be mailed by United
States  first-class  mail,  postage  prepaid,  sent by  facsimile  or  delivered
personally by hand or by a nationally  recognized courier addressed to the party
to be notified at the address or facsimile  number  indicated for such person at
the address set forth below,  or at such other  address or  facsimile  number as
such party may designate by ten (10) days' advance  written  notice to the other
parties hereto:

         If to Caldera Systems:        Caldera Systems, Inc.
                                       240 West Center Street
                                       Orem, Utah 84057
                                       Attention: President

                                      -20-
<PAGE>

                       with a copy to:

                                       Caldera Systems, Inc.
                                       240 West Center Street
                                       Orem, Utah 84057
                                       Attention: Richard Rife, General Counsel

         If to Ebiz:                   Ebiz Enterprises Inc.
                                       15695 North 83rd Way
                                       Scottsdale, AZ  85260
                                       Attn: Jeffrey I. Rassas
                                             David Shaw
                                       Fax: 480-778-1001

                       with copies to:

                                       Thomas J. Morgan
                                       Lewis and Roca LLP
                                       40 North Central Avenue
                                       Phoenix, Arizona 85004
                                       Fax: 602-734-3911

                                       David H. Little Holme
                                       Roberts & Owen, LLP 111
                                       East  Broadway, Suite 1100
                                       Salt Lake City, Utah 84111
                                       Fax: 801-521-9639

All such notices and other written communications shall be effective on the date
of mailing, confirmed facsimile transfer or delivery.

7.10 ATTORNEYS' FEES.

     If any action at law or in equity is necessary to enforce or interpret  the
terms of this Agreement, the prevailing party shall be entitled to be reimbursed
by  the  non-prevailing   party  for  reasonable   attorneys'  fees,  costs  and
disbursements,  in  addition  to any  other  relief to which  such  party may be
entitled.

7.11 SEVERABILITY.

     If one or more  provisions of this  Agreement are held to be  unenforceable
under  applicable  law, such provision shall be excluded from this Agreement and
the balance of the Agreement  shall be  interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.

SECTION 8 DEFINITIONS

     For the purposes of this Agreement,  each of the following terms shall have
the meaning set forth opposite such term below:

                                      -21-
<PAGE>
     "ELM Business" means a web-based business to business (b2b) entity creating
revenue  through  information/knowledge   exchange,  product  sales  commission,
advertising, membership and channel development fees.

     "knowledge"  of a person  shall mean actual  knowledge of such person after
(i) with respect to  representations,  warranties and statements made by or with
respect to Caldera  Systems,  inquiry of the officers  and  directors of Caldera
Systems  and  those  management-level  employees  of  Caldera  Systems  who have
responsibility for the area of inquiry and (ii) with respect to representations,
warranties  and  statements  made by or with  respect  to  Ebiz  inquiry  of the
officers and directors of Ebiz and those management-level  employees of Ebiz who
have responsibility for the area of inquiry.

     "Intellectual  Property" shall mean (a) all inventions  (whether patentable
or  unpatentable  and  whether or not  reduced to  practice),  all  improvements
thereto, and all patents, patent applications, and patent disclosures,  together
with   all   reissuances,   continuations,   continuations-in-part,   revisions,
extensions, and reexaminations thereof, (b) all trademarks, service marks, trade
dress, logos, trade names, and corporate names,  together with all translations,
adaptations,  derivations,  and combinations  thereof and including all goodwill
associated  therewith,  and all  applications,  registrations,  and  renewals in
connection  therewith,  (c) all  copyrightable  works,  all copyrights,  and all
applications,  registrations, and renewals in connection therewith, (d) all mask
works and all applications, registrations, and renewals in connection therewith,
(e) all trade secrets and confidential  business  information  (including ideas,
research and development,  know-how, formulas,  compositions,  manufacturing and
production  processes  and  techniques,   technical  data,  designs,   drawings,
specifications,  customer and supplier lists, pricing and cost information,  and
business  and  marketing  plans  and  proposals),   (f)  all  computer  software
(including data and related  documentation),  (g) all other proprietary  rights,
and (h) all  copies  and  tangible  embodiments  thereof  (in  whatever  form or
medium).

     "Subsidiary"  shall mean any corporation  with respect to which a specified
party (or a Subsidiary  thereof)  owns a majority of the common stock or has the
power to vote or direct the voting of sufficient  securities to elect a majority
of the directors.  "Subsidiaries"  shall mean,  for purposes of this  Agreement,
each Subsidiary of a party, collectively and individually.

                                      -22-
<PAGE>
     IN WITNESS  WHEREOF,  the parties  have caused  this  Agreement  to be duly
executed and  delivered by their proper and duly  authorized  officers as of the
day and year first above written.

                                        Ebiz Enterprises Inc.
                                        a Nevada corporation

                                        By: /s/ Jeffrey I. Rassas
                                            ------------------------------------
                                        Its: Chief Executive Officer
                                             -----------------------------------

                                        Caldera Systems, Inc.,
                                        a Delaware corporation

                                        By: /s/ Ransom H. Love
                                            ------------------------------------
                                        Its: Chief Executive Officer
                                             -----------------------------------

                                      -23-
<PAGE>
                              SCHEDULE OF EXHIBITS

Exhibit A      Description of ELM Assets

Exhibit B      ELM Business Operations

Exhibit C      Use Restriction Agreement

Exhibit D      Investor Rights Agreement

Exhibit E      Shareholders Agreement

Exhibit F      List of ELM Employees and Compensation
<PAGE>
                                    EXHIBIT A

                                   ELM ASSETS

         The Elm Assets consist of the following:

1. All of Caldera  Systems' right,  title and interest in the ideas and concepts
which it has developed to the date of this  Agreement  which are part of the ELM
Business  concept which Caldera  Systems is transferring to Ebiz pursuant to the
Agreement.

2. All of the personal  property  described on Schedule I,  attached  hereto and
made a part hereof.INVESTOR RIGHTS AGREEMENT

     THIS INVESTOR  RIGHTS  AGREEMENT (the  "Agreement"),  dated the 15th day of
September,  2000, by and between Ebiz  Enterprises,  Inc., a Nevada  corporation
(the  "Company"),  and  Caldera  Systems,  Inc.,  a  Delaware  corporation  (the
"Holder").

                                   WITNESSETH

     WHEREAS, concurrently with the execution of this Agreement, the Company and
the Holder  have  entered  into a Purchase  and Sale  Agreement  (the  "Purchase
Agreement")  pursuant  to the terms of which  the  Company  has  agreed to issue
certain shares of its common stock (as more  particularly  defined  herein,  the
"Shares"), to the Holder; and

     WHEREAS,  as a condition to the  effectiveness  of the  obligations  of the
Company and the Holder pursuant to the Purchase  Agreement,  the Company and the
Holder have agreed to enter into this Agreement.

     NOW, THEREFORE, the parties hereto agree as follows:

          1.  DEFINITIONS.  For purposes of this Agreement,  the following terms
     shall have the following respective meanings:

               a.  "Commission"  shall mean the  United  States  Securities  and
          Exchange   Commission  or  any  other  Federal   agency  at  the  time
          administering the Securities Act.

               b. The terms "register", "registered" and "registration" refer to
          a  registration  effected  by  preparing  and  filing  a  registration
          statement or similar  document in compliance  with the Securities Act,
          and the declaration or ordering of effectiveness of such  registration
          statement or document by the Commission.

               c. The term "Registrable  Stock" means all Shares that are issued
          or to be issued to the Holder  pursuant  to the terms of the  Purchase
          Agreement  and any  Common  Stock  issued  as (or  issuable  upon  the
          conversion or exercise of any warrant,  right or other  security which
          is issued as) a dividend or other  distribution  with respect to or in
          exchange for or in replacement  of, such Shares or any preferred stock
          of the  Company  granted to the Holder  pursuant  to the terms of this
          Agreement or the Purchase Agreement; PROVIDED, HOWEVER, that shares of
          Registrable Stock shall cease to be Registrable Stock if they are sold
          or  transferred  pursuant  to a  registered  public  offering or other
          transaction  which does not  result in  restrictions  on resale  being
          imposed on the transfer by virtue of Federal or state securities laws.

               d. "Common Stock" means the common stock of the Company.

               e. "Securities  Act" shall mean the United States  Securities Act
          of  1933,  as  amended,  or any  successor  or other  similar  Federal
          statute,  and the rules and  regulations of the Commission  thereunder
          and the forms prescribed  thereby,  all as the same shall be in effect
          at the time.  "Exchange  Act" shall mean the United States  Securities
          Exchange Act of 1934,  as amended,  or any  successor or other similar
          Federal  statute,  and the rules  and  regulations  of the  Commission
          thereunder and the forms prescribed thereby,  all as the same shall be
          in effect at the time.

                                       1
<PAGE>
               f. "Shares"  means all the shares of Common Stock or other shares
          of capital  stock of the  Company  which are issued or to be issued to
          the Holder  pursuant to the terms of the  Purchase  Agreement  or this
          Agreement.

          2. REPRESENTATIONS AND WARRANTIES, ETC.

               a. The Holder  hereby  represents  and warrants to, and covenants
          with, the Company that:

                    (i) The Holder will not sell,  transfer or otherwise dispose
               of the Shares, except upon the conditions specified herein, which
               conditions are intended to ensure  compliance with the provisions
               of the Securities Act.

                    (ii) The  Holder  understands  and agrees  with the  Company
               that,  except as set forth in and  subject to the  provisions  of
               this Agreement:

                         (A) The Company is under no  obligation to register the
                    sale, transfer or other disposition of the Shares or to take
                    any other  action  necessary  in order to make an  exemption
                    from registration  available to the Holder, except to remain
                    current in its reporting  obligations under the Exchange Act
                    (if applicable).

                         (B)  Stop  transfer  instructions  will be given to the
                    transfer agent with respect to the Shares.

                    (iii)  The  Holder   acknowledges   that  the   certificates
               representing  the Shares,  and any  substitutions or replacements
               thereof, shall bear a legend in substantially the following form:

               THE  SECURITIES  REPRESENTED  BY THIS  CERTIFICATE  HAVE NOT BEEN
               REGISTERED  PURSUANT TO THE SECURITIES  ACT OF 1933,  (THE "ACT")
               AND HAVE BEEN TAKEN FOR  INVESTMENT  PURPOSES ONLY AND NOT WITH A
               VIEW TO THE  DISTRIBUTION  THEREOF,  AND SUCH  SECURITIES  OR ANY
               INTEREST  THEREIN  MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT (A)
               PURSUANT TO AN EFFECTIVE  REGISTRATION  STATEMENT UNDER SUCH ACT,
               OR (B) PURSUANT TO AN AVAILABLE EXEMPTION.

               b. CERTAIN OTHER  MATTERS.  It is understood  and agreed that the
          stop transfer  instructions  referred to above will be removed as to a
          particular  Share or  block of  Shares  if (i) a  distribution  by the
          Holder of such Shares has been registered  under the Securities Act or
          (ii) permitted under the provisions of Rule 144(k)  promulgated  under
          the Securities  Act (as then in effect).  The Company hereby agrees to
          remain  current in its reporting  requirements  under the Exchange Act
          (if applicable).  The Company agrees,  upon the request of the Holder,
          to make available to the Holder and to any  prospective  transferee of
          the  Registrable  Shares of the  Holder,  information  concerning  the
          Company described in Rule 144A(d)(4) of the Securities Act.

                                       2
<PAGE>
          3. DEMAND REGISTRATION.

               a. Upon the written request of the Holder, the Holder may request
          that the Company  effect the  registration  on Form S-1 or Form S-2 of
          all  or  part  of its  Registrable  Stock  under  the  Securities  Act
          (provided   that  the  number  of  Shares  to  be   included  in  such
          registration  is at least  $1,000,000 in then current  market value of
          such  Shares)  and in such  request,  the Holder  shall state the then
          intended  method of  disposition  by the Holder.  The Company shall as
          soon as possible  use  diligent  best efforts to prepare and file with
          the  Commission a  registration  statement  and such other  documents,
          including an amended or supplemented  prospectus,  as may be necessary
          to permit a public offering and sale of such Registrable  Stock in the
          United States in compliance with the provisions of the Securities Act,
          all to the extent  required to permit the  disposition  (in accordance
          with the intended  methods  thereof as aforesaid) by the Holder of the
          Registrable  Stock to be so  registered.  If such sale of  Registrable
          Stock  is to be  pursuant  to an  underwritten  public  offering,  the
          underwriter shall be selected by the Holder. The Company shall only be
          required to effect two registrations pursuant to this Section 3.

               b. The Company  shall not be required to effect any  registration
          under Section 3(a): (i) prior to six months following the date of this
          Agreement;  or (ii) (A) within nine months after the completion of any
          public  offering  of its  securities  pursuant to which the Holder was
          afforded the right to register as many shares of its Registrable Stock
          as requested or (B) within six months after any other public  offering
          by the Company.

               c. The Company shall have the right to include in a  registration
          statement  or  post-effective  amendment to a  registration  statement
          filed pursuant to this Section 3 other  securities of the Company then
          proposed to be distributed, except that, to the extent consistent with
          the rights of other holders of the Company's securities, if and to the
          extent that the underwriter or underwriters  acting in connection with
          any public offering pursuant to such registration statement reasonably
          determine  that  the  inclusion  of  any  such  other  securities  may
          substantially  prejudice or hinder the offering of Registrable  Stock,
          the number of such  other  securities  shall be reduced or  eliminated
          prior to any reduction in the number of shares of Registrable Stock to
          be so registered and offered.

               d. If, at any time prior to the effectiveness of the registration
          statement  filed in  connection  with such  registration,  the Company
          furnishes to the Holder a certificate  signed by the President that in
          the good faith  judgment of the Board of  Directors  of the Company it
          would be seriously  detrimental to the Company and its stockholders to
          effect such  registration  at such  scheduled time and it is therefore
          essential  to defer the  filing of such  registration  statement,  the
          Company  may, by delivery of written  notice to the Holder,  delay the
          registration of such Registrable Stock for up to 90 days, provided the
          Company may not use this right more than once in any 12 month period.

          4. INCIDENTAL REGISTRATION.

               If, at any time,  the  Company  proposes  to  register  shares of
          Common Stock or securities  convertible into or exercisable for Common
          Stock under the  Securities Act (other than pursuant to a registration
          statement  on Form  S-4 or S-8 or any  successor  form,  or  filed  in
          connection with an exchange offer or an offering of securities  solely
          to the existing shareholders or employees of the Company), whether for
          sale  for its own  account  or for the  account  of any  other  person
          holding  registration  rights with  respect to the  securities  of the
          Company,  then the Company shall give written  notice of such proposed
          registration to the Holder at least thirty days before the anticipated
          filing date of such registration statement which notice shall describe

                                       3
<PAGE>
          the material terms of the proposed registration, and such notice shall
          offer the Holder the  opportunity to register such number of shares of
          Registrable   Stock  as  the  Holder  may  request.   As  promptly  as
          practicable  (but no later than 15 days) after the  provision  of such
          notice, the Holder shall so notify the Company,  and the Company shall
          use  diligent  best  efforts  to cause  the  managing  underwriter  or
          underwriters of any proposed  underwritten  offering  pursuant to such
          registration  statement  to permit  such to include  such  Registrable
          Stock in such offering on the same terms and conditions as any similar
          securities of the Company included therein; PROVIDED, HOWEVER, that if
          the managing  underwriter or  underwriters of any such public offering
          delivers an opinion to the Holder that the total amount of Registrable
          Stock which the Holder  proposes to include in the offering when added
          to the  securities  being sold by the Company and any other persons or
          entities,  in any such public  offering,  is such as to materially and
          adversely  affect the  success of any such public  offering,  then the
          amount of  Registrable  Stock to be  offered  for the  account  of the
          Holder  proposed to be included in any such public  offering  shall be
          reduced or limited to the extent  necessary to reduce the total amount
          of Registrable Stock to be included in any such public offering to the
          amount  recommended by such managing  underwriter,  provided,  no such
          reduction may reduce the amount of Registrable Stock being sold by the
          Holder to less than the lesser of:  (i)  twenty  percent  (20%) of the
          shares being sold in such offering by entities  other than the Company
          or entities exercising demand registration  rights; or (ii) the number
          of Shares  requested  to be  registered  by the Holder.  If the Holder
          disapproves  of the  terms of any such  underwriting,  it may elect to
          withdraw  therefrom by written  notice to the Company and the managing
          underwriter.   Any   securities   excluded  or  withdrawn   from  such
          underwriting shall be withdrawn from such registration,  and shall not
          be  transferred  in a public  distribution  prior to ninety  (90) days
          after  the  effective  date  of the  registration  statement  relating
          thereto.  Notwithstanding the foregoing,  if, at any time after giving
          written  notice of its  intention  to register  Common  Stock or other
          securities  convertible into or exercisable for Common Stock and prior
          to the effectiveness of the registration statement filed in connection
          with such  registration,  the Company determines for any reason either
          not to effect such  registration  or to delay such  registration,  the
          Company  may, at its  election,  by delivery of written  notice to the
          Holder, (i) in the case of a determination not to effect registration,
          relieve itself of its obligations to register any Registrable Stock in
          connection  with  such  registration,   or  (ii)  in  the  case  of  a
          determination  to delay such  registration,  delay the registration of
          such  Registrable  Stock  for the  same  period  as the  delay  in the
          registration of such other shares of Common Stock or other  securities
          convertible  into or exercisable for Common Stock.  The Company agrees
          that it shall not grant incidental or "piggyback"  registration rights
          superior  to those  held by the  Holder,  without  the  consent of the
          Holder.

          5. REGISTRATION ON FORM S-3; TERMINATION.

               a. If the Holder  requests  that the Company file a  registration
          statement on Form S-3 (or any successor form to Form S-3) for a public
          offering  of  shares  of  the   Registrable   Stock,   the  reasonably
          anticipated  aggregate  offering price to the public of which,  net of
          underwriting  discounts and commissions would exceed $500,000, and the
          Company  is a  registrant  entitled  to use Form S-3 to  register  the
          Registrable Stock for such an offering, the Company shall use diligent
          best efforts to cause such Registrable  Stock to be registered for the
          offering on such form; PROVIDED,  HOWEVER,  that the Company shall not
          be required to effect more than one (1) registration  pursuant to this
          Section 5 in any twelve (12) month period. The Company will as soon as
          possible  use its diligent  best  efforts to effect such  registration
          (including,  without  limitation,  the execution of an  undertaking to
          file  post-effective   amendments,   appropriate  qualification  under
          applicable  blue sky or other state  securities  laws and  appropriate
          compliance with applicable regulations issued under the Securities Act
          and any other  governmental  requirements or regulations) as may be so

                                       4
<PAGE>
          requested and as would permit or facilitate the sale and  distribution
          of all or such portion of such  Registrable  Stock as are specified in
          such  request.  The  substantive  provisions  of  Section  6 shall  be
          applicable to each registration initiated under this Section 5.

               b.  Notwithstanding  the  foregoing,  the  Company  shall  not be
          obligated  to  take  any  action  pursuant  to  Section  5(a)  (i) not
          permitted by the  Commission;  (ii) in any particular  jurisdiction in
          which the Company  would be  required to execute a general  consent to
          service of process in effecting such  registration,  qualification  or
          compliance  unless the  Company is already  subject to service in such
          jurisdiction  and except as may be  required  by the  Securities  Act;
          (iii) during the period  starting  with the date sixty (60) days prior
          to the filing of, and ending on the  earlier of (x) one year after the
          date sixty (60) days prior to the Company's  date of filing of, or (y)
          a date six (6) months  following the effective date of, a registration
          statement  (other  than  with  respect  to  a  registration  statement
          relating to a Rule 145 transaction, an offering solely to employees or
          any other  registration  which is not appropriate for the registration
          of  Registrable  Securities),  PROVIDED  that the  Company is actively
          employing  diligent best efforts to cause such registration  statement
          to become  effective;  or (iv) if the  Company  shall  furnish  to the
          Holder a certificate  signed by the  President of the Company  stating
          that, in the good faith judgment of the Company's  Board of Directors,
          it would be seriously  detrimental to the Company or its  shareholders
          for a registration  statement to be filed in the near future, then the
          Company's   obligation   to  use  diligent  best  efforts  to  file  a
          registration  statement  shall be deferred  for a period not to exceed
          sixty  (60)  days  after  the  receipt  of the  request  to file  such
          registration by the Holder provided, that the Company may not use this
          right more than once in any 12 month period.

               c. The  Holder's  rights  pursuant  to  Sections 3, 4 and 5 above
          shall  expire (a) on the date when all of the  Registrable  Securities
          held by such  Holder  may be sold in a single  ninety  (90) day period
          pursuant  to Rule 144 under the 1933 Act; or (b) upon the date that is
          seven years after the effective date of this Agreement.

          6. OBLIGATIONS OF THE COMPANY.  Whenever required under this Agreement
     to effect the registration of any Registrable  Stock, the Company shall, as
     expeditiously as is possible:

               a. Prepare and file with the Commission a registration  statement
          or  post-effective  amendment with respect to such  Registrable  Stock
          that complies with the  requirements of the Securities Act and use its
          diligent  best  efforts  to  cause  such  registration   statement  or
          post-effective  amendment to become and,  during the  distribution  of
          such Registrable Stock, to remain effective;  PROVIDED,  HOWEVER, that
          such registration  statement or post-effective  amendment shall not be
          required to remain effective for a period of more than twelve months.

               b.  Prepare  and file with the  Commission  such  amendments  and
          supplements  to such  registration  statement and  prospectus  used in
          connection  with  such  registration  statement  and any and all  such
          documents  as may be  necessary  to keep such  registration  statement
          effective during the  distribution of such Registrable  Stock (subject
          to the  proviso  in  subsection  (a)  above)  and to  comply  with the
          provisions of the  Securities  Act with respect to the  disposition of
          all   securities   covered   by   such   registration   statement   or
          post-effective  amendment  thereto  and  to  cause  such  registration
          statement to become and remain  (subject to the proviso in  subsection
          (a) above) effective under the Securities Act.

               c.  Furnish  to  the  Holder  such  numbers  of  copies  of  such
          registration statement and the form of prospectus included therein and
          any  amendments  or  supplements  thereto,   including  a  preliminary
          prospectus, in conformity with the requirements of the Securities Act,

                                       5
<PAGE>
          and such other documents as the Holder may reasonably request in order
          to facilitate the disposition of Registrable Stock owned by the Holder
          thereof in compliance with all applicable laws and regulations.

               d.  Use  its  best  efforts  to  (i)  register  and  qualify  the
          Registrable  Stock covered by such  registration  statement under such
          other   securities   or  blue  sky  or  other  similar  laws  of  such
          jurisdictions as shall be reasonably requested by the Holder, and (ii)
          to keep  such  registration  or  qualification  effective  during  the
          distribution of such securities  (subject to the proviso in subsection
          (a)  above);  and do any and all other  acts and things  necessary  or
          desirable to enable the Holder to consummate  the  disposition  of the
          Registrable Stock;  provided that the Company shall not be required in
          connection  therewith  or as a  condition  thereto  to  qualify  to do
          business  or to file a general  consent  to  service of process in any
          such  states  or  jurisdictions.  Anything  in this  Agreement  to the
          contrary  notwithstanding with respect to the bearing of expenses,  if
          any  jurisdiction  in which the  securities  shall be qualified  shall
          require that expenses incurred in connection with the qualification of
          the securities in that jurisdiction be borne by selling  shareholders,
          then such expenses shall be payable by the Holder of Registrable Stock
          to the extent required by such jurisdiction.

               e. In the event of any underwritten  public offering,  enter into
          and perform  its  obligations  under an  underwriting  agreement  with
          respect  to such  offering,  in usual  and  customary  form,  with the
          managing  underwriter  of such  offering.  The Holder shall also enter
          into and perform its respective obligations under such an agreement.

               f. Notify the Holder during any period that a prospectus relating
          to  Registrable  Stock  covered  by  such  registration  statement  is
          required to be delivered  under the Securities Act of the happening of
          any event or the existence of any  circumstances  as a result of which
          the prospectus  included in such  registration  statement,  as then in
          effect,  includes an untrue  statement of a material  fact or omits to
          state a material  fact  required to be stated  therein or necessary to
          make  the  statements  therein  not  misleading  in the  light  of the
          circumstances then existing.

               g. Furnish to the Holder,  on the date that shares of Registrable
          Stock are delivered to the  underwriters for sale in connection with a
          registration pursuant to this Agreement,  if such securities are being
          sold by or through underwriters, or, on the date that the registration
          statement with respect to such securities  becomes  effective,  (i) an
          opinion,  dated such date, of counsel representing the Company for the
          purposes of such registration, in form and substance as is customarily
          given to underwriters in an underwritten public offering, addressed to
          the  underwriters,  if any,  and to the Holder and (ii) a letter dated
          such date, from the independent  certified  public  accountants of the
          Company,  in form and substance as is customarily given by independent
          certified public accountants to underwriters in an underwritten public
          offering, addressed to the underwriters, and to the Holder.

          7. FURNISH  INFORMATION.  The Holder shall furnish to the Company such
     reasonable information regarding the Holder, the Registrable Stock, and the
     intended  method of disposition  of such  securities as shall be reasonably
     requested by the Company to effect the registration of Registrable Stock as
     to which the Holder has requested registration.

          8. EXPENSES OF  REGISTRATION.  All expenses  incident to the Company's
     performance  of  or  compliance  with  this  Agreement  including,  without
     limitation,  all  registration  and  filing  fees,  fees  and  expenses  of
     complying with the state  securities or blue sky laws,  printing  expenses,
     listing fees, fees of the National Association of Securities Dealers, Inc.,
     transfer taxes, fees of transfer agents,  registrars and depositories,  and
     fees and disbursements of counsel for the Company and of independent public

                                       6
<PAGE>
     accountants  (including  the expense of any special  audit),  but excluding
     underwriting commissions and discounts of any such underwriter and the fees
     and disbursements of counsel for the Holder, shall be borne by the Company.
     The Holder shall bear all underwriting  commissions and discounts  incurred
     in  connection  with any  offering of  Registrable  Stock with respect to a
     registration  pursuant  to  this  Agreement,   as  well  as  its  fees  and
     disbursements  of counsel if the Holder has counsel  separate  from counsel
     for the Company.

          9.  INDEMNIFICATION  AND  CONTRIBUTION.  In the  event  any  shares of
     Registrable  Stock are included in a registration  statement under Sections
     3, 4, and 5 hereof:

               a. To the extent permitted by law, the Company will indemnify and
          hold  harmless the Holder,  each of its directors and officers and any
          underwriter  (to the extent provided in any  underwriting  agreement),
          any  other  person  or  entity  selling   Registrable  stock  in  such
          registration statement,  and each director and officer of, any person,
          if any, who controls the Holder or any such  underwriter or such other
          person or entity  within  the  meaning  of the  Securities  Act or the
          Exchange Act, against any losses, claims, damages,  liabilities (joint
          or  several)  or  expenses  (including  legal  fees) to which they may
          become  subject  under the  Securities  Act, the Exchange Act or other
          federal  or  state  law,  insofar  as such  losses,  claims,  damages,
          liabilities  or expenses (or actions in respect  thereof) arise out of
          or are  based  upon  any of the  following  statements,  omissions  or
          violations  (collectively a "Violation"):  (i) any untrue statement or
          alleged  untrue  statement  of  a  material  fact  contained  in  such
          registration statement,  including any preliminary prospectus or final
          prospectus contained therein or any amendments or supplements thereto,
          (ii) the omission or alleged omission to state therein a material fact
          required to be stated  therein,  or necessary  to make the  statements
          therein not misleading, or (iii) any violation or alleged violation by
          the Company of the  Securities  Act, the Exchange  Act, any federal or
          state  securities  or other  similar  law or any  rule or  regulations
          promulgated  under the Securities Act, the Exchange Act or any federal
          or state securities or other similar law; PROVIDED,  HOWEVER, that the
          indemnity  agreement  contained in this subsection  shall not apply to
          amounts paid in settlement of any such loss, claim, damage, liability,
          or action if such  settlement  is effected  without the consent of the
          Company (which consent shall not be unreasonably withheld),  nor shall
          the  Company  be liable to the  Holder or any other  person  described
          above as an  indemnitee  in any such  case for any such  loss,  claim,
          damage, liability, or action to the extent that it arises out of or is
          based upon a Violation which occurs in reliance upon and in conformity
          with written  information  furnished  expressly  for use in connection
          with  such  registration  by, or which  results  from the bad faith or
          gross  negligence of, the Holder,  any  underwriter for the Company or
          controlling person of the Holder.

               b. To the extent  permitted by law, the Holder will indemnify and
          hold harmless the Company,  each of its  directors,  and its officers,
          each person,  if any,  who controls the Company  within the meaning of
          the Securities  Act, any  underwriter  (to the extent  provided in any
          underwriting agreement), any other person or entity selling securities
          in such registration statement,  and each director and officer of, any
          person,  if any, who controls such underwriter or such other person or
          entity,  against any losses,  claims,  damages,  liabilities (joint or
          several)  or expenses  (including  legal fees) to which the Company or
          any such  director,  officer,  controlling  person,  or underwriter or
          controlling  person,  or such  other  person or  entity  or  director,
          officer or controlling person may become subject, under the Securities
          Act, the Exchange Act or other  federal or state law,  insofar as such
          losses,  claims,  damages,  liabilities  or  expenses  (or  actions in
          respect thereto) arise out of or are based upon any Violation, in each
          case to the extent (and only to the extent) that such Violation occurs
          in reliance upon and in conformity with written information  furnished
          by the  Holder  expressly  for use and used in any  such  registration
          statement,  and in connection with such  registration of securities of

                                       7
<PAGE>
          the Holder pursuant to this Agreement or results from the bad faith or
          gross  negligence of the Holder,  or any underwriter for the Holder in
          connection with any such  registration;  PROVIDED,  HOWEVER,  that the
          indemnity  agreement  contained in this subsection (b) shall not apply
          to  amounts  paid in  settlement  of any  such  loss,  claim,  damage,
          liability or action if such settlement is effected without the consent
          of the Holder, which consent shall not be unreasonably  withheld,  and
          provided further,  that the obligations of the Holder shall be limited
          to an amount  equal to the  proceeds to the Holder of the  Registrable
          Stock sold in connection with such registration.

               c.  Promptly  after  receipt by an  indemnified  party under this
          Section of notice of the  commencement  of any action  (including  any
          governmental  action),  such  indemnified  party will  deliver to each
          indemnifying  party a written notice of the  commencement  thereof and
          the indemnifying party shall have the right to participate in, and, to
          the extent the indemnifying  party so desires,  jointly with any other
          indemnifying party similarly  notified,  to assume the defense thereof
          with counsel  mutually  satisfactory  to the parties.  An  indemnified
          party  shall have the right to retain its own  counsel;  however,  the
          fees and expenses of such counsel  shall be borne by such  indemnified
          party,  unless   representation  of  such  indemnified  party  by  the
          indemnifying  party's counsel would be inappropriate  due to actual or
          potential conflicts of interest. The failure to deliver written notice
          to the indemnifying party within a reasonable time of the commencement
          of any such  action,  if  prejudicial  to its  ability to defend  such
          action,  shall relieve such indemnifying party of any liability to the
          indemnified  party under this Section,  but the omission so to deliver
          written  notice to the  indemnifying  party will not relieve it of any
          liability  that it may have to any  indemnified  party  otherwise than
          under this Section.

               d. If an indemnification  event shall occur that is indemnifiable
          under  subsections  (a) and (b) of this Section,  and both the Company
          and the  Holder  have  indemnifiable  liability  therefore,  then each
          indemnifying  party shall  contribute to the amount paid or payable by
          such  indemnified  party as a result of any losses,  claims,  damages,
          liabilities  or  expenses  (including  legal  fees) or actions in such
          proportion  as is  appropriate  to reflect the  relative  fault of the
          Company,  on the one hand, and the Holder, on the other, in connection
          with the  statements  or  omissions  which  resulted  in such  losses,
          claims,  damages,  liabilities  or  expenses or actions as well as any
          other relevant equitable considerations, including the failure to give
          the notice required under such  subsections.  The relative fault shall
          be determined by reference to, among other things,  whether the untrue
          or alleged untrue  statement of a material fact relates to information
          supplied by the Company on the one hand,  or the Holder,  on the other
          hand,  and  the  parties'  relative  intent,   knowledge,   access  to
          information  and  opportunity  to correct or prevent such statement or
          omission.  The Company and the Holder  agree that it would not be just
          and equitable if  contribution  pursuant to this  subsection  (d) were
          determined by PRO RATA allocation or by any other method of allocation
          which did not take account of the equitable considerations referred to
          above  in  this   subsection.   No   person   guilty   of   fraudulent
          misrepresentations  (within  the  meaning  of  Section  11(f)  of  the
          Securities Act), shall be entitled to contribution from any person who
          is not guilty of such fraudulent misrepresentation.

               e. The  obligations  of the  Company and the Holder or Holders of
          Registrable  Stock under this Section shall survive the  completion of
          any offering of Registrable  Stock in a registration  statement  under
          this Agreement.

          10.  SUCCESSORS AND ASSIGNS.  The registration  rights provided herein
     may be  transferred  by the Holder,  provided that (a) the Company is given
     written  notice  thereof,  (b) the  transfer  (i) is in  connection  with a
     transfer  of all  securities  of the Company  held by the  Holder,  or (ii)
     involves a transfer of at least  200,000  shares of  Registrable  Stock (as

                                       8
<PAGE>
     appropriately  adjusted  for stock  splits  and the  like),  or (iii) is to
     constituent partners or shareholders of the Holder who agree to act through
     a single representative and (c) the transferee enters into a counterpart of
     this  Agreement  and  agrees  to be bound by the  provisions  hereof.  This
     Agreement  shall inure to the benefit of and be enforceable at any time and
     from  time to time by any  Holder  or  Holders  of any  Registrable  Stock,
     whether  so  expressed  in  this  Agreement  or  not,   provided  that  the
     termination of registration  rights in respect of any shares of Registrable
     Stock by reason of the terms of this  Agreement  shall be binding  upon any
     transferee of such shares,  and, in the event such  termination  applies to
     only a portion of the shares of  Registrable  Stock at the time held by any
     Holder thereof, in the absence of contrary agreement between the Holder and
     any  transferee  of such shares,  upon the transfer of less than all of the
     shares by the Holder after such  termination,  such termination shall apply
     PRO RATA to the  shares  so  transferred  and the  shares  retained  by the
     Holder, or any subsequent  transferee.  Upon the request of any the Holder,
     the  Company  will  confirm in writing to any  transferee  of the  Holder's
     Registrable  Stock the  Company's  continuing  obligation  to  afford  such
     transferee  the  benefits  of the  Company's  covenants  contained  in this
     Agreement,  but no failure of the Company to confirm such obligations shall
     in any way impair such transferee's rights under this Agreement.

          11.  AMENDMENTS AND WAIVERS.  This  Agreement may be amended,  and the
     Company may take any action  herein  prohibited  or omit to perform any act
     herein  required to be  performed  by it,  only if the  Company  shall have
     obtained the written  consent of each Holder to such  amendment,  action or
     omission to act. Any amendment to this Agreement shall be in writing signed
     by all the parties hereto.

          12. NOMINEES FOR BENEFICIAL  OWNERS. In the event that any Registrable
     Stock is held by a nominee for the beneficial owner thereof, the beneficial
     owner  thereof  may,  at its  election,  be  treated  as the Holder of such
     Registrable Stock for purposes of any request or other action by the Holder
     pursuant to this Investor Rights Agreement.  If the beneficial owner of any
     Registrable Stock elects to be treated as the Holder for such purposes, the
     Company  may  require  assurances  reasonably  satisfactory  to it of  such
     owner's beneficial ownership of such Registrable Stock.

          13. RIGHT TO PARTICIPATE IN CERTAIN SALES OF ADDITIONAL Securities.

               (a) The Company  agrees that it will not sell or issue any shares
          of capital stock of the Company, or other securities  convertible into
          or exchangeable for capital stock of the Company, or options, warrants
          or rights carrying any rights to purchase capital stock of the Company
          (the "Offered  Securities")  unless the Company first submits  written
          notice (the "Preemptive  Rights Notice") to the Holder identifying the
          terms of the  proposed  sale  (including  price,  number or  aggregate
          principal  amount of securities  and all other  material  terms),  and
          offers  to the  Holder  the  opportunity  to  purchase  its  Pro  Rata
          Allotment  (as  hereinafter  defined) of the  securities  on terms and
          conditions,  including  price,  not less favorable than those on which
          the  Company  proposes  to sell such  securities  to a third  party or
          parties.  The  Company's  offer to the Holder  shall  remain  open and
          irrevocable  for a period of thirty  (30) days  during  which time the
          Holder may accept such offer by written notice to the Company  setting
          forth the maximum number of shares or other securities to be purchased
          by the Holder.  Any  securities  so offered which are not purchased by
          the Holder pursuant to such offer may be sold by the Company, but only
          on the terms and  conditions  set  forth in the  initial  offer to the
          Holder at any time within 120 days  following the  termination  of the
          above-referenced  30-day  period.  The  closing  of  the  sale  of the
          securities  to the Holder  shall be subject to the closing of the sale
          of the remaining Offered  Securities.  For purposes of this Agreement,
          the Holder's  Pro Rata  Allotment  with respect to Offered  Securities
          shall be equal to the total number of such Offered Securities proposed
          to be issued by the Company multiplied by a fraction, the numerator of
          which is the number of Shares  (determined  on an  as-converted  basis
          into the Company's Common Stock) owned by the Holder immediately prior

                                       9
<PAGE>
          to the issuance of such Offered  Securities,  and the  denominator  of
          which is the  total  number of  Shares  of  Common  Stock  outstanding
          immediately prior to the issuance of such Offered Securities.

               (b) Notwithstanding the foregoing, the right to purchase shall be
          inapplicable  with respect to any issuance or proposed issuance by the
          Company of (i) shares of Common Stock  issued to officers,  directors,
          employees  or  consultants  of the  Company  pursuant  to any  Company
          incentive  plan or upon the exercise of options or other rights issued
          to such officers, directors,  employees or consultants pursuant to any
          Company  incentive  plan or any successor  plan  thereto,  (ii) Common
          Stock issued upon  conversion  of any preferred  stock or  convertible
          debentures issued by the Company,  and existing as of the date of this
          Agreement,  (iii)  securities  as a result of any stock  split,  stock
          dividend,  reclassification  or reorganization of the Company's stock,
          and (iv)  Common  Stock  issued  upon  conversion  of any  options  or
          warrants existing as of the date of this Agreement.

               (c) The  rights of the  Holder  set forth in this  Section 13 are
          transferable  to each  transferee  of Shares of  capital  stock of the
          Company  hereunder.  Each such  subsequent  holder of such Shares must
          consent  in writing  to be bound by the terms and  conditions  of this
          Agreement in order to acquire the rights granted hereunder.

          14. INFORMATION AND PROTECTIVE COVENANTS.

               (a) The Company will maintain a comparative system of accounts in
          accordance with generally accepted  accounting  principles,  keep full
          and complete financial records and furnish to the Holder the following
          reports: (i) within 120 days after the end of each fiscal year, a copy
          of the consolidated balance sheet of the Company as at the end of such
          year,  together with a  consolidated  statement of income and retained
          earnings  of the  Company  for such year,  audited  and  certified  by
          independent  public   accountants  of  recognized   national  standing
          reasonably  satisfactory  to the Holder,  prepared in accordance  with
          generally accepted accounting  principles  consistently  applied; (ii)
          within  45 days  after  the end of each  quarter  commencing  with the
          quarter  ending  December 31, 2000, a consolidated  unaudited  balance
          sheet of the Company as at the end of such quarter and a  consolidated
          unaudited  statement of income and  retained  earnings for the Company
          for such quarter and for the year to date;  (iii) within 30 days after
          the end of each month  commencing  with the month  ending  October 31,
          2000, a consolidated  unaudited balance sheet of the Company as at the
          end of such month and an  unaudited  statement  of income and retained
          earnings for the Company for such month and for the year to date, each
          of the foregoing  balance sheets and statements of income and retained
          earnings to set forth in comparative  form the  corresponding  figures
          for the prior  fiscal  period  and the  fiscal  year end budget and to
          include a brief written  discussion and analysis by management of such
          annual financial statements; and (iv) such other financial information
          as the Holder may reasonably request,  including,  without limitation,
          certificates  of  the  principal  financial  officer  of  the  Company
          concerning  compliance  with the  covenants of the Company  under this
          Section 14.

               (b) All  transactions by and between the Company and any officer,
          employee,   director  or   stockholder   of  the  Company  or  persons
          controlling,  controlled  by, under  common  control with or otherwise
          affiliated with such officer, employee,  director or stockholder shall
          be  conducted  on an  arm's-length  basis,  and  shall be on terms and
          conditions  no less  favorable  to the Company  than could be obtained
          from nonrelated persons.

               (c) The Company  shall,  upon the written  request of the Holder,
          provide to the Holder and to any prospective  institutional transferee
          of any shares  designated  by the  Holder,  such  financial  and other

                                       10
<PAGE>
          information  as is  available to the Company or can be obtained by the
          Company  without  material  expense and as such Holder may  reasonably
          determine  is  required  to permit  such  transfer  to comply with the
          requirements of Rule 144A promulgated under the Act.

               (d) The  Company  will  ensure  that  meetings  of the  Board  of
          Directors  are held at least twice each year at  intervals of not more
          than six  months.  The  Company  shall  pay such  Directors  for their
          reasonable travel and other reasonable expenses incurred in connection
          with attending such meetings.  The Company's Articles of Incorporation
          and By-Laws will provide for  exculpation and  indemnification  of the
          directors  and  limitations  on the  liability of the directors to the
          fullest extent permitted under applicable state law.

               (e) The  Company  will  furnish to the  Holder,  upon  reasonable
          notice,  reasonable  information  regarding  its business  and, at all
          reasonable  times during the Company's  normal business hours and upon
          reasonable notice and as often as the Holder shall reasonably request,
          permit any authorized representative designated by the Holder to visit
          and inspect  any of its  properties,  including  its books and records
          (and to make  copies and  extracts  therefrom),  and to discuss  their
          affairs, finances and accounts with their officers.

               (f) The  Company  agrees that it will not enter into or amend any
          agreement,  contract, commitment or understanding which would restrict
          or prohibit the  exercise by the Holder of any of the Holder's  rights
          under this  Agreement  or any of the other  documents,  agreements  or
          instruments contemplated hereunder.

          15.  CONVERSION TO PREFERRED  STOCK. If, at any time after the date of
     this  Agreement,  the Company shall issue any series of preferred  stock to
     any person or entity,  then the Holder shall  immediately have the right to
     elect to  convert  all or any part of its  shares of the  Company's  common
     stock into  shares of  preferred  stock of the same  series and on the same
     terms and conditions as the Company  proposes to issue  preferred  stock to
     any other person or entity. The Company shall give the Holder not less than
     30 days advance  notice prior to the time that it shall issue any preferred
     stock to any party  and the  Holders  may at any time  during  such  30-day
     period  elect to convert  all or any  portion of its Shares  into shares of
     preferred stock upon the terms and conditions which the Company proposes to
     issue preferred stock to any other person or entity.  This right shall be a
     continuing  right in the  Holder and shall  apply to all  future  series of
     preferred  shares which the Company proposes to issue so long as the Holder
     shall own any of the shares issued or to be issued in  connection  with the
     Purchase  Agreement.  For purposes of the  conversion,  the Holder's shares
     shall be valued  based upon the fair market value of the  Company's  common
     stock at the time of the  issuance of the  preferred  stock into which such
     shares will be converted.

          16.  NOTICES.  Notices and other  communications  under this Agreement
     shall be in writing and shall be sent by registered mail,  postage prepaid,
     addressed

               a. If to the Holder, at the address shown on the stock or warrant
          transfer  books of the  Company  unless  the Holder  has  advised  the
          Company in writing of a different address as to which notices shall be
          sent under this Investor Rights Agreement, and

               b. If to the  Company,  at  15695  North  83rd  Way,  Scottsdale,
          Arizona  85260 to the  attention  of the  President,  or to such other
          address as the Company shall have furnished to each Holder.

               Any such  notices  of  change  in  address  of any  Holder or the
          Company shall be given in accordance with this Agreement.

                                       11
<PAGE>
          17. MISCELLANEOUS.

               a. ENTIRE AGREEMENT.  This Agreement,  together with the Purchase
          Agreement and the other agreements and documents contemplated thereby,
          embodies the entire  agreement and  understanding  between the Company
          and the other parties hereto with respect to the subject matter hereof
          and supersedes all prior and contemporaneous agreements, negotiations,
          correspondence,   undertakings,   communications   and  understandings
          relating to the subject matter hereof.

               b. GOVERNING  LAW. This  Agreement and all questions  relating to
          its validity,  interpretation,  performance and  enforcement  shall be
          construed in accordance with Utah law.

               c.  HEADINGS.  The headings in this Agreement are for purposes of
          reference  only and shall not limit or  otherwise  affect the  meaning
          hereof.

               d. COUNTERPARTS.  This Agreement may be executed in any number of
          counterparts,  each of which shall be an original, with the same force
          and effect as if the signatures  thereto and hereto were upon the same
          instrument.  This  Agreement  shall become  effective  when each party
          hereto shall have  received  counterparts  hereof  signed by the other
          parties hereto;  provided,  however, that the Company's agreement with
          each of the Holders in this  Agreement is a separate  agreement and is
          not  contingent  upon the  execution  hereof  by other  parties.  This
          Agreement may be executed by facsimile signatures,  each of which will
          be deemed an original.

               e.  ATTORNEYS'  FEES.  In  the  event  that  any  action,   suit,
          litigation,  arbitration,  or proceeding is brought by any party under
          this Agreement to enforce or construe any of the terms, the party that
          prevails by enforcing this Agreement shall be entitled to recover,  in
          addition to all other  amounts and relief,  its  reasonable  costs and
          attorneys'  fees  incurred  in  connection  with  such  action,  suit,
          litigation, arbitration, claim or proceeding.

                                       12
<PAGE>
     IN WITNESS  WHEREOF,  the parties have caused this Agreement to be executed
and delivered by their respective  officers  thereunto duly authorized as of the
date first above written.

                                        Ebiz Enterprises Inc.
                                        a Nevada corporation

                                        By: /s/ Jeffrey I. Rassas
                                            ------------------------------------
                                        Its: Chief Executive Officer
                                             -----------------------------------

                                        Caldera Systems, Inc.,
                                        a Delaware corporation

                                        By: /s/ Ransom H. Love
                                            ------------------------------------
                                        Its: Chief Executive Officer
                                             -----------------------------------

                                       13

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