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                                                                    Exhibit 10.4

                                                                    Confidential

                          SECURITIES PURCHASE AGREEMENT

      SECURITIES PURCHASE AGREEMENT (this "Agreement") entered into as of
March 28, 2000, by and between RTS Wireless, Inc., a Delaware corporation
(the "Company"), and America Online, Inc., a Delaware corporation (the
"Purchaser"). Certain capitalized terms used in this Agreement are defined
in Exhibit A attached hereto.

                                    Recitals

      The Company is a developer, manufacturer and provider of software that
enables Internet- and corporate intranet-based information content and services
to be delivered to wireless devices (the "Business").

      The Company desires to raise capital to finance its business operations
and in furtherance thereof desires to issue and sell to the Purchaser the
securities specified herein, and the Purchaser is willing to acquire such
securities, all on the terms and subject to the conditions set forth in this
Agreement.

                                    Agreement

      In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereto mutually agree as follows:

      1. Authorization and Sale of the Preferred Shares.

            1.1 Authorization. The Company has authorized the issuance and sale
pursuant to the terms and conditions hereof of 5,000 shares (the "Preferred
Shares") of its Series A Preferred Stock, par value $.01 per share (the "Series
A Preferred Stock"), having the rights, restrictions, privileges and preferences
set forth in the Certificate of Designation attached hereto as Exhibit B (the
"Certificate of Designation").

            1.2 Issuance and Sale. On the terms and subject to the conditions
hereof, at the Closing, the Company will issue and sell to the Purchaser, and
the

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Purchaser will purchase from the Company, the Preferred Shares, at a purchase
price of $1,000.00 per share, or an aggregate purchase price of $5,000,000 (the
"Purchase Price").

            1.3 Stockholder Rights. The Purchaser shall have the rights
specified in the Investors Rights Agreement attached as Exhibit C hereto.

      2. Closing.

            2.1 Closing. The closing (the "Closing") of the sale and purchase of
the Preferred Shares under this Agreement shall take place at the offices of
Arnold & Porter, 555 Twelfth Street, N.W., Washington DC at 10:00 a.m. on
March 28, 2000 or at such other time, date and place as are mutually agreeable
to the Company and the Purchaser. The date of the Closing is hereinafter
referred to as the "Closing Date."

            2.2 Deliveries. At the Closing, the Company will deliver to the
Purchaser certificates registered in the Purchaser's name representing the
aggregate number of Preferred Shares issued and sold by the Company to the
Purchaser, as determined pursuant to Section 1.2 above, and the Purchaser will
deliver to the Company the Purchase Price by wire transfer thereof to the
Company Account. The parties shall also deliver all documents required to be
delivered at the Closing pursuant to Section 2.3 hereof.

            2.3 Conditions to Closing.

                  (a) Conditions to Obligations of the Purchaser. The
obligations of the Purchaser to purchase Preferred Shares at the Closing are
subject to the fulfillment on or prior to the Closing Date of the following
conditions, any of which may be waived by the Purchaser:

                        (i) Representations and Warranties Correct; Performance
of Obligations. The representations and warranties made by the Company in
Section 3 hereof shall have been true and correct in all material respects when
made, and shall be true and correct in all material respects on the Closing Date
with the same force and effect as if they had been made on and as of such date,
and the Company shall have performed all obligations, covenants and agreements
herein required to be performed by it on or prior to the Closing.

                        (ii) Consents and Waivers. The Company shall have
obtained any and all consents (including all governmental or regulatory
consents, approvals or authorizations required in connection with the valid
execution, delivery and performance of this Agreement and the Related
Agreements), permits and waivers necessary or appropriate for consummation of
the transactions contemplated by this Agreement or any Related Agreement.

                        (iii) Related Agreements. Each of the Related Agreements
shall have been executed and delivered by the Company.

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                        (iv) Certificate of Designation. The Certificate of
Designation shall have been filed with the Delaware Secretary of State and a
certified copy thereof shall have been delivered to the Purchaser.

                        (v) Compliance Certificate. The Company shall have
delivered to the Purchaser a certificate, executed by the President and Chief
Financial Officer of the Company, dated as of the Closing Date, certifying the
fulfillment of the conditions specified in subsections (a)(i) and (ii) of this
Section 2.3.

                        (vi) Secretary's Certificate. The Company shall have
delivered to the Purchaser a certificate, executed by the Secretary of the
Company, dated as of the Closing Date, certifying the authenticity of attached
copies of the Certificate of Designation, the Company's Certificate of
Incorporation, the Company's Bylaws and resolutions of the Board of Directors of
the Company approving the transactions contemplated hereby.

                        (vii) Opinions of Company's Counsel. The Purchaser shall
have received from Parker Chapin LLP an opinion, dated the date of the Closing,
substantially in the form attached hereto as Exhibit D.

                        (viii) Other Documents. The Purchaser shall have
received such other certificates and documents as it shall have reasonably
requested.

                  (b) Conditions to Obligations of the Company. The Company's
obligation to issue and sell the Preferred Shares at the Closing is subject to
the fulfillment on or prior to the Closing Date of the following conditions, any
of which may be waived by the Company:

                        (i) Representations and Warranties. The representations
and warranties made by the Purchaser in Section 4 hereof shall have been true
and correct when made, and shall be true and correct on such Closing Date with
the same force and effect as if they had been made on and as of such date.

                        (ii) Related Agreements. Each of the Related Agreements
shall have been executed and delivered by the Purchaser.

      3. Representations and Warranties Relating to the Company and its
Subsidiaries. Except as otherwise set forth in the Disclosure Schedule attached
hereto as Exhibit E (the "Company Disclosure Schedule"), the Company represents
and warrants to the Purchaser as set forth below. For purposes of this Section
3, "Company" shall mean the Company and all of its subsidiary and affiliated
corporations or business entities.

            3.1 Organization and Good Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Company has full corporate power and authority to carry
on its business

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as now conducted and as it is proposed to be conducted, and is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
nature of its business or properties makes such qualification or licensing
necessary, except where the failure to so qualify or be licensed would not have
a Material Adverse Effect. The Company is the successor by merger to Real Time
Strategies, Inc., a New York corporation (the "Predecessor"); the merger of the
Predecessor with and into the Company was effective on March 16, 2000.
References in any representation contained in this Section 3 to the Company and
its business and assets include, where appropriate, references to the
Predecessor and its business and assets as well as references to the business
and assets of the subsidiary referred to in Section 3.6 of the Company
Disclosure Schedule.

            3.2 Capital Structure. As of the date hereof, the authorized capital
stock of the Company consists of the following shares, and all of the issued and
outstanding shares as hereinafter set forth have been duly authorized and
validly issued, are fully paid and nonassessable and have been offered, issued,
sold and delivered by the Company in compliance with all applicable federal and
state securities laws:

                  (a) Preferred Stock. There are a total of 1,000,000 authorized
shares of the Company's Preferred Stock, $.01 par value (the "Preferred Stock"),
of which 5,000 shares have been designated as Series A Preferred Stock. There
are no shares of Preferred Stock issued and outstanding prior to the
consummation of the transactions contemplated hereby.

                  (b) Common Stock. There are a total of 250,000,000 authorized
shares of the Company's common stock, par value $.01 per share ("Common Stock").
The issued and outstanding shares of Common Stock are as set forth on Section
3.2(b) of the Company Disclosure Schedule.

                  (c) Options, Warrants, Reserved Shares, Treasury Stock.
Section 3.2(c) of the Company Disclosure Schedule sets forth a list of options,
warrants, rights (including conversion or preemptive rights) and agreements for
the purchase or acquisition from the Company of any shares of the Company's
capital stock or any securities convertible into or ultimately exchangeable or
exercisable for any shares of the Company's capital stock, including any
obligation on the part of the Company in any manner to issue any shares of its
capital stock or other securities. Except as expressly set forth in Section
3.2(c) of the Company Disclosure Schedule, none of the Company's outstanding
capital stock, or stock issuable upon exercise or exchange of any outstanding
options, warrants or rights, is subject to any preemptive rights, rights of
first refusal or other rights to purchase such stock (whether in favor of the
Company or any other person), pursuant to any agreement or commitment of the
Company. The Company holds no shares of its capital stock in its treasury.

                  (d) Security Holders. Section 3.2(d) of the Company Disclosure
Schedule contains a complete and accurate list of the names of all current
stockholders of the Company and all current holders of outstanding warrants,
options, or other rights ultimately exchangeable, exercisable or convertible for
or into capital stock,

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segregated by the type of security held by each such holder and setting forth
the amount of such security held by such holder and, in the case of securities,
exchangeable, exercisable or convertible into Common Stock, the amount of Common
Stock into which such securities are exchangeable, exercisable or convertible.

            3.3 Power, Authorization and Validity. The Company has the corporate
power, legal capacity and corporate authority to enter into and perform its
obligations under this Agreement and each of the Related Agreements. The
execution, delivery and performance by the Company of this Agreement and each of
the Related Agreements have been duly and validly approved and authorized by all
necessary corporate action on its part. No authorization, consent, or approval,
governmental or otherwise, is necessary to enable the Company to enter into this
Agreement or any of the Related Agreements and to perform its obligations
hereunder or thereunder. This Agreement is, and each of the Related Agreements
when executed and delivered by the Company will be, the valid and binding
obligations of the Company, enforceable in accordance with their respective
terms.

            3.4 No Violation of Existing Agreements. Neither the execution and
delivery of this Agreement or any Related Agreement nor the consummation of the
transactions or performance of the Company's obligations contemplated hereby or
thereby will conflict with, result in a material breach or violation of, or
cause a default under, any provision of the Company's Certificate of
Incorporation or Bylaws, each as is currently in effect, any instrument,
contract or agreement that is material to the business of the Company or any
judgment, writ, decree, order, law, statute, ordinance, rule or regulation
applicable to the Company.

            3.5 Representations Regarding Preferred Shares and Conversion
Shares. All corporate action has been taken on the part of the Company, its
officers, directors and shareholders necessary for the authorization and
creation, issuance and delivery of the Preferred Shares and the Conversion
Shares. The Preferred Shares and the Conversion Shares when issued in compliance
with the provisions of this Agreement and the Certificate of Designation, will
be validly issued, fully paid and nonassessable and, assuming the accuracy of
each of the Purchaser's representations in Section 4 of this Agreement, issued
in compliance with all applicable federal and state securities laws. None of the
Preferred Shares issued pursuant to this Agreement, and none of the Conversion
Shares, are subject to any preemptive rights, rights of first refusal, or other
rights to purchase such stock (whether in favor of the Company or any other
person), pursuant to any agreement or commitment of the Company.

            3.6 Subsidiary. Except as set forth in Section 3.6 of the Company
Disclosure Schedule, the Company does not own of record or beneficially any
capital stock or equity interest or investment in any corporation, association,
partnership, limited partnership, limited liability company, trust or other
entity.

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            3.7 Financial Statements.

                  (a) The Company's unaudited consolidated balance sheets as of
the end of December 31, 1998 and 1999 and unaudited consolidated statements of
operations, unaudited consolidated statements of equity (deficit) and unaudited
consolidated statements of cash flows for the years ended December 31, 1997,
1998 and 1999, including the notes thereto (collectively the "Company Financial
Statements"), all of which are attached to the Company Disclosure Schedule, have
been prepared in all material respects in accordance with GAAP. The Company
Financial Statements have been prepared in accordance with the books and records
of the Company and present fairly in all material respects the financial
position, results of operations, equity transactions and cash flows of the
Company as of and for the periods ending on their dates in accordance with GAAP.
Except and to the extent reflected or reserved against in the Company Financial
Statements, the Company does not have, as of the dates of the Company Financial
Statements, any material liabilities or obligations (absolute or contingent) of
a nature required to be or customarily reflected in a balance sheet (or the
notes thereto) prepared in accordance with GAAP. The reserves, if any, reflected
on the Company Financial Statements are adequate in all material respects in
light of the contingencies with respect to which they are made.

                  (b) Except as may be disclosed in Section 3.8 of the Company
Disclosure Schedule, the Company has no material debts, liabilities or
obligations of any nature, whether accrued, absolute, contingent, or otherwise,
and whether due or to become due, that are not reflected or reserved against in
the Company Financial Statements.

            3.8 Absence of Certain Changes and Events. Except as set forth in
Schedule 3.8 of the Company Disclosure Schedule, since December 31, 1999, the
Company has not:

                  (a) suffered any Material Adverse Change;

                  (b) suffered any damage, destruction or loss, whether or not
covered by insurance, in an amount in excess of $25,000;

                  (c) granted or agreed to make any increase in the compensation
payable or to become payable by the Company to any of its officers or employees,
except for normal raises for nonexecutive personnel made in the ordinary course
of business that are usual and normal in amount;

                  (d) declared, set aside or paid any dividend or made any other
distribution on or in respect of the shares of capital stock of the Company or
declared or agreed to any direct or indirect redemption, retirement, purchase or
other acquisition by the Company of such shares;

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                  (e) issued any shares of capital stock of the Company or any
warrants, rights, options or entered into any commitment relating to the shares
of capital stock of the Company;

                  (f) made any material change in the accounting methods or
practices it follows, whether for general financial or tax purposes, or any
change in depreciation or amortization policies or rates adopted therein;

                  (g) sold, leased, abandoned or otherwise disposed of any real
property or any machinery, equipment or other operating property other than in
the ordinary course of its business;

                  (h) sold, assigned, transferred, licensed or otherwise
disposed of any patent, trademark, trade name, brand name, copyright (or pending
application for any patent, trademark or copyright), invention, work of
authorship, process, know-how, formula or trade secret or interest thereunder or
other intangible asset except in the ordinary course of its business;

                  (i) been involved in any dispute involving any employee that
would reasonably be expected to result in a Material Adverse Change;

                  (j) entered into any commitment or transaction (including
without limitation any borrowing or capital expenditure) that requires the
Company to pay an aggregate amount in excess of $250,000;

                  (k) incurred any material liabilities, either contingent or
otherwise, matured or unmatured (whether or not required to be reflected in
financial statements in accordance with GAAP, and whether due or to become due),
except for accounts payable or accrued salaries that have been incurred by the
Company since the end of the last fiscal year, in the ordinary course of its
business and consistent with the Company's past practices;

                  (1) permitted or allowed any of its material property or
assets to be subjected to any mortgage, deed of trust, pledge, lien, security
interest or other encumbrance of any kind, except those permitted under Section
3.9 hereof, other than any purchase money security interests incurred in the
ordinary course of its business;

                  (m) made any capital expenditure or commitment for additions
to property, plant or equipment individually in excess of $50,000, or in the
aggregate in excess of $250,000;

                  (n) paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets to, or entered into any agreement
or arrangement with any of its affiliates within the meaning of the rules and
regulations promulgated under the Securities Act of 1933 ("Affiliates"),
officers, directors or

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shareholders or, to the Company's knowledge, any Affiliate or associate of any
of the foregoing;

                  (o) made any amendment to or terminated any agreement that, if
not so amended or terminated, would be material to the business, assets,
liabilities, operations or financial performance of the Company;

                  (p) entered into any agreement in contemplation of the
transactions specified herein other than this Agreement and the Related
Agreements; or

                  (q) agreed to take any action described in this Section 3.8 or
outside of the ordinary course of its business or which would constitute a
breach of any of the representations or warranties contained in this Agreement.

            3.9 Title to Property and Assets. Except as set forth in Section 3.9
of the Company Disclosure Schedule, the Company owns and possesses its
properties and assets that are material to its business free and clear of all
mortgages, deeds of trust, liens, encumbrances, security interests and claims
except as reflected in the Company Financial Statements and except for statutory
liens for the payment of current taxes that are not yet delinquent and liens,
encumbrances and security interests that arise in the ordinary course of its
business and do not affect material properties and assets of the Company. With
respect to the property and assets it leases that are material to its business,
the Company is in compliance with such leases in all material respects. The
Company holds valid leasehold interests to its material leased properties and
assets free of any liens, encumbrances or security interests of any party other
than the lessors of such property and assets. The Company's properties and
assets are in all material respects in good operating condition and repair.

            3.10 Proprietary Assets.

                  (a) Section 3.10(a)(i) of the Company Disclosure Schedule sets
forth, with respect to each Proprietary Asset of the Company registered with or
issued by any Governmental Body or for which an application has been filed with
any Governmental Body, (i) a brief description of such Proprietary Asset, and
(ii) the names of the jurisdictions covered by the applicable registration or
application or in which the Proprietary Asset has been issued. Section
3.10(a)(ii) of the Company Disclosure Schedule identifies and provides a brief
description of each Proprietary Asset licensed to the Company by any Person
(other than software licenses that are relating to unmodified commercial
computer software that is generally available in the ordinary course of
business), and identifies the license agreement under which such Proprietary
Asset is being licensed to the Company. The Company has good and marketable
title to all material Proprietary Assets used in or necessary for its business
as currently conducted and as proposed to be conducted, free and clear of all
material liens and other encumbrances, except for third party rights licensed to
it, as to which the Company has a valid right to use such Proprietary Assets
(all of the foregoing are referred to herein as the "Company Proprietary
Rights"). The Company is not obligated to make any material

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payment to any Person for the use of any Proprietary Asset. The Company has not
developed jointly with any other Person any Proprietary Asset with respect to
which such other Person has any rights or the Company has any obligations.

                  (b) The Company has taken all reasonable measures and
precautions necessary to protect and maintain the confidentiality and secrecy of
all its Proprietary Assets (except trademarks, issued patents and other
Proprietary Assets similarly known to the public and Proprietary Assets whose
value would be materially unimpaired by public disclosure) and otherwise to
maintain and protect the value of all its Proprietary Assets.

                  (c) Except where such infringement, misappropriation or
unlawful use, would not and could not reasonably be expected to be material in
impact or amount, either individually or in the aggregate, the Company is not
infringing, misappropriating or making any unlawful use of, and the Company has
not at any time, infringed, misappropriated or made any unlawful use of, any
Proprietary Asset owned or used by any other Person. No claims or notices (in
writing or otherwise) with respect to Proprietary Assets have been communicated
to the Company: (i) to the effect that the manufacture, sale, license or use of
any Proprietary Asset or product, practice of any process or provision of any
service as now made, sold, practiced, used or provided or currently offered or
proposed by the Company infringes or potentially infringes, or constitutes a
misappropriation or unlawful use of any copyright, patent, trade secret or other
intellectual property right of a third party, or (ii) challenging the ownership
or validity of any of the Company's rights to or interest in such Proprietary
Assets. The Company has received no notice to the effect that any patents or
registered trademarks, service marks or registered copyrights held by the
Company are invalid or not subsisting except for failures to be valid and
subsisting that would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company. To the Company's knowledge,
no other Person is infringing, misappropriating or making any unlawful use of,
and no Proprietary Asset owned or used by any other Person infringes or
conflicts with, any Proprietary Asset used in or pertaining to the business of
the Company.

                  (d) The Company owns or has the right to use by license all
Proprietary Assets necessary, in the Company's reasonable judgment, to enable
the Company to conduct its business in the manner in which such business has
been and is being conducted. The Company has not licensed any of its Proprietary
Assets to any Person on an exclusive basis and the Company has not entered into
any covenant not to compete or contract limiting its ability to exploit fully
any of its Proprietary Assets or to transact business in any market or
geographical area or with any Person.

            3.11 Contracts.

                  (a) Section 3.11(a) of the Company Disclosure Schedule
identifies each material license agreement, development agreement, manufacturing
agreement, distribution agreement or other agreement to which the Company is a
party.

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                  (b) Except as set forth in Section 3.11(b) of the Company
Disclosures Schedule:

                        (i) The Company has no agreements, contracts or
commitments that call for prospective fixed and/or contingent payments or
expenditures by or to the Company of more than $50,000 other than those entered
into in the ordinary course of its business concerning the sale of the Company's
products;

                        (ii) The Company has no purchase agreement, contract or
commitment that calls for fixed and/or contingent payments by the Company that
are in excess of the normal, ordinary and usual requirements of the Company's
business;

                        (iii) There is no outstanding sales contract, commitment
or proposal (including, without limitation, development projects) of the Company
that is reasonably likely to result, either individually or in the aggregate, in
any Material Adverse Change to the Company upon completion or performance
thereof;

                        (iv) The Company has no outstanding agreements,
contracts or commitments with officers, employees, agents, consultants,
advisors, salesmen, sales representatives, distributors or dealers that are not
cancelable by it on notice of not longer than thirty days and without liability,
penalty or premium exceeding $50,000 in any single instance or $75,000 in the
aggregate;

                        (v) The Company has not entered into any employment,
independent contractor or similar agreement, contract or commitment that is not
terminable on not more than thirty days' notice without penalty or liability of
any type, including without limitation severance or termination pay;

                        (vi) The Company has no collective bargaining or union
agreements, contracts or commitments;

                        (vii) The Company is not restricted by agreement from
competing with any person, from carrying on its business anywhere in the world
or otherwise operating its business in any manner it deems appropriate;

                        (viii) The Company has not guaranteed any obligations of
other Persons or made any agreements to acquire or guarantee any obligations of
other Persons; and

                        (ix) The Company has no outstanding loan or advance to
any Person; nor is it party to any line of credit, standby financing, revolving
credit or other similar financing arrangement of any sort that would permit the
borrowing by the Company of any sum not reflected in the Company Financial
Statements.

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                  (c) The Company has delivered to the Purchaser accurate and
complete copies of all written contracts identified in Section 3.11(a) and (b)
of the Company Disclosure Schedule, including all amendments thereto. Sections
3.11(a) and (b) of the Company Disclosure Schedule contain a complete list of
all the material contracts to which the Company is a party. The Company has not
entered into any material oral contracts. Each contract identified in Sections
3.11(a) and (b) of the Company Disclosure Schedule (a "Company Material
Contract") is valid and in full force and effect, is enforceable by the Company
in accordance with its terms, subject to (i) laws of general application
relating to insolvency and the relief of debtors and (ii) rules of law governing
specific performance, injunctive relief and other equitable remedies, and will
continue to be so immediately following the Closing Date. No such contract,
agreement or instrument contains any liquidated damages, penalty or similar
provision. To the Company's knowledge, no party to any such contract, agreement
or instrument intends to cancel, withdraw, modify or amend such contract,
agreement or instrument.

                  (d) (i) The Company has not violated or breached, or committed
any default under, any Company Material Contract in any material respect, and,
to the Company's knowledge, no other Person has violated or breached, or
committed any default under, any Company Material Contract in any material
respect; and

                        (ii) to the Company's knowledge, no event has occurred,
and no circumstance or condition exists, that (with or without notice or lapse
of time) will, or could reasonably be expected to, (A) result in a material
violation or breach of any of the provisions of any Company Material Contract,
(B) give any Person the right to declare a default or exercise any remedy under
any Company Material Contract, (C) give any Person the right to accelerate the
maturity or performance of any Company Material Contract or (D) give any Person
the right to cancel, terminate or modify any Company Material Contract.

                  (e) None of the Company Material Contracts contains any
provision which would require the consent of third parties to the sale and
issuance of the Preferred Shares or any of the other transactions as
contemplated hereunder or under any of the Related Agreements or which would be
altered as a result of such transaction.

            3.12 Registration Rights. Except as provided in the Investors Rights
Agreement, the Company has not granted or agreed to grant to any person or
entity any rights (including piggyback registration rights) to have any
securities of the Company registered with the U.S. Securities and Exchange
Commission or any other governmental authority.

            3.13 Taxes.

            (a) The Company has fully and timely, properly and accurately filed
all tax returns and reports required to be filed by it, including all federal,
foreign, state and local tax returns and estimates for all years and periods
(and portions thereof)

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for which any such returns, reports or estimates were due. All such returns,
reports and estimates were prepared in the manner required by applicable law in
all material respects. All income, sales, use, occupation, property or other
taxes or assessments due from the Company prior to the Closing Date have been
paid or will be paid on or before the Closing Date. There are no pending
assessments, asserted deficiencies or claims for additional taxes that have not
been paid. The reserves for taxes, if any, reflected on the Company Financial
Statements are adequate in all material respects, and there are no material tax
liens on any property or assets of the Company (other than liens for taxes not
yet due and payable). There have been no audits or examinations of any tax
returns or reports of the Company by any Governmental Body. No state of facts
exists or has existed which would constitute grounds for the assessment of any
penalty or any further tax liability in a material amount, either individually
or in the aggregate, beyond that shown on the respective tax reports, returns or
estimates. There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any federal, foreign, state or
local tax return or report for any period.

                  (b) All material taxes that the Company has been required to
collect or withhold have been duly withheld or collected and, to the extent
required, have been paid to the proper taxing authority.

                  (c) The Company is not a party to any tax-sharing agreement or
similar arrangement with any other Person.

                  (d) At no time has the Company been included in the federal
consolidated income tax return of any affiliated group of corporations.

                  (e) The Company is not currently under any contractual
obligation to pay to any Governmental Body any tax obligations of, or with
respect to any transaction relating to, any other Person or to indemnify any
other Person with respect to any tax, other than pursuant to this Agreement.

            3.14 Employees. The Company is not a party to any collective
bargaining agreements and, to its knowledge, there are no attempts to organize
the employees of the Company. Section 3.14 of the Company Disclosure Schedule
lists all material employee benefit plans and programs of the Company. Copies of
any of the foregoing plans, programs, contracts, arrangements or understandings
have been made available to the Purchaser or its counsel. To the knowledge of
the Company, no employee of the Company is subject to any judgment, decree or
order of any court or administrative agency, or any other restriction that would
materially interfere with the use of his or her best efforts to carry out his or
her duties for the Company or that would conflict with the Company's business as
currently conducted. The Company has received no written notice from any former
employer that an employee of the Company has prior obligations to a former
employer that would interfere or conflict with such employee's ability to
perform his or her intended services for the Company. To the Company's
knowledge, no employee or advisor of the Company is or is now expected to be in
violation of any term of any employment contract, disclosure agreement,
proprietary

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information and inventions agreement or any other contract or agreement or any
restrictive covenant or any other common law obligation to a former employer
relating to the right of any such employee to be employed by the Company because
of the nature of the business conducted or to be conducted by the Company or to
the use of trade secrets or proprietary information of others, and the
employment of the Company's employees does not subject the Company or the
Company's shareholders to any liability. There is neither pending nor, to the
Company's knowledge, threatened any actions, suits, proceedings or claims, or,
to its knowledge, any basis therefor or threat thereof with respect to any
contract, agreement, covenant or obligation referred to in the preceding
sentence.

            3.15 Insurance. The Company maintains and keeps in force with good
and responsible insurance companies fire, public liability, property damage and
other insurance in such amounts and with such coverage or risks as are customary
for similar businesses and adequate to the needs of the Company. The Company
Disclosure Schedule sets forth a list of such insurance, stating the name and
address of the insurance provider and the amount of insurance. The Company has
not done anything, either by way of action or inaction, that would reasonably be
expected to invalidate any of its insurance policies as a whole or in part.

            3.16 Compliance with Environmental Requirements. The Company has
obtained all material permits, licenses and other authorizations which are
required under federal, foreign, state and local laws applicable to the Company
and relating to pollution or protection of the environment, including laws or
provisions relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, or hazardous or toxic materials, substances, or wastes
into air, surface water, groundwater, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or hazardous or toxic
materials, substances, or wastes. The Company is in material compliance with all
terms and conditions of the required permits, licenses and authorizations. The
Company is not aware of, nor has the Company received written notice of, any
conditions, circumstances, activities, practices, incidents, or actions which
might reasonably form the basis of a claim, action, suit, proceeding, hearing,
or investigation of, by, against or relating to the Company, based on or related
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge, release or threatened
release into the environment, of any pollutant, contaminant, or hazardous or
toxic substance, material or waste.

            3.17 Compliance With Corporate Instruments and Laws. The Company is
not in violation of any provisions of its Certificate of Incorporation or Bylaws
as currently in effect. The Company is in compliance in all material respects
with all applicable laws, statutes, rules, and regulations of all governmental
and regulatory authorities which are applicable and the compliance with which is
material to the Company or its assets or business. The Company has complied in
all material respects at all times with any and all applicable federal, state
and foreign laws, rules, regulations, proclamations and orders relating to the
importation or exportation of its products. All

                                       13
<PAGE>

licenses, franchises, permits and other governmental authorizations held by the
Company and which are material to its business are valid and sufficient in all
respects for the business presently carried on by the Company.

            3.18 Litigation. There is no suit, action, proceeding, claim or
investigation pending or, to the Company's knowledge, threatened against the
Company before any court or administrative agency which could have a Material
Adverse Effect or which questions or challenges the validity of this Agreement
or any Related Agreement. There is no judgment, decree, injunction, rule or
order of any court, governmental department, commission, agency, instrumentality
or arbitrator outstanding against the Company.

            3.19 Corporate Documents. The Company has furnished to the Purchaser
or its counsel for their examination true and complete copies of the following
documents: (i) copies of its Certificate of Incorporation and Bylaws, each as
currently in effect, (ii) minute books containing required records setting forth
proceedings, consents, actions, and meetings of its shareholders, board of
directors and any committees thereof, and (iii) all material permits, orders,
and consents issued by any regulatory agency with respect to the Company, or any
securities of the Company, and all applications for such permits, orders, and
consents. The corporate minute books, stock certificate books, stock registers
and other corporate records of the Company are complete and accurate in all
material respects, and the signatures appearing on all documents contained
therein are the true signatures of the persons purporting to have signed the
same. All actions reflected in such books and records were duly and validly
taken in compliance in all material respects with the laws of the applicable
jurisdiction.

            3.20 No Brokers. Neither the Company nor, to the Company's
knowledge, any Company shareholder is obligated for the payment of fees or
expenses of any broker or finder in connection with the origin, negotiation or
execution of this Agreement or any Related Agreement or in connection with any
transaction contemplated hereby or thereby.

            3.21 Related Party Transactions.

                  (a) None of the Company's Affiliates, officers, directors,
shareholders or employees, or any Affiliate of any of such Person, has any
material interest in any property, real or personal, tangible or intangible,
including Proprietary Assets used in or pertaining to the business of the
Company, except for the normal rights of a stockholder, or, to the knowledge of
the Company, any supplier, distributor or customer of the Company.

                  (b) Except for this Agreement and the Related Agreements,
there are no agreements, understandings or proposed transactions between the
Company and any of its officers, directors, employees, Affiliates, or, to the
Company's knowledge, any Affiliate thereof.

                                       14
<PAGE>

                  (c) To the best of the Company's knowledge, no employee,
officer or director of the Company has any direct or indirect ownership interest
in any firm or corporation with which the Company is affiliated or with which
the Company has a business relationship, or any firm or corporation that
competes with the Company, except that employees, officers or directors of the
Company may own stock in publicly traded companies that may compete with the
Company. To the Company's knowledge, no member of the immediate family of any
officer or director of the Company is directly or indirectly interested in any
material contract with the Company.

            3.22 Disclosure. The statements by the Company contained in this
Agreement, the exhibits hereto, and the certificates and documents required to
be delivered by the Company to the Purchaser under this Agreement, taken as a
whole, do not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements contained herein and
therein not misleading in light of the circumstances under which such statements
were made.

            3.23 Securities Act. Subject to the accuracy of the Purchaser's
representations in Section 4 hereof, the offer, sale and issuance of the
Preferred Shares in conformity with the terms of this Agreement and the issuance
of Conversion Shares upon conversion of the Preferred Shares constitute or will
constitute transactions exempt from the registration requirements of Section 5
of the Securities Act of 1933, as amended, and the qualification or registration
requirements of any applicable state securities laws as such laws exist on the
date hereof.

      4. Representations and Warranties of Purchaser and Restrictions on
Transfer Imposed by the Securities Act of 1933 and Applicable State Securities
Laws.

            4.1 Representations and Warranties by The Purchaser. The Purchaser
represents and warrants to the Company as follows:

                  (a) The Preferred Shares and the Conversion Shares
(collectively, the "Securities") are being or will be acquired for the
Purchaser's own account, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act of 1933, as amended (the "Securities Act"), or applicable
state securities laws.

                  (b) The Purchaser understands that (i) the Securities have not
been registered under the Securities Act by reason of their issuance in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act pursuant to Section 4(2) thereof and have not been qualified
under any state securities laws on the grounds that the offering and sale of
securities contemplated by this Agreement are exempt from registration
thereunder, and (ii) the Company's reliance on such exemptions is predicated on
the Purchaser's representations set forth herein. The Purchaser understands that
the resale of the Securities may be restricted indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act and registered under
any state securities law or is exempt from such registration.

                                       15
<PAGE>

                  (c) The Purchaser is an "Accredited Investor" as that term is
defined in Rule 501 of Regulation D promulgated under the Securities Act. The
Purchaser is able to bear the economic risk of the purchase of the Securities
pursuant to the terms of this Agreement, including a complete loss of the
Purchaser's investment in the Securities.

                  (d) The Purchaser has the full right, power and authority to
enter into and perform the Purchaser's obligations under this Agreement and each
Related Agreement, and this Agreement and each of the Related Agreements
constitute valid and binding obligations of the Purchaser enforceable in
accordance with their terms. The execution, delivery and performance by the
Purchaser of this Agreement and each of the Related Agreements have been duly
and validly approved and authorized by all necessary corporate action on its
part.

                  (e) No consent, approval or authorization of or designation,
declaration or filing with any Governmental Body on the part of the Purchaser is
required in connection with the valid execution and delivery of this Agreement
or any Related Agreement.

            4.2 Legend. Each certificate representing the Securities may be
endorsed with the following legends:

                  (a) THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND
ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT.
THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED
EXCEPT (I) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SHARES UNDER THE ACT, OR (II) IN COMPLIANCE WITH RULE 144 OR (III) OTHERWISE
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE ACT.

                  (b) Any other legends required by applicable securities laws.

The Company may instruct its transfer agent not to register the transfer of the
Securities, unless the conditions specified in the foregoing legends are
satisfied.

            4.3 Removal of Legend and Transfer Restrictions.

                  Any legend endorsed on a certificate pursuant to Section
4.2(a) and the stop transfer instructions with respect to such Securities shall
be removed and the Company shall issue a certificate without such legend to the
holder thereof (a) if such Securities are registered under the Securities Act
and a prospectus meeting the requirements of Section 10 of the Securities Act is
available, (b) if such legend may be properly removed under the terms of Rule
144 promulgated under the Securities Act, or

                                       16
<PAGE>

(c) if such holder provides the Company with an opinion of counsel for such
holder, reasonably satisfactory to legal counsel for the Company to the effect
that a sale, transfer or assignment of such Securities may be made without
registration.

      5. Indemnity.

            5.1. Indemnity.

                  (a) The Company hereby agrees to indemnify and defend and hold
harmless the Purchaser, its Affiliates, successors and assigns and each of their
respective officers, directors, employees and agents (the "Indemnified Parties")
from and against, and agrees to pay or cause to be paid to the Indemnified
Parties all amounts equal to the sum of, any and all claims, demands, costs,
expenses, losses and other liabilities of any kind (including without limitation
all reasonable legal fees and expenses) that the Indemnified Parties may incur
or suffer (collectively, "Damages") which arise or result from any breach of or
failure by the Company to perform any of its representations, warranties,
covenants or agreements in this Agreement or any Related Agreement. The rights
of the Purchaser hereunder shall be in addition to, and not in lieu of, any
other rights and remedies which may be available to it by law.

                  (b) Anything to the contrary notwithstanding, the Company
shall not be required to indemnify (whether such indemnification is pursuant to
this Section 5 or otherwise) any Indemnified Party for breaches of any
representation or warranty made in this agreement except to the extent that the
Damages suffered by the Indemnified Party as a result of such breach exceed
$50,000.

            5.2 Procedures.

                  (a) If a third party shall notify an Indemnified Party with
respect to any matter that may give rise to a claim for indemnification under
the indemnity set forth above in Section 5.1, the procedure set forth below
shall be followed.

                        (i) Notice. The Indemnified Party shall give to the
party providing indemnification (the "Indemnifying Party") written notice of any
claim, suit, judgment or matter for which indemnity may be sought under Section
5.1 promptly but in any event within thirty days after the Indemnified Party
receives notice thereof; provided, however, that failure by the Indemnified
Party to give such notice shall not relieve the Indemnifying Party from any
liability it shall otherwise have pursuant to this Agreement except to the
extent that the Indemnifying Party is actually prejudiced by such failure. Such
notice shall set forth in reasonable detail (i) the basis for such potential
claim and (ii) the dollar amount of such claim. The Indemnifying Party shall
have a period of fifteen days within which to respond thereto. If the
Indemnifying Party does not respond within such fifteen-day period, the
Indemnifying Party shall be deemed to have accepted responsibility for such
indemnity.

                                       17
<PAGE>

                        (ii) Defense of Claim. With respect to a claim by a
third party against an Indemnified Party for which indemnification may be sought
under this Agreement, the Indemnifying Party shall have the right, at its
option, to be represented by counsel of its choice and to assume the defense or
otherwise control the handling of any claim, suit, judgment or matter for which
indemnity is sought, which is set forth in the notice sent by the Indemnified
Party, by notifying the Indemnified Party in writing to such effect within
fifteen days of receipt of such notice; provided, however, that the Indemnified
Party shall have the right to employ counsel to represent it if, in the
Indemnified Party's reasonable judgment based upon the advice of counsel, it is
advisable in light of the separate interests of the Indemnified Party, to be
represented by separate counsel, and in that event the reasonable fees and
expenses of such separate counsel shall be paid by the Indemnifying Party. If
the Indemnifying Party does not give timely notice in accordance with the
preceding sentence, the Indemnifying Party shall be deemed to have given notice
that it does not wish to control the handling of such claim, suit or judgment.
In the event the Indemnifying Party elects (by notice in writing within such
fifteen-day period) to assume the defense of or otherwise control the handling
of any such claim, suit, judgment or matter for which indemnity is sought, the
Indemnifying Party shall indemnify and hold harmless the Indemnified Party from
and against any and all reasonable professional fees (including attorneys' fees,
accountants, consultants and engineering fees) and investigation expenses
incurred by the Indemnifying Party prior to such election, notwithstanding the
fact that the Indemnifying Party may not have been so liable to the Indemnified
Party had the Indemnifying Party not elected to assume the defense of or to
otherwise control the handling of such claim, suit, judgment or other matter. In
the event that the Indemnifying Party does not assume the defense or otherwise
control the handling of such matter, the Indemnified Party may retain counsel,
as an indemnification expense, to defend such claim, suit, judgment or matter.

                        (iii) Final Authority. The parties shall cooperate in
the defense of any such claim or litigation and each shall make available all
books and records which are relevant in connection with such claim or
litigation. In connection with any claim, suit or other proceeding with respect
to which the Indemnifying Party has assumed the defense or control, the
Indemnifying Party will not consent to the entry of any judgment or enter into
any settlement with respect to any matter which does not include a provision
whereby the plaintiff or claimant in the matter releases the Indemnified Party
from all liability with respect thereto, without the written consent of the
Indemnified Party. In connection with any claim, suit or other proceeding with
respect to which the Indemnifying Party has not assumed the defense or control,
the Indemnified Party may not compromise or settle such claim without the
consent of the Indemnifying Party, which shall not be unreasonably withheld and
shall be deemed to have been given if the Indemnified Party provides the
Indemnifying Party with a written notice setting forth the material terms of
such compromise or settlement and the Indemnifying Party does not object thereto
in writing within ten days of its receipt of such notice.

            (b) Claims Between the Indemnifying Party and the Indemnified Party.
Any claim for indemnification under this Agreement which does not result from
the assertion of a claim by a third party shall be asserted by written notice
given by the

                                       18
<PAGE>

Indemnified Party to the Indemnifying Party. The Indemnifying Party shall have a
period of thirty days within which to respond thereto. If the Indemnifying Party
does respond within such thirty-day period and rejects such claim in whole or in
part or does not respond, the Indemnified Party shall submit the dispute to
arbitration in accordance with Section 7.2 hereof.

      6. Use of Proceeds. The Company hereby covenants and agrees that all of
the net proceeds received by it from the issuance and sale of the Preferred
Shares shall be used for the purpose of developing and conducting the Business,
and no part of such net proceeds shall be used to (i) repay any Person any funds
expended by it or advanced by it to the Company prior to the Closing, unless
agreed to in writing by the Purchaser; provided, however, that the Company shall
be permitted, without any written agreement by the Purchaser, to pay any and all
of its debts and obligations (including but not limited to accounts payable,
accrued expenses and indebtedness) as such items become due pursuant to their
terms, and may prepay the principal amount outstanding (which principal amount
is currently approximately $1,300,000) under the promissory note (plus interest
thereon) issued to The Chase Manhattan Bank pursuant to the General Loan and
Collateral Agreement dated October 6, 1997 and the promissory note issued in
connection therewith; and (ii) pay any broker's fees or commissions or similar
payments of any kind.

      7. Miscellaneous.

            7.1 Waivers and Amendments. With the written consent of the
Purchaser, the obligations of the Company and the rights of the Purchaser under
this Agreement may be waived (either generally or in a particular instance,
either retroactively or prospectively and either for a specified period of time
or indefinitely), and with the same consent the Company may enter into a
supplementary agreement for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement. Neither
this Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.

            7.2 Arbitration. Any controversy or claim arising out of or relating
to this Agreement or any of the Related Agreements, or the breach hereof or
thereof, shall be settled by arbitration administered by the American
Arbitration Association under its Commercial Arbitration Rules, and judgment on
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. Such arbitration shall be conducted by a panel of three
arbitrators, each party having the right to select one arbitrator with the third
arbitrator to be selected in accordance with the rules of the American
Arbitration Association.

            7.3 Governing Law. This Agreement shall be governed in all respects
by the laws of the Commonwealth of Virginia without regards to the principles of
conflicts of laws thereof.

                                       19
<PAGE>

            7.4 Survival. The representations, warranties, covenants and
agreements made herein shall survive the execution of this Agreement and the
Closing of the transactions contemplated hereby.

            7.5 Successors and Assigns. Except as otherwise expressly provided
herein and subject to the Related Agreements and applicable law, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors and administrators of the parties hereto.

            7.6 Entire Agreement. This Agreement, the Related Agreements and
other exhibits to this Agreement and the other documents delivered pursuant
hereto constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof.

            7.7 Notices, etc. All notices, requests and other communications
hereunder shall be in writing and shall be deemed to have been duly given at the
time of receipt if delivered by hand or by facsimile transmission or three days
after being mailed, registered or certified mail, return receipt requested, with
postage prepaid, to the address or facsimile number (as the case may be) listed
for each such party below such party's signature page hereto or, if any party
shall have designated a different address or facsimile number by notice to the
other parties given as provided above, then to the last address or facsimile
number so designated.

            7.8 Separability. In case any provision of this Agreement shall be
declared invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

            7.9 Expenses. Each of the parties shall bear its respective expenses
and legal fees incurred with respect to this Agreement, each of the Related
Agreements and the transactions contemplated hereby and thereby.

            7.10 Titles and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.

            7.11 Counterparts. This Agreement may be executed simultaneously in
any number of counterparts and may be executed by facsimile. Each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute one agreement.

            7.12 Publicity. Neither of the parties to this Agreement, nor any of
their affiliates, shall issue any press release or otherwise make any public
announcement or disclosure with respect to this Agreement, any of the Related
Agreements or any of the transactions contemplated hereby or thereby without the
prior written consent of each of the other party, unless such disclosure is
required by applicable law.

                                       20
<PAGE>

            7.13 "Knowledge". When used in this Agreement, any representation
made "to the knowledge of the Company," "to the best of the Company's knowledge"
or with similar "knowledge" qualifications mean that such representation
includes the knowledge of the Company's Chief Executive Officer, Chief Operating
Officer and Chief Financial Officer.

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

                                       RTS WIRELESS, INC.

                                       By: /s/ Spencer Kravitz
                                           -------------------

                                       Name: /s/ Spencer Kravitz
                                             -------------------
                                       Title: Executive Vice President & COO
                                              ------------------------------

                                       Address: RTS Wireless, Inc.
                                                51 East Bethpage Road
                                                Plainview, New York 11803
                                                Attention: Mr. Alvin L. Ring,
                                                Chief Executive Officer
                                                Telecopier: 516-939-6189

                                       copy to: Parker Chapin LLP
                                                The Chrysler Building
                                                405 Lexington Avenue
                                                New York, New York 10174
                                                Attention: James Alterbaum, Esq.
                                                Telecopier: 212-704-6288

                                       AMERICA ONLINE, INC.

                                       By: /s/ Lynda Clerizio
                                           ------------------

                                       Name: /s/ Lynda Clerizio
                                            -------------------
                                       Title: Vice President
                                            -------------------

                                       Address: America Online, Inc.
                                                2200 AOL Way
                                                Dulles, Virginia 20166
                                                Attention: General Counsel
                                                Telecopier: 703-265-2208

                                       21
<PAGE>

                                                                    Confidential

                                    EXHIBIT A

                               CERTAIN DEFINITIONS

      For purposes of the Agreement to which this Exhibit A is attached, the
following terms have the following meanings:

      "Business Day" means any day other than a Saturday, Sunday or other day on
which the national or state banks located in the State of New York or the
Commonwealth of Virginia are authorized to be closed.

      "Common Stock" means the common stock, par value $.01 per share, of the
Company.

      "Company Account" means an account of the Company designated in a written
notice delivered to the Purchaser at least two Business Days prior to the date
of any required payment by the Purchaser to the Company under the Agreement.

      "Company Products" means all versions and implementations of any product
which has been, is being or is intended to be marketed by the Company.

      "Conversion Shares" means shares of Common Stock issuable upon conversion
of the Preferred Shares.

      "GAAP" means United States generally accepted accounting principles
consistently applied.

      "Governmental Body" means any: (a) nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign or other government; or (c)
governmental or quasi-governmental authority of any nature (including any
governmental division, department, agency, commission, instrumentality,
official, organization, unit, body or entity and any court or other tribunal).

      "Material Adverse Change" means a change which would have a Material
Adverse Effect.

      "Material Adverse Effect." An event, violation or other matter will be
deemed to have a "Material Adverse Effect" on the Company if such event,
violation or other matter would be material in impact or amount to the Company's
business, intellectual property rights or condition, or, taken as a whole, its
assets, liabilities, operations, or financial performance.

      "Person" means any individual, entity or Governmental Body.

      "Proprietary Asset" means: (a) any patent, patent application, trademark
(whether registered or unregistered), trademark application, trade name,
fictitious business name,
<PAGE>

service mark (whether registered or unregistered), service mark application,
copyright (whether registered or unregistered), copyright application, maskwork,
maskwork application, trade secret, know-how, customer list, franchise, system,
computer software, computer program, invention, design, blueprint, engineering
drawing, proprietary product, technology, proprietary right or other
intellectual property right or intangible asset; and (b) any right to use or
exploit any of the foregoing.

      "Related Agreements" means (a) the Investors Rights Agreement
substantially in the form attached as Exhibit C to the Agreement; and (b) any
other agreement or document entered into by any of the parties in connection
with the Agreement or any of the transactions contemplated thereby.

                                       2<PAGE>
                                                                    Exhibit 10.5

                           INVESTORS RIGHTS AGREEMENT

      This INVESTORS RIGHTS AGREEMENT (this "Agreement") is dated as of March
28, 2000 by and between RTS Wireless, Inc. a Delaware corporation (the
"Company"), (ii) the founders of the Company who are listed on Schedule A hereto
(each, a "Founder" and collectively, the "Founders"), and (iii) America Online,
Inc., a Delaware corporation (the "Investor"). The Founders and the Investor are
collectively referred to herein as the "Stockholders" and individually as a
"Stockholder". Certain terms used in this Agreement are defined in Exhibit A
hereto.

                                 R E C I T A L S

      A. The Investor has made an investment in the Company by acquiring 5,000
shares (the "Preferred Shares") of the Company's Series A Preferred Stock, par
value $.01 per share (the "Series A Preferred Stock").

      B. In connection with such purchase of the Preferred Shares, and to induce
the Investor to consummate such purchase of the Preferred Shares, the Founders
and the Company have agreed to enter into this Agreement and to grant to the
Investor the rights set forth herein.

                                    AGREEMENT

      NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the Stockholders and the Company
(collectively, the "Parties") agree as follows:

1. REGISTRATION RIGHTS

      1.1. Definitions. For purposes of this Statement:

            "Commencement Date" means the 180th day after the date on which the
Company consummates its initial public offering of securities under the
Securities Act.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute.

            "Holder" means (i) the Investor and (ii) any person or entity to
whom the Investor sells, transfers or assigns any of its Registrable Securities,
other than in a sale pursuant to Rule 144 under the Securities Act or a
registration effected pursuant to this Agreement.

<PAGE>

            "Register," "registered," and "registration" refer to an
underwritten registration effected by preparing and filing with the Securities
and Exchange Commission (the "Commission") a registration statement or similar
document in compliance with the Securities Act, and the declaration or ordering
by the Commission of effectiveness of such registration statement or document.

            "Registration Expenses" means all expenses in connection with the
Company's performance of or compliance with its obligations under this Section
1, including, without limitation, all (i) registration, qualification and filing
fees; (ii) fees, costs and expenses of compliance with securities or blue sky
laws (including reasonable fees, expenses and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the Registrable
Securities under the laws of such jurisdictions as the managing underwriter or
underwriters in a registration may designate, subject to the limitation as set
forth in subsection (h) of Section 1.5 hereof); (iii) printing expenses; (iv)
messenger, telephone and delivery expenses; (v) fees, expenses and disbursements
of counsel for the Company and of all independent certified public accountants
retained by the Company (including the expenses of any special audit and "cold
comfort" letters required by or incident to such performance); (vi) Securities
Act liability insurance if the Company so desires; (vii) fees, expenses and
disbursements of any other individuals or entities retained by the Company in
connection with the registration of the Registrable Securities; (viii) fees,
costs and expenses incurred in connection with the listing of the Registrable
Securities on each national securities exchange or automated quotation system on
which the Company has made application for the listing of its Common Stock; and
(ix) internal expenses of the Company (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties and expenses of any annual audit). Registration Expenses shall
not include selling commissions, discounts or other compensation paid to
underwriters or other agents or brokers to effect the sale of Registrable
Securities, or counsel fees and any other expenses incurred by Holders in
connection with any registration that are not specified in the immediately
preceding sentence.

            "Registrable Securities" means any shares of the Company's common
stock, par value $.01 per share (the "Common Stock"), issued or issuable upon
conversion of the Preferred Shares, but only to the extent such shares
constitute "restricted securities" under Rule 144 under the Securities Act.

            "Requestor" means the Holder or Holders requesting the registration
in question. Actions taken by the Requestor shall be taken by those Holders
making such request who hold a majority of the Registrable Securities held by
such Holders.

            "Securities Act" means the Securities Act of 1933, as amended, or
any successor statute.

      1.2. Demand Registrations.

            (a) Request for Registration. If at any time after the Commencement
Date one or more Holders of the Registrable Securities submits a written request
(a

                                       2
<PAGE>

"Demand Notice") to the Company that the Company register Registrable Securities
under and in accordance with the Securities Act (a "Demand Registration"), then
the Company shall:

                  (i) within five (5) days after receipt of such Demand Notice,
give written notice of the proposed registration to all other Holders; and

                  (ii) as soon as practicable, use diligent efforts to effect
such registration as may be so requested and as would permit or facilitate the
sale and distribution of all or such portion of such Registrable Securities as
are specified in such request, together with all or such portion of the
Registrable Securities of any Holders joining in such request as are specified
in written requests received by the Company within twenty (20) days after the
date the Company mails the written notice referred to in clause (i) above.

            Notwithstanding the foregoing, if the Company shall furnish to the
Holders a certificate signed by the president of the Company stating that in the
good faith judgment of the board of directors of the Company, it would be
seriously detrimental to the Company or its stockholders for a registration
statement to be filed on or before the date of filing would be required in
connection with any Demand Registration and it is therefore essential to defer
the filing of such registration statement, the Company shall have the right to
defer such filing or delay its effectiveness for a reasonable period not to
exceed 60 days provided that such right shall not be exercised more than once
with respect to a request for registration hereunder during any period of twelve
consecutive months. The Company will pay all Registration Expenses in connection
with such withdrawn request for registration.

            Notwithstanding the foregoing, the Company shall not be required to
effect more than one (1) registration pursuant to this Section 1.

                  (b) Underwriting. In connection with any registration under
this Section 1.2, if so requested by the Requestor, the Company shall use all
commercially reasonable efforts to enter into an underwriting agreement with one
or more underwriters having terms and conditions customary for such agreements.
The lead underwriter or underwriters for such offering shall be selected by the
Company and shall be reasonably acceptable to the Requestor, provided that the
parties hereby agree in advance that Salomon Smith Barney is acceptable for this
purpose.

      1.3. Company Registration.

            (a) Notice of Registration. If at any time or from time to time the
Company shall determine to register any of its Capital Stock, whether or not for
its own account, other than the Company's initial public offering and other than
a registration relating to employee benefit plans or a registration effected on
Form S-4, the Company shall:

                                       3
<PAGE>

                  (i) provide to each Holder written notice thereof at least ten
(10) days prior to the filing of the registration statement by the Company in
connection with such registration; and

                  (ii) include in such registration, and in any underwriting
involved therein, all those Registrable Securities specified in a written
request by each Holder received by the Company within five (5) days after the
Company mails the written notice referred to above, subject to the provisions of
Section 1.3(b) below.

            (b) Underwriting. The right of any Holder to registration pursuant
to this Section 1.3 shall be conditioned upon the participation by such Holder
in the underwriting arrangements specified by the Company in connection with
such registration and the inclusion of the Registrable Securities of such Holder
in such underwriting to the extent provided herein. All Holders proposing to
distribute their Registrable Securities through such underwriting shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the Company
and take all other actions, and deliver such opinions and certifications, as may
be reasonably requested by such managing underwriter. Notwithstanding any other
provision of this Section 1.3, if the managing underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, the managing underwriter may limit the number of Registrable
Securities to be included in such registration. The Company shall so advise all
Holders distributing Registrable Securities through such underwriting, and there
shall be excluded from such registration and underwriting, to the extent
necessary to satisfy such limitation, first shares held by any stockholder of
the Company other than the Holders, second shares held by the Holders and,
thereafter, to the extent necessary, shares which the Company wishes to register
for its own account. As among the Holders as a group, the number of Registrable
Securities that may be included in the registration and underwriting shall be
allocated in proportion, as nearly as practicable, to the respective amounts of
Registrable Securities required to be included (determined without regard to any
requirement of a request to be included in such registration) in such
registration held by all Holders at the time of filing the registration
statement. To facilitate the allocation of shares in accordance with the above
provisions, the Company may round the number of shares allocated to any Holder
to the nearest 100 shares.

            (c) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 1.3 prior to the effectiveness of such registration whether or not any
Holder has elected to include Registrable Securities in such registration.

      1.4. Expense of Registration. All Registration Expenses incurred in
connection with the registration and other obligations of the Company pursuant
to Sections 1.2, 1.3 and 1.5 shall be borne by the Company.

      1.5. Registration Procedures. If and whenever the Company is required by
the provisions of this Section 1 to effect the registration of Registrable
Securities, the Company shall:

                                       4
<PAGE>

            (a) promptly prepare and file with the Commission a registration
statement with respect to such Registrable Securities on any form that may be
utilized by the Company and that shall permit the disposition of the Registrable
Securities in accordance with the intended method or methods of disposition
thereof, and use its reasonable diligent efforts to cause such registration
statement to become effective as promptly as practicable and remain effective
thereafter as provided herein, provided that prior to filing a registration
statement or prospectus or any amendments or supplements thereto, including
documents incorporated by reference after the initial filing of any registration
statement, the Company will furnish to each of the Investors whose Registrable
Securities are covered by such registration statement, their counsel and the
underwriters copies of all such documents proposed to be filed sufficiently in
advance of filing to provide them with a reasonable opportunity to review such
documents and comment thereon;

            (b) prepare and file with the Commission such amendments (including
post-effective amendments) and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and current and to comply with the provisions
of the Securities Act with respect to the sale or other disposition of all
Registrable Securities covered by such registration statement, including such
amendments (including post-effective amendments) and supplements as may be
necessary to reflect the intended method of disposition by the prospective
seller or sellers of such Registrable Securities, provided that such
registration statement need not be kept effective and current for longer than
120 days subsequent to the effective date of such registration statement;

            (c) provide customary indemnity and contribution arrangements to any
qualified independent underwriter or qualified independent pricer as defined in
Schedule E of the Bylaws of the National Association of Securities Dealers, Inc.
(a "Qualified Independent Underwriter/Pricer"), if requested by such Qualified
Independent Underwriter/Pricer, on such reasonable terms as such Qualified
Independent Underwriter/Pricer customarily requires;

            (d) subject to receiving reasonable assurances of confidentiality,
for a reasonable period after the filing of such registration statement, and
throughout each period during which the Company is required to keep a
registration effective, make available for inspection by the selling holders of
Registrable Securities being offered, and any underwriters, and their respective
counsel, such financial and other information and books and records of the
Company, and cause the officers, directors, employees, counsel and independent
certified public accountants of the Company to respond to such inquiries as
shall be reasonably necessary, in the judgment of such counsel, to conduct a
reasonable investigation within the meaning of Section 11 of the Securities Act;

            (e) promptly notify the selling holders of Registrable Securities
and any underwriters and confirm such advice in writing, (i) when such
registration statement or the prospectus included therein or any prospectus
amendment or supplement or post-effective amendment has been filed, and, with
respect to such registration statement or any post-effective amendment, when the
same has become effective, (ii) of any

                                       5
<PAGE>

comments by the Commission, by the National Association of Securities Dealers
Inc. ("NASD"), and by the blue sky or securities commissioner or regulator of
any state with respect thereto or any request by any such entity for amendments
or supplements to such registration statement or prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceedings for that purpose, (iv) if at any time the
representations and warranties of the Company cease to be true and correct in
all material respects, (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, or (vi) at any time when a prospectus is required
to be delivered under the Securities Act, that such registration statement,
prospectus, prospectus amendment or supplement or post-effective amendment, or
any document incorporated by reference in any of the foregoing, contains an
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading;

            (f) furnish to each selling holder of Registrable Securities being
offered, and any underwriters, prospectuses or amendments or supplements
thereto, in such quantities as they may reasonably request and as soon as
practicable, that update previous prospectuses or amendments or supplements
thereto;

            (g) permit selling holders of Registrable Securities to rely on any
representations and warranties made to any underwriter of the Company or any
opinion of counsel or "cold comfort" letter delivered to any such underwriter,
and indemnify each such holder to the same extent that it indemnifies any such
underwriter;

            (h) use reasonable diligent efforts to (i) register or qualify the
Registrable Securities to be included in a registration statement hereunder
under such other securities laws or blue sky laws of such jurisdictions within
the United States of America as any selling holder of such Registrable
Securities or any underwriter of the securities being sold shall reasonably
request, (ii) keep such registrations or qualifications in effect for so long as
the registration statement remains in effect and (iii) take any and all such
actions as may be reasonably necessary or advisable to enable such holder or
underwriter to consummate the disposition in such jurisdictions of such
Registrable Securities owned by such holder; provided, however, that the Company
shall not be required for any such purpose to (x) qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would not
otherwise be required to qualify but for the requirements of this Section
1.5(h), (y) subject itself to taxation in any such jurisdiction or (z) consent
to general service of process in any such jurisdiction;

            (i) cause all such Registrable Securities to be listed or accepted
for quotation on each securities exchange or automated quotation system on which
the Company's Common Stock then trades; and

            (j) otherwise use reasonable diligent efforts to comply with all
applicable provisions of the Securities Act, and rules and regulations of the
Commission,

                                       6
<PAGE>

and make available to its security holders, as soon as reasonably practicable,
an earnings statement covering a period of at least twelve months which shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.

      1.6. Indemnification. In the event any of the Registrable Securities are
included in a registration statement under this Section 1:

            (a) the Company will indemnify each Holder who participates in such
registration, each of its officers and directors and partners and such Holder's
separate legal counsel and independent accountants, and each person controlling
such Holder within the meaning of Section 15 of the Securities Act, and each
underwriter, if any, and each person who controls any underwriter within the
meaning of Section 15 of the Securities Act, against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof), including any of
the foregoing incurred in settlement of any litigation, commenced or threatened,
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any registration statement, prospectus, offering
circular or other document, or any amendment or supplement thereto, incident to
any such registration, qualification or compliance, or based on any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any violation by the Company of any
rule or regulation promulgated under the Securities Act applicable to the
Company in connection with any such registration, qualification or compliance,
and the Company will reimburse each such Holder, each of its officers and
directors and partners and such Holder's separate legal counsel and independent
accountants and each person controlling such Holder, each such underwriter and
each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission or alleged untrue statement or omission, made in reliance
upon and in conformity with written information furnished to the Company by an
instrument duly executed by such Holder or underwriter and stated to be
specially for use therein.

            (b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and its legal counsel and independent accountants, each underwriter, if
any, of the Company's securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning of
Section 15 of the Securities Act, and each other such Holder, each of its
officers and directors and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statement therein not
misleading, and will reimburse the

                                       7
<PAGE>

Company, such Holders, such directors, officers, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder and
stated to be specifically for use therein.

            (c) Each party entitled to indemnification under this Section 1.6
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought provided
that failure to give such prompt notice shall not relieve the Indemnifying Party
of its obligations hereunder unless it is materially prejudiced thereby, and
shall permit the Indemnifying Party to assume the defense of any such claim or
any litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld). Such Indemnified Party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be paid by such Indemnified Party unless
(i) the Indemnifying Party has agreed to pay such fees and expenses or (ii) the
Indemnifying Party shall have failed to assume the defense of such action or
proceeding and employ counsel reasonably satisfactory to such Indemnified Party
in any such action or proceeding or (iii) the named parties to any such action
or proceeding (including any impleaded parties) include both such Indemnified
Party and the Indemnifying Party and such Indemnified Party shall have been
advised by counsel that there may be one or more legal defenses available to
such Indemnified Party which are different from or additional to those available
to the Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing of an election to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense of such action or proceeding on behalf of such
Indemnified Party, it being understood, however, that the Indemnifying Party
then shall have the right to employ separate counsel at its own expense and to
participate in the defense thereof, and shall not, in connection with any one
such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for all Indemnified
Parties, which firm shall be designated in writing by a majority of the
Indemnified Parties who are eligible to select such counsel). No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. No Indemnified Party may
consent to entry of any judgment or enter into any settlement without the prior
written consent of the Indemnifying Party.

                                       8
<PAGE>

            (d) If the indemnification provided for in this Section 1.6 is held
by a court of competent jurisdiction to be unavailable to an Indemnified Party
with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying the Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
with respect to such loss, liability, claim, damage or expenses in the
proportion that is appropriate to reflect the relative fault of the Indemnifying
Party and the Indemnified Party in connection with the statements or omissions
that resulted in such loss, liability, claim, damage, or expense, as well as any
other relevant equitable considerations. The relative fault of the Indemnifying
Party and the Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

      1.7. Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Registrable Securities to the public without registration, after
such time as a public market exists for the Common Stock, the Company shall use
reasonably diligent efforts to:

            (a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, beginning ninety
(90) days after the Company registers a class of securities under Section 12 of
the Exchange Act or completes a registered offering under the Securities Act; or

            (b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements);

            (c) Furnish to any Holder promptly upon request a written statement
as to its compliance with the reporting requirements of Rule 144 (at any time
after ninety (90) days after the Company completes a registered offering under
the Securities Act), and of the Securities Act and the Exchange Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company and other information in the possession of or
reasonably obtainable by the Company as a Holder may reasonably request for the
purpose of availing itself of any rule or regulation of the Commission allowing
a Holder to sell Registrable Securities without registration.

      1.8. Termination of Registration Rights. No Holder shall be entitled to
exercise any right provided for in this Section 1 after the earlier of (a) ten
years following the Commencement Date and (b) the date all Registrable
Securities held by such Holder may be sold in a single three-month period under
Rule 144 under the Securities Act.

      1.9. Information To Be Provided by the Holders. Each Holder whose
Registrable Securities are included in any registration pursuant to this
Agreement shall

                                       9
<PAGE>

furnish the Company such information regarding such Holder and the distribution
proposed by such Holder as may be reasonably requested in writing by the Company
and as shall be required in connection with such registration or the
registration or qualification of such securities under any applicable state
securities law.

      1.10. "Stand-Off" Agreement. Each Holder, if requested by the managing
underwriter of the initial registered public offering of securities by the
Company, shall agree not to sell or otherwise transfer or dispose of any
Registrable Securities or other securities of the Company then held by such
Holder for a specified period of time that is customary under the
circumstances (not to exceed one hundred eighty (180) days) following the
effective date of the registration statement for such offering, provided that
(a) no such agreement shall be required unless the officers, directors and
other principal stockholders of the Company enter into, and not be released
from, a similar agreement covering the same period of time and (b) such
agreement shall contain terms customary for such agreements. The Company may
impose stop transfer instructions to enforce any required agreement of the
Holders under this Section 1.10.

2.    PURCHASE RIGHTS REGARDING FUTURE SALES OF CAPITAL SECURITIES BY THE
      COMPANY

      2.1 Participation Right. Subject to the terms and conditions specified in
this Section 2.1, the Company hereby grants to the Investor a purchase right
with respect to future sales by the Company of its Capital Securities (as
hereinafter defined) occurring prior to a Qualified Initial Public Offering. The
Investor shall be entitled to apportion the purchase right hereby granted it
among itself and its affiliates in such proportions as it deems appropriate.
Each time the Company proposes to offer any Capital Securities, the Company
shall first make an offering of 50% of such Capital Securities to the Investor
in accordance with the following provisions:

            (a) The Company shall give the Investor written notice (a "Company
Sales Notice") stating (i) the Company's bona fide intention to offer such
Capital Securities, (ii) the number of such Capital Securities to be offered,
and (iii) the price and terms, if any, upon which it proposes to offer such
Capital Securities.

            (b) Within ten (10) Business Days after receipt of a Company Sales
Notice, the Investor shall give the Company a written notice (an "Investor
Purchase Notice") setting forth the number of such Capital Securities the
Investor is willing to purchase. The Capital Securities purchased by the
Investor under this subsection (b) shall be purchased at the price and on the
terms specified in the Company Sales Notice at a closing to be held within forty
(40) Business Days after the delivery of the Company Sales Notice. Such date
shall be specified by the Company in a written notice delivered to the Investor
at least ten (10) Business Days prior thereto. The price and other terms upon
which the Capital Securities shall be purchased shall include the purchase of
any other debt or equity securities proposed to be sold by the Company in the
same transaction. Without prejudice to the Investor's rights to purchase 50% of
such Capital Securities pursuant to this provision, the Company may consummate
the sale of the Capital Securities proposed to be sold to the third party on the
terms set forth in the

                                       10
<PAGE>

Company Sales Notice at any time after delievering the Company Sales Notice to
the Investor.

            (c) If the Investor does not elect, in accordance with Section
2.1(b), to obtain all the Capital Securities that the Investor is entitled to
obtain pursuant to this Section 2.1, the Company may, during the one hundred
twenty (120) day period following the expiration of the period provided in
Section 2.1(b) hereof, offer the remaining unsubscribed portion of such Capital
Securities to any Person or Persons at a price not less than, and upon terms no
more favorable to the offeree than, those specified in the Company Sales Notice
with respect thereto. If the Company does not enter into an agreement for the
sale of such Capital Securities within such period, or if such agreement is not
consummated within thirty (30) days of the execution thereof, the right provided
hereunder shall be deemed to be revived and such Capital Securities shall not be
offered unless first reoffered to the Investor in accordance herewith.

            (d) "Capital Securities" shall mean shares of, or any securities
convertible into or exercisable or exchangeable for any shares of, any class of
the capital stock of the Company other than (i) securities sold by the Company
in its initial public offering; (ii) securities (or options therefor) issued to
consultants, officers, directors and employees for the primary purpose of
soliciting or retaining their employment or services in a transaction or
pursuant to a plan approved by the Company's Board of Directors, (iii)
securities issued or sold as part of the Company's initial public offering,
whether or not such offering qualifies as a Qualified Initial Public Offering;
(iv) securities issued or sold as part of or after a Qualified Initial Public
Offering, (v) securities issued pursuant to the conversion or exercise of
outstanding convertible securities or warrants, options or other rights
representing the right to acquire capital stock of the Company, or (vi)
securities issued in connection with a bona fide business acquisition by the
Company, whether by merger, consolidation, sale of assets, sale or exchange of
stock or otherwise.

      2.2 Maintenance Right.

            (a) Except for Excluded Issuances (as defined below), if after a
Qualified Public Offering the Company proposes to sell or issue to any person or
entity (the "Offeree") any Capital Securities (the "Offered Securities"), the
Company shall also offer (a "Preemptive Offer") the Investor the right to
purchase, at the same price and upon the other terms as the Offered Securities
are proposed to be sold or issued to the Offeree, subject to the proviso at the
end of this paragraph (a), either (at the Company's option): (x) up to such
number of the Offered Securities as shall be equal to the total number of
Offered Securities mulitplied by the Applicable Percentage (as defined below);
or (y) up to such number of the same class of securities as the Offered
Securities as would enable the Investor to maintain its Applicable Percentage.
The Investor shall be entitled to apportion the purchase right hereby granted it
among itself and its affiliates in such proportions as it deems appropriate.
Without prejudice to the Investor's rights to purchase the Applicable Percentage
of the Offered Securities pursuant to this provision, the Company may consummate
the sale of the the Offered Securities proposed to be sold to the third party on
the terms set forth in the Company Sales Notice at any time after

                                       11
<PAGE>

delivering the Company Sales Notice to the Investor. "Excluded Issuances" shall
mean (a) the issuance of shares of Common Stock upon the exercise of options to
employees, officers, directors and consultants pursuant to any stock options or
the grant of any stock options to employees, officers, directors and consultants
of the Company pursuant to stock option plans approved by the board of directors
of the Company; (b) the issuance of shares of Common Stock pursuant to other
options, warrants and convertible securities outstanding on the date hereof; and
(c) the issuance of shares of Common Stock in connection with bona fide
equipment lease financings, licensing agreements, research and development
transactions, acquisitions of businesses or technology, or similar transactions.

            (b) As used herein, (i) the "Applicable Percentage" shall mean the
percentage of the fully diluted outstanding shares of Common Stock (as defined
below) deemed to be owned by the Investor immediately prior to the date on which
the Offered Securities are proposed to be issued (the "Applicable Percentage");
and (ii) the "fully diluted outstanding shares of Common Stock" shall mean, at
any time, the sum of the number of shares of Common Stock then outstanding and
the number of shares of Common Stock issuable pursuant to any outstanding
options, warrants or other securities but only to the extent such options,
warrants or other securities are then, or will by their terms within 180 days
become, exercisable, convertible or exchangeable for shares of Common Stock.

            (c) The Company shall give the Investor written notice of the
Pre-emptive Offer (a "Company Pre-emptive Rights Notice") stating (i) its bona
fide intention to offer such Capital Securities, (ii) the number of such Capital
Securities to be offered, and (iii) the price and terms, if any, upon which it
proposes to offer such Capital Securities.

            (d) To exercise its right to purchase any Capital Securities in the
Pre-emptive Offer, within ten (10) Business Days after receipt of a Company
Pre-emptive Rights Notice, the Investor shall give the Company written notice (a
"Pre-emptive Rights Exercise Notice") setting forth the number of such Capital
Securities such Investor wishes to purchase. The Capital Securities purchased by
the Investor under this subsection (b) shall be purchased at the price and on
the terms specified in the Company Pre-emptive Rights Notice at a closing to be
held within forty (40) Business Days after the delivery of the Pre-emptive
Rights Exercise Notice. Such date shall be specified by the Company in a written
notice given to each Investor participating in such sale at least ten (10)
Business Days prior thereto. The price and other terms upon which the Capital
Securities shall be purchased shall include the purchase of any other debt or
equity securities proposed to be sold by the Company in the same transaction.

                                       12
<PAGE>

3. INFORMATION AND INSPECTION RIGHTS

      3.1 Information. The Company shall deliver to the Investor for so long as
such Investor (together with any Persons whose securities are aggregated with
those of such Investor pursuant to Section 9.9 hereof for purposes of the
Agreement) holds shares of Series A Preferred Stock:

            (a) as soon as practicable, but in any event within one hundred
twenty (120) days after the end of each fiscal year of the Company, an income
statement of the Company for such fiscal year, a cash flow statement of the
Company for such fiscal year, and a balance sheet of the Company as of the end
of such fiscal year, with each such financial statement to be in reasonable
detail, prepared in accordance with GAAP, and audited and certified by a firm of
independent public accountants of nationally recognized standing selected by the
Company;

            (b) as soon as practicable, but in any event within sixty (60) days
after the end of each of the first three quarters of each fiscal year of the
Company, unaudited statements of income and cash flows of the Company for such
fiscal quarter and an unaudited balance sheet of the Company as of the end of
such fiscal quarter;

            (c) within thirty days of the end of each calendar month, unaudited
statements of income and cash flows and balance sheet of the Company for and as
of the end of such month, in reasonable detail;

            (d) as soon as practicable, but in any event at least thirty days
prior to the end of each fiscal year, a budget and business plan of the Company
for the next fiscal year, prepared on a monthly basis, including balance sheets
and statements of cash flows for such months and, as soon as prepared, any other
budgets or revised budgets prepared by the Company;

            (e) with respect to the financial statements called for in
subsections (b) and (c) of this Section 3.1, an instrument executed by the Chief
Financial Officer or President of the Company certifying that such financial
statements were prepared in accordance with GAAP consistently applied with prior
practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present the financial condition of the Company and
its results of operation, cash flows and changes in shareholders' equity for the
period specified, subject to year-end audit adjustments and the absence of
footnotes that may be required by GAAP; and

            (f) such other information relating to the financial condition,
business, prospects or corporate affairs of the Company as such Investor may
from time to time reasonably request.

      3.2. Inspection. During any period in which the Investor is entitled to
receive the materials specified in Section 3.1 hereof, the Company shall permit
the Investor, at the Investor's expense, to visit and inspect the Company's
properties, to examine its books of account and records and to discuss the
Company's affairs, finances and

                                       13
<PAGE>

accounts with its officers, all at such reasonable times during business hours
and upon reasonable notice as may be requested by the Investor.

4.    RIGHT OF FIRST REFUSAL AND RIGHT OF FIRST OFFER ON CHANGE IN CONTROL

      4.1. Right of First Refusal. The Investor is hereby granted the right of
first refusal described in sections 4.1(a) through (c) below exercisable in
connection with any proposed Corporate Transaction (as defined below) prior to
the Company's initial public offering (regardless of whether such initial public
offering constitutes a "Qualified Initial Public Offering"). As used herein, the
term "Corporate Transaction" shall mean (a) any consolidation or merger of the
Company with or into any other corporation or other entity, other than any
merger or consolidation resulting in the holders of the capital stock of the
Company immediately prior to such transaction entitled to vote for the election
of directors holding two-thirds (2/3) or more of the capital stock of the
surviving or resulting corporation or other entity entitled to vote for the
election of directors, (b) any sale or other disposition by the Company of all
or substantially all of its assets or capital stock or (c) any other transaction
that results in any Person (including any affiliates thereof) other than the
Investor or a current stockholder of the Company as of the date hereof becoming
a holder of a majority of the capital stock of the Company entitled to vote for
the election of directors.

            (a) Prior to the consummation of any Corporate Transaction with any
person other than the Investor, the Company shall give written notice (the
"Corporate Transaction Notice") of such transaction to the Investor. The
Corporate Transaction Notice shall include the name of the proposed transferee,
the proposed consideration per share, the terms of payment of such consideration
and all other material terms of such Corporate Transaction and shall be
accompanied by a copy of a letter of intent, if any, executed by the proposed
party to such Corporate Transaction to consummate such transaction. The
Corporate Transaction Notice shall constitute a binding offer by the Company to
enter into the transaction described in the Corporate Transaction Notice with
the Investor, subject to the negotiation of definitive documentation referred to
below in this Section 4.1(a). If the Invesor wishes to accept the offer referred
to in the Corporate Transaction Notice, it shall, not later than ten (10)
business days after the giving of the Corporate Transaction Notice (the
"Acceptance Period"), give written notice (an "Investor Acceptance Notice") to
the Company stating that it has accepted the offer stated in the Corporate
Transaction Notice.

            (b) If the Investor accepts the offer of the Company within the
Acceptance Period, the Company and the Investor shall use diligent efforts to
negotiate a binding definitive agreement for the Corporate Transaction, on the
terms offered by the proposed transferee in the Corporate Transaction Notice
(provided, however, that the Investor may make payment in cash in lieu of any
non-monetary terms of the proposed transfer, including, without limitation,
delivery of other securities in exchange for the property proposed to be sold),
within thirty (30) days after the giving of the Investor Acceptance Notice;
provided, however, that if the Company and the proposed transferee have reached
a definitive agreement (the "Third Party Agreement") with respect to the

                                       14
<PAGE>

Corporate Transaction, then a definitive agreement in the same form and with
substantially the same terms and conditions as the Third Party Agreement shall
be used as the definitive agreement for the Corporate Transaction with the
Investor.

            (c) If the offer stated in the Corporate Transaction Notice has not
been accepted by the Investor within the Acceptance Period, or if the Company
and the Investor are unable to negotiate a binding agreement for a Corporate
Transaction within thirty (30) days after delivery of the Investor Acceptance
Notice, then the Company shall be free to consummate a Corporate Transaction
with another party at a price and on other terms not less favorable as to price,
and not materially less favorable as to other terms, to the Company than the
price and other terms described in the Corporate Transaction Notice; provided,
however, that such transaction must be consummated within one hundred eighty
(180) days after expiration of the latest applicable period specified in Section
4.2(b) above. If such transaction is not consummated within such one hundred
eighty (180) day period then the Company shall be required to comply with the
terms of this Section 4.1 again, prior to consummating any Corporate
Transaction.

      4.2 Right of First Offer. The Investor is hereby granted the right of
first offer as described in Section 4.2(a) and (b) below exercisable in
connection with any proposed Corporate Transaction.

            (a) If at any time the board of directors of the Company shall
determine to seek to locate a third party with which to consummate any Corporate
Transaction, then prior to initiating any negotiation with respect to any such
Corporate Transaction, the Company shall give written notice (the "Negotiation
Notice") of such determination to the Investor. If the Investor wishes to
propose a Corporate Transaction with the Company, then the Investor shall, not
later than ten (10) days after delivery of the Negotiation Notice (the "Decision
Period"), give written notice thereof (the "Acceptance Notice") to the Company
stating whether the Investor wishes to propose a Corporate Transaction. The
Acceptance Notice shall include the proposed consideration per share, the terms
of payment of such consideration and all other substantive economic terms of the
proposed Corporate Transaction.

            (b) If the Company wishes to pursue the Corporate Transaction
proposed by the Investor, it shall so notify the Investor, and the Company and
the Investor shall then use diligent efforts to negotiate a Corporate
Transaction as proposed by the Investor within thirty (30) days after such
notice by the Company. If the Company does not wish to pursue the Corporate
Transaction proposed by the Investor, it shall so notify the Investor.

            (c) If the Company and the Investor are unable to negotiate,
utilizing diligent efforts, a binding agreement for a Corporate Transaction
within the thirty (30) day period referred to in the first sentence of Section
4.2(b), or if the Company notifies the Investor (as contemplated in the second
sentence of Section 4.2(b) that it does not with to pursue the Corporate
Transaction proposed by the Investor, then the Company shall have the right to
pursue any Corporate Transaction, subject to Section 4.1 (with

                                       15
<PAGE>

respect to Corporate Transactions proposed to be pursued prior to the Company's
initial public offering).

            (d) The provisions of this Section 4.2 shall not apply to any
discussions or transaction commenced at the initiative of a third party.

5. CO-SALE RIGHTS

      5.1. Notice. In the event, at any time prior to a Qualified Initial Public
Offering, a Founder (a "Selling Founder") desires to accept a bona fide offer
from a financially capable acquiror for the sale, transfer or other disposition
of any or all of the shares of capital stock of the Company owned of record or
beneficially by such Selling Founder or any securities ultimately convertible
into or exercisable for any such shares of capital stock (collectively, the
"Sale Shares"), such Selling Founder shall promptly give the Company and the
Investor, written notice of such intended disposition (a "Sale Notice") setting
forth the terms and conditions thereof, including the number and type of
securities to be disposed of, any conditions to such disposition, the proposed
timing of such disposition, the consideration to be paid for such securities and
the identity of the proposed acquirer. Except as otherwise provided herein, a
Selling Founder may not sell, transfer or otherwise dispose of any shares of
capital stock of the Company or any securities ultimately convertible into or
exercisable for such shares of capital stock unless it delivers to the Company
and the Investor a Sales Notice and complies with the provisions of this Section
5 or unless the proposed sale, transfer or disposition is exempt under Section
5.6 hereof from the co-sale rights granted herein.

      5.2. Grant of Co-Sale Rights. The Investor shall have the right,
exercisable upon written notice to the Selling Founder within thirty (30) days
after receipt of the Selling Founder's Sale Notice, to participate in such sale
of the Sale Shares on the same terms and conditions as those set forth in the
Sale Notice. The right of participation of the Investor shall be subject to the
terms and conditions set forth in this Section 5.2.

            (a) The Investor and the Selling Founder shall each be deemed to own
the number of shares of Common Stock that it actually owns plus the number of
shares of Common Stock that are issuable upon conversion of any convertible
securities of the Company or upon the exercise of any warrants, options or
similar rights then owned by it at an exercise price less than the purchase
price specified in the Sale Notice.

            (b) The Investor may sell all or any part of a number of Sale Shares
equal to the product obtained by multiplying (i) the aggregate number of Sale
Shares by (ii) a fraction, the numerator of which is the number of shares of
Common Stock of the Company deemed to be owned by the Investor and the
denominator of which is the sum of (X) the total number of outstanding shares of
Common Stock of the Company deemed to be owned by the Selling Founder and (Y)
the total number of outstanding shares of Common Stock of the Company deemed to
be owned by the Investor.

                                       16
<PAGE>

            (c) The Investor may effect its participation in the sale by
delivering to the Selling Founder for transfer to the acquirer one or more
certificates, properly endorsed for transfer, which represent:

                  (i) the number of shares that it elects to sell pursuant to
this Section 5.2;

                  (ii) that number of shares of convertible securities of the
Company that is at such time convertible into the number of shares of Common
Stock that it has elected to sell pursuant to this Section 5.2; provided,
however, that if the acquirer objects to the delivery of convertible securities
of the Company in lieu of Common Stock, the Investor may, to the extent
permitted by the terms of such security, convert and deliver Common Stock as
provided in subparagraph (i) above; or

                  (iii) a combination of the foregoing that in the aggregate
represents the number of shares of Common Stock to be sold by the Investor.

      5.3. Payment of Proceeds. The stock certificates that the Investor
delivers to the Selling Founder pursuant to Section 5.2 shall be transferred by
the Selling Founder to the acquirer in consummation of the sale of the Sale
Shares pursuant to the terms and conditions specified in the Sale Notice, and
the Selling Founder shall promptly thereafter remit to the Investor that portion
of the sale proceeds to which the Investor is entitled by reason of its
participation in such sale.

      5.4. Non-Exercise. The exercise or non-exercise of the rights of the
Investor hereunder to participate in one or more sales of Sale Shares made by
the Selling Founder shall not adversely affect its right to participate in
subsequent sales by the Selling Founder. In the event the Investor elects not to
exercise its co-sale rights hereunder with respect to a disposition, the Selling
Founder that sent the Sale Notice regarding such disposition may consummate such
disposition in accordance with the terms specified in the Sale Notice but only
within 90 days after the expiration of the Investor's co-sale rights.

      5.5. Prohibited Transfers. In the event a Founder should sell any Sale
Shares of the Company in contravention of the co-sale rights of the Investor
under this Agreement (a "Prohibited Transfer"), the Investor shall have the put
option provided in this Section 5.5. In the event of a Prohibited Transfer, the
Investor shall have the option to sell to the Selling Founder a number of shares
of Common Stock of the Company (either directly or through delivery of
convertible securities) equal to the number of shares that the Investor would
have been entitled to sell had such Prohibited Transfer been effected in
accordance with Section 5.2 hereof, on the following terms and conditions:

            (a) The price per share at which the shares are to be sold to the
Selling Founder shall be equal to the price per share paid to the Selling
Founder by the third-party acquiror or acquirer of the Selling Founder's Sale
Shares in the disposition referenced in the Sale Notice.

                                       17
<PAGE>

            (b) The Investor shall deliver to the Founder, within 30 days after
it has received notice from the Selling Founder or otherwise become aware of the
Prohibited Transfer, the certificate or certificates representing shares to be
sold, each certificate to be properly endorsed for transfer.

            (c) The Selling Founder shall, upon receipt of the certificates for
the repurchased shares, pay the aggregate purchase price therefor, by certified
check or bank draft made payable to the order of the Investor, and shall
reimburse the Investor for any additional expenses reasonably incurred,
including reasonable legal fees and expenses, incurred in effecting such
purchase and resale.

      5.6. Exempt Transfers. The provisions of this Section 5 shall not apply to
(i) transfers by the Founders of an aggregate of 20% of the capital stock held
by the Founders as of the date hereof, or (ii) any transfer by a Selling Founder
to the ancestors, descendants, siblings or spouse of the Selling Founder or to
trusts for the benefit of such persons or the Founder; provided that in each of
the foregoing cases the transferee shall furnish the Stockholders and the
Company with a written agreement to be bound by and comply with all provisions
of this Agreement. Such transferred stock shall remain subject to the provisions
of this Agreement, and such transferee shall be treated as a "Stockholder" (and
a transferee of a Founder shall be treated as a "Founder") for the purposes of
this Agreement.

6. LEGEND REQUIREMENTS

      6.1. Legend. Each certificate representing the shares of capital stock (or
securities convertible into or exercisable for shares of capital stock) of the
Company owned by the Stockholders shall be endorsed with the following legend:

      "THE SALE OR TRANSFER, THE VOTING AND CERTAIN OTHER RIGHTS RELATING TO THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
      CONDITIONS OF A CERTAIN INVESTOR RIGHTS AGREEMENT BY AND AMONG THE COMPANY
      AND CERTAIN STOCKHOLDERS OF THE COMPANY. A COPY OF SUCH AGREEMENT IS ON
      FILE AT THE PRINCIPAL OFFICE OF THE COMPANY."

      6.2. Removal. The legend set forth in Section 6.1 hereof shall be removed
upon termination of this Agreement in accordance with the provisions of Section
9.1.

      6.3. Securities Act Legend. For as long as appropriate under applicable
law, each certificate representing the shares of capital stock (or securities
convertible into or exercisable for shares of capital stock) of the Company
owned by the Investor shall be endorsed with the following legend:

      "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED ("THE ACT"). THE SHARES HAVE BEEN
      ACQUIRED FOR INVESTMENT

                                       18
<PAGE>

      AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
      EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES UNDER THE ACT OR AN
      OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT REGISTRATION IS NOT
      REQUIRED UNDER THE ACT."

7. DIRECTORS

      7.1. Election. Until such time as the number of Common Share Equivalents
held by the Investor and its affiliates equals less than 2% of the fully diluted
outstanding shares of Common Stock, the Investor shall have the right to
designate one director of the Company (the "Series A Director") or, at its
option, one Board observer (the "Board Observer"); provided that the person so
designated shall be consented to by a majority of the Board (not including such
designee), which consent shall not be unreasonably withheld. Each of the
Founders shall vote his shares of Common Stock in favor of such designee.

      7.2. Removal; Confidentiality Agreement. Any Series A Director may be
removed during his or her term of office, either with or without cause, by, and
only by, the affirmative vote or written consent of the holders of a majority of
the then-outstanding Series A Preferred Stock, voting or consenting as a
separate class. Any vacancy of a Series A Director position shall be filled only
by the affirmative vote or written consent of the Holders, voting as a separate
class. Each Series A Director shall execute and deliver a confidentiality
agreement relating to information obtained by such director in his or her
capacity as a director of the Company in the form of Exhibit B.

      7.3. Board Observer. The Board Observer, if any, shall be entitled to
attend and participate in all meetings of the Board and to receive upon issuance
to the members of the Board any materials, including financial statements,
prepared for the members of the Board. The Board Observer shall have no duties,
responsibilities or liability by virtue of the Board Observer's attendance at
any Board meetings or committee meetings or the failure to attend such meetings.
Each Board Observer shall also execute and deliver a confidentiality agreement
relating to information obtained by such observer in his or her capacity as a
board observer in the form of Exhibit B.

8. CONFIDENTIALITY OF AGREEMENTS

            (a) Neither party shall make any press release about or other public
statement or announcement concerning, or disclose to any third party the
existence or dislcose any of the terms and conditions of, this Agreement, the
Related Agreements or any commercial arrangement between the parties without the
prior written consent of the other party.

            (b) The foregoing notwithstanding, however, (i) a party may make any
disclosure to its Affiliates and to its directors, officers, employees,
attorneys and accountants, and to the underwriters engaged by the Company in
connection with any offering of its securities, whose duties reasonably require
familiarity with such matters,

                                       19
<PAGE>

provided that such persons (including any such underwriters) are bound to
maintain the confidentiality of such matters, and (ii) a party may make such
disclosure as may be required by applicable law or regulation, in which case the
disclosing party shall give the other party prompt advance notice of such
disclosure so that the other party has the opportunity if it so desires to seek
a protective order or other appropriate remedy; provided that, in connection
with any offering of securities of the Company, the Company shall provide in
advance to the Investor for review the form and content of any disclosure of any
of such matters that may be required by law or regulation and, to the extent
consistent with its disclosure obligations under applicable law, the Company
shall include such modifications to such disclosure as may be reasonably
requested by the Investor (except that the Company may file any of the
Agreements as an exhibit to its registration statement if any of the Agreements
would constitute a "material agreement" under applicable law or regulation and
the Company shall use its best efforts to obtain confidential treatment of the
portions of any such Agreements that meet the Securities and Exchange Commission
qualifications for confidential treatment if so requested by Investor).

9. MISCELLANEOUS PROVISIONS

      9.1. Termination. Except as otherwise provided herein, the rights and
obligations of the Company and the Stockholders under this Agreement shall
terminate as to any specific Stockholder at such time as such Stockholder shall
no longer own shares of Common Stock or securities of the Company convertible or
exercisable for shares of Common Stock.

      9.2. Notices. All notices, requests and other communications hereunder
shall be in writing and shall be deemed to have been duly given at the time of
receipt if delivered by hand or by facsimile transmission or three days after
being mailed, registered or certified mail, return receipt requested, with
postage prepaid, to the address or facsimile number (as the case may be) listed
below the signature of each Party on such Party's signature page hereto if any
Party shall have designated a different address or facsimile number by notice to
the other Parties given as provided above, then to the last address or facsimile
number so designated.

      9.3. Severability. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed and interpreted in such manner as to be effective and valid
under applicable law.

      9.4. Waiver or Modification. Any amendment or modification of this
Agreement shall be effective only if evidenced by a written instrument executed
by the Company and by Investors that hold a majority of the total Common Share
Equivalents held by all of the Investors.

                                       20
<PAGE>

      9.5. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia without regard to the
principles of conflicts of laws thereof.

      9.6. Attorneys' Fees. In the event of any dispute involving the terms
hereof, the prevailing parties shall be entitled to collect legal fees and
expenses from the other party to the dispute.

      9.7. Further Assurances. Each Party agrees to act in accordance herewith
and not to take any action that is designed to avoid the intention hereof.

      9.8. Successors and Assigns. This Agreement and the rights and obligations
of the Parties hereunder shall inure to the benefit of, and be binding upon,
their respective successors, assigns and legal representatives. Each Stockholder
may assign its rights hereunder to (i) any transferee of Shares held by such
Stockholder or (ii) the ancestors, descendants, siblings or spouse of such
Stockholder or to trusts for the benefit of such persons or such Stockholder;
provided that in each of the foregoing cases, the transferee shall furnish the
other Stockholders and the Company with a written agreement to be bound by and
comply with all provisions of this Agreement. Such transferee shall be treated
as a "Stockholder" (and a transferee of a Founder shall be treated as a
"Founder") for the purposes of this Agreement.

      9.9. Aggregation of Stock. For purposes of determining the availability of
any rights under this Agreement, the number of shares of Common Stock or other
securities of the Company deemed to be owned by a Stockholder or other Person
shall include all such shares or other securities owned by such Stockholder or
other Person, such Stockholder's (or other Person's) Affiliates and their
respective partners, members, or shareholders, and any other person or entity
that acquires any such shares or other securities from any of the foregoing by
gift, will or intestate succession.

      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       21
<PAGE>

                            [Company Signature page]

      IN WITNESS WHEREOF, the undersigned Stockholder has executed this
Agreement as of the day and year first above written.

                                        RTS WIRELESS, INC.

                                        By: /s/ Spencer Kravitz
                                           -------------------------------------
                                        Name: Spencer Kravitz

                                        Title: Executive VP and COO

                                        Address for Notice:

                                        RTS Wireless, Inc.
                                        51 East Bethpage Road
                                        Plainview, New York 11803
                                        Facsimile No.: 516-939-6189
                                        Attn: Mr. Alvin L. Ring,
                                        Chief Executive Officer

                                        With a copy to:

                                        Parker Chapin LLP
                                        The Chrysler Building
                                        405 Lexington Avenue
                                        New York, New York 10174
                                        Facsimile No.: 212-704-6288
                                        Attn: James Alterbaum, Esq.

                                       22
<PAGE>

                            [Investor Signature page]

      IN WITNESS WHEREOF, the undersigned Investor has executed this Agreement
as of the day and year first above written.

                                        AMERICA ONLINE, INC.

                                        By: /s/ Lynda Clerizio
                                           -------------------------------------
                                        Name: Lynda Clerizio

                                        Title: Vice President

                                        Address for Notice:
                                        2200 AOL Way
                                        Dulles, Virginia 20166
                                        Facsimile No.: 703-265-2208
                                        Attn: General Counsel

                                        With a copy to:
                                        Arnold & Porter
                                        555 12th Street N.W.
                                        Washington, D.C. 20004
                                        Facsimile No.: 202-942-5999
                                        Attn: Robert B. Ott

                                       23
<PAGE>

                          [Stockholder Signature page]

      IN WITNESS WHEREOF, the undersigned Stockholder has executed this
Agreement as of the day and year first above written.

                                        /s/ Alvin L. Ring
                                        ----------------------------------------
                                        Alvin L. Ring

                                        Address for Notice:

                                        c/o RTS Wireless, Inc.
                                        51 East Bethpage Road
                                        Plainview, New York 11803
                                        Facsimile No.: 516-939-6189

                                       24
<PAGE>

                          [Stockholder Signature page]

      IN WITNESS WHEREOF, the undersigned Stockholder has executed this
Agreement as of the day and year first above written.

                                        /s/ Spencer Kravitz
                                        ----------------------------------------
                                        Spencer Kravitz

                                        Address for Notice:

                                        c/o RTS Wireless, Inc.
                                        51 East Bethpage Road
                                        Plainview, New York 11803
                                        Facsimile No.: 516-939-6189

                                       25
<PAGE>

                          [Stockholder Signature page]

      IN WITNESS WHEREOF, the undersigned Stockholder has executed this
Agreement as of the day and year first above written.

                                        /s/ Jay Moskowitz
                                        ----------------------------------------
                                        Jay Moskowitz

                                        Address for Notice:

                                        c/o RTS Wireless, Inc.
                                        51 East Bethpage Road
                                        Plainview, New York 11803
                                        Facsimile No.: 516-939-6189

                                       26
<PAGE>

                          [Stockholder Signature page]

      IN WITNESS WHEREOF, the undersigned Stockholder has executed this
Agreement as of the day and year first above written.

                                        /s/ Bruce Laskin
                                        ----------------------------------------
                                        Bruce Laskin

                                        Address for Notice:

                                        c/o RTS Wireless, Inc.
                                        51 East Bethpage Road
                                        Plainview, New York 11803
                                        Facsimile No.: 516-939-6189

                                       27
<PAGE>

                                    EXHIBIT A

                               CERTAIN DEFINITIONS

      For purposes of the Agreement to which this Exhibit A is attached, the
following terms have the following meanings:

      "Affiliate" of any Person (the "Subject Person") means any Person that
Controls, is Controlled by or is under common Control with the Subject Person.

      "Business Day" means any day other than a Saturday, Sunday or other day on
which the national or state banks located in the State of New York or the
Commonwealth of Virginia are authorized to be closed.

      "Common Share Equivalents" means all shares of Common Stock that are
issued and outstanding or are issuable upon the exchange, exercise or conversion
of any other security of the Company. The number of Common Share Equivalents
owned by a Person shall equal the sum of the number of shares of Common Stock
owned by such Person plus the number of shares of Common Stock issuable upon the
exchange, exercise or conversion of any other security of the Company owned by
such Person.

      "Common Stock" means the common stock, par value $.01 per share, of the
Company.

      "Control" and derivatives thereof mean the power to control the management
and policies of the Controlled Person whether by ownership of voting securities,
contract or otherwise.

      "GAAP" means United States generally accepted accounting principles
consistently applied.

      "Person" means any individual, entity or governmental body.

      "Qualified Initial Public Offering" means a public offering of Common
Stock pursuant to an effective registration statement under the Securities Act
of 1933, as amended, that (a) has (x) a public offering price that, (y) when
mulitplied by the sum of the number of shares of Common Stock outstanding after
such offering and the number of shares of Common Stock issuable pursuant to all
outstanding options, warrants or other securities then outstanding (including
shares issuable pursuant to any underwriter's over-allotment option and any
options outstanding under any stock option plan or program of the Company), (z)
results in a product of not less than $350,000,000 and (b) is underwritten by
one or more nationally recognized investment banking firms or a syndicate
managed or co-managed by one or more nationally recognized investment banking
firms that results in (i) the Company receiving at least $25 million in gross
proceeds and (ii) the Common Stock being traded on the New York Stock Exchange
or

                                       28
<PAGE>

the Nasdaq National Market; provided, however, that, if the Company's initial
public offering does not qualify as a Qualified Initial Public Offering then a
Qualified Initial Public Offering shall be deemed to have occurred on the last
day of the first period of 20 consecutive trading days on which the Common Stock
is traded on the New York Stock Exchange or the Nasdaq National Market that
occurs after the Company's initial public offering on which the last trade in
the Common Stock occurred at (I) a price that, (II) when multiplied by the sum
of the number of shares of Common Stock outstanding on such day and the number
of shares of Common Stock issuable pursuant to all outstanding options, warrants
or other securities then outstanding (including shares issuable pursuant to any
underwriter's over-allotment option and any options outstanding under any stock
option plan or program of the Company), (III) results in a product of not less
than $450,000,000.

                                       29

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