Document:

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                                                                 EXHIBIT 10.24

                          SECURITIES PURCHASE AGREEMENT

     This SECURITIES PURCHASE AGREEMENT, dated as of May 2, 2000 (this
"AGREEMENT"), by and between Wareforce.com, Inc., a Nevada corporation, with
principal executive offices located at 2281 Rosecrans Avenue, Suite 155, El
Segundo, California 90245 (the "COMPANY"), and Triton Private Equities Fund,
L.P., a Delaware Limited Partnership ("BUYER").

     WHEREAS, Buyer desires to purchase from the Company, and the Company
desires to issue and sell to Buyer, upon the terms and subject to the conditions
of this Agreement, (i) 64,935 shares of the Company's Series A 6% Convertible
Preferred Stock, par value $0.001 per share (collectively, the "PREFERRED
SHARES"), and (ii) Common Stock Purchase Warrants in the form attached hereto as
Exhibit A to purchase 16,667 shares of Common Stock (as defined below)
(collectively, the "WARRANTS");

     WHEREAS, upon the terms and subject to the designations, preferences and
rights set forth in the Company's Certificate of Designation of Series A 6%
Convertible Preferred Stock in the form attached hereto as Exhibit B (the
"CERTIFICATE OF DESIGNATION"), the Preferred Shares are convertible into shares
of the Company's common stock, par value $0.001 per share (the "COMMON STOCK");
and

     WHEREAS, the Warrants, upon the terms and subject to the conditions
specified in the Warrants, will be exercisable for a period of five years;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:

     I. PURCHASE AND SALE OF PREFERRED SHARES AND WARRANTS

     A. TRANSACTION. Buyer hereby agrees to purchase from the Company, and the
Company has offered and hereby agrees to issue and sell to Buyer in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act of 1933, as amended (the "SECURITIES ACT"), the Preferred
Shares and the Warrants to purchase 16,667 shares of Common Stock.

     B. PURCHASE PRICE; FORM OF PAYMENT. The purchase price for the Preferred
Shares and the Warrants to be purchased by Buyer hereunder shall be $500,000
(the "PURCHASE PRICE"). Simultaneously with the execution of this Agreement,
Buyer shall pay the Purchase Price by wire transfer of immediately available
funds to the escrow agent (the "ESCROW AGENT") identified in those certain
Escrow Instructions of even date herewith, a copy of which is attached hereto as
Exhibit C (the "ESCROW INSTRUCTIONS"). Simultaneously with the execution of this

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Agreement, the Company shall deliver one or more duly authorized, issued and
executed certificates (I/N/O Buyer or, if the Company otherwise has been
notified, I/N/O Buyer's nominee) evidencing the Preferred Shares and the
Warrants which Buyer is purchasing, to the Escrow Agent or its designated
depository. By executing and delivering this Agreement, Buyer and the Company
each hereby agree to observe the terms and conditions of the Escrow
Instructions, all of which are incorporated herein by reference as if fully set
forth herein.

     C. METHOD OF PAYMENT. Payment into escrow of the Purchase Price shall be
made as set forth in the Escrow Instructions.

                   II. BUYER'S REPRESENTATIONS AND WARRANTIES

     Buyer represents and warrants to and covenants and agrees with the Company
as follows:

     A. Buyer is purchasing the Preferred Shares, the Warrants, the Common Stock
issuable upon exercise of the Warrants (the "WARRANT SHARES"), the Common Stock,
if any, issuable in payment of dividends on the Preferred Shares (the "DIVIDEND
SHARES"), and the Common Stock issuable upon conversion or redemption of the
Preferred Shares (the "CONVERSION SHARES" and, collectively with the Preferred
Shares, the Warrants, the Warrant Shares and the Dividend Shares, the
"SECURITIES") for its own account, for investment purposes only and not with a
view towards or in connection with the public sale or distribution thereof in
violation of the Securities Act.

     B. Buyer is (i) an "ACCREDITED INVESTOR" within the meaning of Rule 501 of
Regulation D under the Securities Act, (ii) experienced in making investments of
the kind contemplated by this Agreement, (iii) capable, by reason of its
business and financial experience, of evaluating the relative merits and risks
of an investment in the Securities, and (iv) able to afford the loss of its
investment in the Securities.

     C. Buyer understands that the Securities are being offered and sold by the
Company in reliance on an exemption from the registration requirements of the
Securities Act and equivalent state securities and "blue sky" laws, and that the
Company is relying upon the accuracy of, and Buyer's compliance with, Buyer's
representations, warranties and covenants set forth in this Agreement to
determine the availability of such exemption and the eligibility of Buyer to
purchase the Securities;

     D. Buyer understands that the Securities have not been approved or
disapproved by the Securities and Exchange Commission (the "COMMISSION") or any
state securities commission.

     E. This Agreement has been duly and validly authorized, executed and
delivered by Buyer and is a valid and binding agreement of Buyer enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and except as rights to
indemnity and contribution may be limited by federal or state securities laws or
the public policy underlying such laws.

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     F. Neither Buyer nor its affiliates nor any person acting on its or their
behalf shall enter into, prior to the Closing or at any other time while any of
the Preferred Shares remain outstanding, any put option, short position or other
similar instrument or position with respect to the Common Stock and neither
Buyer nor any of its affiliates nor any person acting on its or their behalf
will use at any time shares of Common Stock acquired pursuant to this Agreement
to settle any put option, short position or other similar instrument or position
that may have been entered into prior to the execution of this Agreement;
provided, however, that nothing in this Section II.F. shall operate to forbid
Buyer or any of its affiliates or any person acting on its or their behalf from
selling, or entering into any other transaction with respect to, the Common
Stock contemporaneously with or following such date and time as the person or
persons in whose name or names the Common Stock delivered at conversion of
Preferred Shares, as provided in the Certificate of Designation, shall be
issuable shall be deemed to have become the holder or holders of record of the
Common Shares represented thereby and all voting and other rights associated
with the beneficial ownership of such Common Shares shall have vested with such
person or persons.

                       III. THE COMPANY'S REPRESENTATIONS

          The Company represents and warrants to Buyer that:

          A. CAPITALIZATION.

          1. The authorized capital stock of the Company consists solely of: (x)
     50,000,000 shares of Common Stock, of which 11,997,598 shares are issued
     and outstanding on the date hereof; and (y) 5,000,000 shares of preferred
     stock, of which no shares are issued and outstanding. As of April 18, 2000,
     the Company had outstanding stock options to purchase 647,000 shares of
     Common Stock and warrants outstanding to purchase 1,575,850 shares of
     Common Stock. The exercise price for each of such outstanding options and
     warrants is accurately set forth on Schedule III.A.1. hereto.

          2. The Conversion Shares, the Dividend Shares and the Warrant Shares
     have been duly and validly authorized and reserved for issuance by the
     Company, and when issued by the Company upon conversion of, or in lieu of
     cash dividends on, the Preferred Shares and on exercise of the Warrants
     will be duly and validly issued, fully paid and nonassessable and will not
     subject the holder thereof to personal liability by reason of being such
     holder.

          3. Except as disclosed on Schedule III.A.3. hereto, there are no
     preemptive, subscription, "call," right of first refusal or other similar
     rights to acquire any capital stock of the Company or any of its
     Subsidiaries or other voting securities of the Company that have been
     issued or granted to any person and no other obligations of the Company or
     any of its Subsidiaries to issue, grant, extend or enter into any security,
     option, warrant, "call," right, commitment, agreement, arrangement or
     undertaking with respect to any of their respective capital stock.

          4. Schedule III.A.4. hereto lists all the subsidiaries of the Company
     (the "SUBSIDIARIES"). Except as disclosed on Schedule III.A.4. hereto, the
     Company does

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     not own or control, directly or indirectly, any interest in any other
     corporation, partnership, limited liability company, unincorporated
     business organization, association, trust or other business entity.

          5. The Company has delivered to Buyer complete and correct copies of
     the Certificate of Incorporation and the By-Laws of each of the Company and
     the Subsidiaries, in each case as amended to the date of this Agreement.
     Except as set forth on Schedule III.A.5., the Company has delivered to
     Buyer true and complete copies of all minutes of the Board of Directors of
     the Company (the "BOARD OF DIRECTORS") since April 1, 1997.

          B. ORGANIZATION; REPORTING COMPANY STATUS.

          1. Each of the Company and the Subsidiaries is a corporation duly
     organized, validly existing and in good standing under the laws of the
     state or jurisdiction in which it is incorporated and is duly qualified as
     a foreign corporation in all jurisdictions in which the failure so to
     qualify would reasonably be expected to have a material adverse effect on
     the business, properties, prospects, condition (financial or otherwise) or
     results of operations of the Company and the Subsidiaries taken as a whole
     or on the consummation of any of the transactions contemplated by this
     Agreement (a "MATERIAL ADVERSE EFFECT").

          2. The Company has validly registered the Common Stock pursuant to the
     provisions of the Securities Exchange Act of 1934, as amended (the
     "EXCHANGE ACT"). The Common Stock is traded on the OTC Bulletin Board
     service of the National Association of Securities Dealers, Inc. ("OTCBB")"
     and the Company has not received any notice regarding, and to its knowledge
     there is no threat of, the termination or discontinuance of the eligibility
     of the Common Stock for such trading.

     C. AUTHORIZATION. The Company (i) has duly and validly authorized and
reserved for issuance 350,000 shares of Common Stock, which is a number
sufficient for the conversion of and the payment of dividends (in lieu of cash
payments) on the 64,935 Preferred Shares and the exercise of the Warrants in
full, and (ii) at all times from and after the date hereof shall have a
sufficient number of shares of Common Stock duly and validly authorized and
reserved for issuance to satisfy the conversion of Preferred Shares, the payment
of dividends (in lieu of cash payments) on the Preferred Shares and the exercise
of the Warrants in full. The Company understands and acknowledges the
potentially dilutive effect on the Common Stock of the issuance of the Preferred
Shares and of the Conversion Shares, the Dividend Shares and the Warrant Shares
upon the conversion of, and payment of dividends on, the Preferred Shares and
the exercise of the Warrants, respectively. The Company further acknowledges
that its obligation to issue Conversion Shares upon conversion of the Preferred
Shares and Warrant Shares upon exercise of the Warrants in accordance with this
Agreement, the Certificate of Designation and the Warrants is absolute and
unconditional regardless of the dilutive effect that such issuance may have on
the ownership interests of other stockholders of the Company and notwithstanding
the commencement of any case under 11 U.S.C. Section 101 et seq. (the
"BANKRUPTCY CODE"). In the event the Company is a debtor under the Bankruptcy
Code, the Company hereby waives to the fullest extent permitted any rights to
relief it may have under 11 U.S.C. Section 362 in

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respect of the conversion of the Preferred Shares and the exercise of the
Warrants. The Company agrees, without cost or expense to Buyer, to take or
consent to any and all action necessary to effectuate relief under 11 U.S.C.
Section 362. Schedule III.C. hereto sets forth (i) all issuances and sales by
the Company since December 31, 1998 of its capital stock, and other securities
convertible into or exercisable or exchangeable for capital stock of the
Company, (ii) the amount of such securities sold, including the amount of any
underlying shares of capital stock, (iii) the purchaser thereof, (iv) the amount
paid therefor, and (v) the material terms of all outstanding capital stock of
the Company (other than the Common Stock).

     D. AUTHORITY; VALIDITY AND ENFORCEABILITY. The Company has the requisite
corporate power and authority to file, and perform its obligations under, the
Certificate of Designation and to enter into the Documents (as hereinafter
defined) and to perform all of its obligations hereunder and thereunder
(including the issuance, sale and delivery to Buyer of the Securities). The
execution, delivery and performance by the Company of the Documents and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the filing of the Certificate of Designation
with the Nevada Secretary of State's office, the issuance of the Preferred
Shares and the Warrants and the issuance and reservation for issuance of the
Conversion Shares, the Dividend Shares and the Warrant Shares) have been duly
and validly authorized by all necessary corporate action on the part of the
Company. Each of the Documents has been duly and validly executed and delivered
by the Company and the Certificate of Designation has been duly filed with the
Nevada Secretary of State's office by the Company, and each Document constitutes
a valid and binding obligation of the Company enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and except as rights to indemnity and
contribution may be limited by federal or state securities laws or the public
policy underlying such laws. The Securities have been duly and validly
authorized for issuance by the Company and, when executed and delivered by the
Company, will be valid and binding obligations of the Company enforceable
against it in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally. For purposes of this
Agreement, the term "DOCUMENTS" means (i) this Agreement; (ii) the Registration
Rights Agreement of even date herewith between the Company and Buyer, a copy of
which is annexed hereto as Exhibit D (the "REGISTRATION RIGHTS AGREEMENT");
(iii) the Certificate of Designation; (iv) the Warrants; and (v) the Escrow
Instructions.

     E. VALIDITY OF ISSUANCE OF THE SECURITIES. The Preferred Shares and the
Warrants as of the Closing Date, AND the Conversion Shares, the Dividend Shares
and the Warrant Shares upon their issuance in accordance with the Certificate of
Designation and the Warrants, respectively, will be validly issued and
outstanding, fully paid and nonassessable, and not subject to any preemptive
rights, rights of first refusal, tag-along rights, drag-along rights or other
similar rights.

     F. NON-CONTRAVENTION. Except as set forth on Schedule III.F., the execution
and delivery by the Company of the Documents, the issuance of the Securities,
and the consummation by the Company of the other transactions contemplated
hereby and thereby, including, without limitation, the filing of the Certificate
of Designation with the Nevada

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Secretary of State's office, do not, and compliance with the provisions of this
Agreement and other Documents will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of a material benefit under, or result in the creation of
any Lien (as defined in Section III.V.) upon any of the properties or assets of
the Company or any of its Subsidiaries under, or result in the termination of,
or require that any consent be obtained or any notice be given with respect to,
(i) the Certificate of Incorporation or By-Laws of the Company or the comparable
charter or organizational documents of any of its Subsidiaries, (ii) any loan or
credit agreement, note, bond, mortgage, indenture, lease, contract or other
agreement, instrument or permit applicable to the Company or any of its
Subsidiaries or their respective properties or assets, or (iii) any Law (as
defined in Section III.N.) applicable to, or any judgment, decree or order of
any court or government body having jurisdiction over, the Company or any of its
Subsidiaries or any of their respective properties or assets.

     G. APPROVALS. No authorization, approval or consent of any court or public
or governmental authority is required to be obtained by the Company for the
issuance and sale of the Preferred Shares or the Warrants (or the Conversion
Shares, the Dividend Shares or Warrant Shares) to Buyer as contemplated by this
Agreement, except such authorizations, approvals and consents as have been
obtained by the Company prior to the date hereof.

     H. COMMISSION FILINGS. The Company has properly and timely filed with the
Commission all reports, proxy statements, forms and other documents required to
be filed with the Commission under the Securities Act and the Exchange Act since
November 12, 1999 (the "COMMISSION FILINGS"). As of their respective dates, (i)
the Commission Filings complied in all material respects with the requirements
of the Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the Commission promulgated thereunder applicable to such
Commission Filings, and (ii) none of the Commission Filings contained at the
time of its filing any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements of the Company included in the
Commission Filings, as of the dates of such documents, were true and complete in
all material respects and complied with applicable accounting requirements and
the published rules and regulations of the Commission with respect thereto, were
prepared in accordance with generally accepted accounting principles in the
United States ("GAAP") (except in the case of unaudited statements permitted by
Form 10-Q under the Exchange Act) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and fairly
presented the consolidated financial position of the Company and its
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments that in the aggregate
are not material and to any other adjustment described therein).

     I. ABSENCE OF CERTAIN CHANGES. Since the Balance Sheet Date (as defined in
Section III.M.), there has not occurred any change, event or development in the
business, financial condition, prospects or results of operations of the Company
and the Subsidiaries, there has not existed any condition having or reasonably
likely to have a Material Adverse Effect, and the Company and the Subsidiaries
have conducted their respective businesses only in the ordinary course.

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     J. FULL DISCLOSURE. There is no fact known to the Company (other than
general economic or industry conditions known to the public generally) that has
not been fully disclosed in writing to Buyer that (i) reasonably could be
expected to have a Material Adverse Effect or (ii) reasonably could be expected
to materially and adversely affect the ability of the Company to perform its
obligations pursuant to the Documents.

     K. ABSENCE OF LITIGATION. Except as set forth on Schedule III.K., there are
(i) no suits, actions or proceedings pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries, (ii) no
complaints, lawsuits, charges or other proceedings pending or, to the knowledge
of the Company, threatened in any forum by or on behalf of any present or former
employee of the Company or any of its Subsidiaries, any applicant for employment
or classes of the foregoing alleging breach of any express or implied contract
of employment, any applicable law governing employment or the termination
thereof or other discriminatory, wrongful or tortious conduct in connection with
the employment relationship, and (iii) no judgments, decrees, injunctions or
orders of any court or other governmental entity or arbitrator outstanding
against the Company or any Subsidiary.

     L. ABSENCE OF EVENTS OF DEFAULT. Except as set forth in Schedule III.L., no
"EVENT OF DEFAULT" (as defined in any agreement or instrument to which the
Company is a party) and no event which, with notice, lapse of time or both,
would constitute an Event of Default (as so defined), has occurred and is
continuing.

     M. FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES. The Company has
delivered to Buyer true and complete copies of the audited balance sheet of the
Company and the Subsidiaries as at December 31, 1999, 1998 and 1997,
respectively, and the related audited statements of income, changes in
stockholders' equity and cash flows for the three fiscal years ended December
31, 1999, 1998 and 1997 including the related notes and schedules thereto
(collectively, the "FINANCIAL STATEMENTS"), and all management letters, if any,
from the Company's independent auditors relating to the dates and periods
covered by the Financial Statements. Each of the Financial Statements is
complete and correct in all material respects, has been prepared in accordance
with GAAP (subject, in the case of the interim Financial Statements, to normal
year end adjustments and the absence of footnotes), and fairly presents the
financial position, results of operations and cash flows of the Company as at
the dates and for the periods indicated. For purposes hereof, the audited
balance sheet of the Company as at December 31, 1999 is hereinafter referred to
as the "BALANCE SHEET" and December 31, 1999 is hereinafter referred to as the
"BALANCE SHEET DATE". The Company has no indebtedness, obligations or
liabilities of any kind (whether accrued, absolute, contingent or otherwise, and
whether due or to become due), which was not fully reflected in, reserved
against or otherwise described in the Balance Sheet or the notes thereto or
incurred in the ordinary course of business consistent with the Company's past
practices since the Balance Sheet Date.

     N. COMPLIANCE WITH LAWS; PERMITS. Each of the Company and its Subsidiaries
is in compliance with all laws, rules, regulations, codes, ordinances and
statutes (collectively, "LAWS") applicable to it or to the conduct of its
business. The Company possesses all material permits, approvals, authorizations,
licenses, certificates and consents from all public and governmental authorities
which are necessary to conduct its business.

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     O. RELATED PARTY TRANSACTIONS. Except as set forth on Schedule III.O.
hereto, neither the Company nor any of its officers, directors or "AFFILIATES"
(as such term is defined in Rule 12b-2 under the Exchange Act) nor any family
member of any officer, director or Affiliate of the Company has borrowed any
moneys from or has outstanding any indebtedness or other similar obligations to
the Company or any of the Subsidiaries. Except as set forth on Schedule III.O.
hereto, neither the Company nor any of its officers, directors or Affiliates nor
any family member of any officer, director or Affiliate of the Company (i) owns
any direct or indirect interest constituting more than a 1% equity (or similar
profit participation) interest in, or controls or is a director, officer,
partner, member or employee of, or consultant or lender to or borrower from, or
has the right to participate in the profits of, any person or entity which is
(x) a competitor, supplier, customer, landlord, tenant, creditor or debtor of
the Company or any Subsidiary, (y) engaged in a business related to the business
of the Company or any Subsidiary, or (z) a participant in any transaction to
which the Company or any Subsidiary is a party or (ii) is a party to any
contract, agreement, commitment or other arrangement with the Company or any
Subsidiary.

     P. INSURANCE. Each of the Company and the Subsidiaries maintains property
and casualty, general liability, workers' compensation, environmental hazard,
personal injury and other similar types of insurance with financially sound and
reputable insurers that is adequate and consistent with industry standards and
the Company's historical claims experience. None of the Company or the
Subsidiaries has received notice from, and none of them has knowledge of any
threat by, any insurer (that has issued any insurance policy to the Company or
any Subsidiary) that such insurer intends to deny coverage under or cancel,
discontinue or not renew any insurance policy presently in force. Q. SECURITIES
LAW MATTERS. Assuming the accuracy of the representations and warranties of
Buyer set forth in Article II hereof, the offer and sale by the Company of the
Securities is exempt from (i) the registration and prospectus delivery
requirements of the Securities Act and the rules and regulations of the
Commission thereunder and (ii) the registration and/or qualification provisions
of all applicable state securities and "blue sky" laws. Other than pursuant to
an effective registration statement under the Securities Act, the Company has
not issued, offered or sold the Preferred Shares or any shares of Common Stock
(including for this purpose any securities of the same or a similar class as the
Preferred Shares or Common Stock, or any securities convertible into or
exchangeable or exercisable for the Preferred Shares or Common Stock or any such
other securities) within the one-year period next preceding the date hereof,
except as disclosed on Schedule III.

     Q. hereto, and the Company shall not directly or indirectly take, and shall
not permit any of its directors, officers or Affiliates directly or indirectly
to take, any action (including, without limitation, any offering or sale to any
person or entity of the Preferred Shares or shares of Common Stock) which will
make unavailable the exemption from Securities Act registration being relied
upon by the Company for the offer and sale to Buyer of the Preferred Shares and
the Warrants (and the Conversion Shares, the Dividend Shares and the Warrant
Shares) as contemplated by this Agreement. No form of general solicitation or
advertising has been used or authorized by the Company or any of its officers,
directors or Affiliates in connection with the offer or sale of the Preferred
Shares and the Warrants (and the Conversion Shares, the Dividend Shares and the
Warrant Shares) as contemplated by this Agreement or any other agreement to
which the Company is a party.

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          R. ENVIRONMENTAL MATTERS.

          Except as set forth on Schedule III.R. hereto:

          1. The Company, the Subsidiaries and their respective operations are
     in compliance with all applicable Environmental Laws and all permits
     (including terms, conditions, and limitations therein) issued pursuant to
     Environmental Laws or otherwise;

          2. Each of the Company and the Subsidiaries has all permits, licenses,
     waivers, exceptions, and exemptions required under all applicable
     Environmental Laws necessary to operate its business;

          3. None of the Company or the Subsidiaries is the subject of any
     outstanding written order of or agreement with any governmental authority
     or person respecting (i) Environmental Laws or permits, (ii) Remedial
     Action or (iii) any Release or threatened Release of Hazardous Materials;

          4. None of the Company or the Subsidiaries has received any written
     communication alleging that it may be in violation of any Environmental Law
     or any permit issued pursuant to any Environmental Law, or may have any
     liability under any Environmental Law;

          5. None of the Company or the Subsidiaries has any liability,
     contingent or otherwise, in connection with any presence, treatment,
     storage, disposal or Release of any Hazardous Materials whether on property
     owned or operated by the Company or any Subsidiary or property of third
     parties, and none of the Company or the Subsidiaries has transported, or
     arranged for transportation of, any Hazardous Materials for treatment or
     disposal on any property;

          6. There are no investigations of the business, operations, or
     currently or previously owned, operated or leased property of the Company
     or any Subsidiary pending or threatened which could lead to the imposition
     of any case or liability pursuant to any Environmental Law;

          7. There is not located at any of the properties owned or operated by
     the Company or any Subsidiary any (A) underground storage tanks, (B)
     asbestos-containing material or (C) equipment containing polychlorinated
     biphenyls;

          8. Each of the Company and the Subsidiaries has provided to Buyer all
     environmentally related assessments, audits, studies, reports, analyses,
     and results of investigations that have been performed with respect to the
     currently or previously owned, leased or operated properties or activities
     of the Company and such Subsidiaries;

          9. There are no liens arising under or pursuant to any Environmental
     Law on any real property owned, operated, or leased by the Company or any
     Subsidiary, and no action of any governmental authority has been taken or,
     to the knowledge of the Company, is in process of being taken which could
     subject any of such properties to such liens, and none of the Company or
     the Subsidiaries has been or is expected to be required

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     to place any notice or restriction relating to the presence of Hazardous
     Material at any real property owned, operated, or leased by it in any deed
     to such property;

          10. Neither the Company nor any of the Subsidiaries owns, operates, or
     leases any hazardous waste generation, treatment, storage, or disposal
     facility, as such terms are used pursuant to the RCRA and related or
     analogous state, local, or foreign law. None of the properties owned,
     operated, or leased by the Company, any of the Subsidiaries or any
     predecessor thereof are now, or were in the past, used in any part as a
     dump, landfill, or disposal site, and neither the Company, any of the
     Subsidiaries nor any predecessor of any of them has filled any wetlands;

          11. The purchase that is the subject of this Agreement will not
     require any governmental approvals under Environmental Laws, including
     those that are triggered by sales or transfers of businesses or real
     property, including, as examples and without limitation, the New Jersey
     Industrial Site Recovery Act, N.J. Stat. 13:1K-7 et seq., and the
     Connecticut Transfer of Establishments Act, Conn. Gen. Stat. Section
     22a-134 et seq.;

          12. There is no currently existing requirement or requirement to be
     imposed in the future by any Environmental Law or Environmental Permit
     which could result in the incurrence of a cost that could be reasonably
     expected to have a Material Adverse Effect; and

          13. Each of the Company and each of the Subsidiaries has disclosed to
     Buyer all other acts or conditions that could result in any costs or
     liabilities under Environmental Laws.

     For purposes of this Section III.R.:

     "ENVIRONMENTAL LAW" means any foreign, federal, state or local statute,
regulation, ordinance, or common law as now or hereafter in effect in any way
relating to the protection of human health, safety or welfare or the environment
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, the Hazardous Materials Transportation Act, the
Resource Conservation and Recovery Act ("RCRA"), the Clean Water Act, the Clean
Air Act, the Toxic Substances Control Act, the Federal Insecticide, Fungicide,
and Rodenticide Act and the Occupational Safety and Health Act, and the
regulations promulgated pursuant to any of them;

     "HAZARDOUS MATERIAL" means any substance that is listed, classified or
regulated pursuant to any Environmental Law, including petroleum, gasoline, and
any other petroleum product, by-product, fraction or derivative, asbestos or
asbestos-containing material, lead-containing paint, water, or plumbing,
polychlorinated biphenyls, radioactive materials and radon;

     "RELEASE" means any placement, release, spill, filtration, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, migration,
or leaching to, through, or under the indoor or outdoor environment, or into,
through, under, or out of any property; and

                                      -10-
<PAGE>   11

     "REMEDIAL ACTION" means any action to (x) clean up, remove, remediate,
treat or in any other way address any Hazardous Material; (y) prevent or contain
the Release of any Hazardous Material; or (z) perform studies and investigations
or post-remedial monitoring and care in relation to (x) or (y) above.

     S. LABOR MATTERS. Neither the Company nor any of the Subsidiaries is party
to any labor or collective bargaining agreement, and there are no labor or
collective bargaining agreements which pertain to any employees of the Company
or any Subsidiary. No employees of the Company or any of the Subsidiaries are
represented by any labor organization and none of such employees has made a
pending demand for recognition, and there are no representation proceedings or
petitions seeking a representation proceeding presently pending or, to the
Company's knowledge, threatened to be brought or filed, with the National Labor
Relations Board or other labor relations tribunal. There is no organizing
activity involving the Company or any Subsidiary pending or to the Company's
knowledge, threatened by any labor organization or group of employees of the
Company or any of the Subsidiaries. There are no (i) strikes, work stoppages,
slowdowns, lockouts or arbitrations or (ii) material grievances or other labor
disputes pending or, to the knowledge of the Company, threatened against or
involving the Company or any of the Subsidiaries. There are no unfair labor
practice charges, grievances or complaints pending or, to the knowledge of the
Company, threatened by or on behalf of any employee or group of employees of the
Company or any of the Subsidiaries.

     T. ERISA MATTERS. All Plans maintained by the Company or any of its
Subsidiaries and ERISA Affiliates are listed in Schedule III.T. and copies of
all documentation relating to such Plans (including, but not limited to, copies
of written Plans, written descriptions of oral Plans, summary plan descriptions,
trust agreements, the three most recent annual returns, employee communications
and IRS determination letters) have been delivered to or made available for
review by the Buyer. Each Plan has at all times been maintained and administered
in all material respects in accordance with its terms and the requirements of
applicable law, including ERISA and the Code, and each Plan intended to qualify
under section 401(a) of the Code has at all times since its adoption been so
qualified, and each trust which forms a part of any such plan has at all times
since its adoption been tax-exempt under section 501(a) of the Code. The Company
and each of its Subsidiaries and ERISA Affiliates are in compliance in all
material respects with all provisions of ERISA applicable to it. No Reportable
Event has occurred, been waived or exists as to which the Company or any of its
Subsidiaries and ERISA Affiliates was required to file a report with the PBGC,
and the present value of all liabilities under each Pension Plan (based on those
assumptions used to fund such Plans) listed in Schedule III.T. did not, as of
the most recent annual valuation date applicable thereto, exceed the value of
the assets of such Pension Plan. None of the Company, its Subsidiaries and ERISA
Affiliates has incurred, or reasonably expects to incur, any Withdrawal
Liability with respect to any Multi-employer Plan that could result in a
Material Adverse Effect. None of the Company, its Subsidiaries and ERISA
Affiliates has received any notification that any Multi-employer Plan is in
reorganization or has been terminated within the meaning of Title IV of ERISA,
and no Multi-employer Plan is reasonably expected to be in reorganization or
termination where such reorganization or termination has resulted or could
reasonably be expected to result in increases to the contributions required to
be made to such Plan or otherwise. No direct, contingent or secondary liability
has been incurred or is expected to be incurred by the Company or any of its
Subsidiaries under Title IV of ERISA to any party with respect to any Plan, or
with respect to

                                      -11-
<PAGE>   12

any other Plan presently or heretofore maintained or contributed to by any ERISA
Affiliate. Neither the Company nor any of its Subsidiaries and ERISA Affiliates
has incurred any liability for any tax imposed under sections 4971 through 4980B
of the Code or civil liability under section 502(i) or (l) of ERISA. No suit,
action or other litigation or any other claim which could reasonably be expected
to result in a material liability or expense to the Company or any of its
Subsidiaries or ERISA Affiliates (excluding claims for benefits incurred in the
ordinary course of plan activities) has been brought or, to the knowledge of the
Company, threatened against or with respect to any Plan and there are no facts
or circumstances known to the Company or any of its Subsidiaries or ERISA
Affiliates that could reasonably be expected to give rise to any such suit,
action or other litigation. All contributions to Plans that were required to be
made under such Plans have been made, and all benefits accrued under any
unfunded Plan have been paid, accrued or otherwise adequately reserved in
accordance with GAAP, all of which accruals under unfunded Plans are as
disclosed in Schedule III.T., and the Company, its Subsidiaries and ERISA
Affiliates have each performed all material obligations required to be performed
under all Plans. The execution, delivery and performance of this Agreement and
the other Documents and the consummation of the transactions contemplated hereby
and thereby (including, without limitation, the offer, issue and sale by the
Company, and the purchase by the Buyer, of the Preferred Shares, the Conversion
Shares, the Warrants, the Warrant Shares and Dividend Shares) will not involve
any "prohibited transaction" within the meaning of ERISA or the Code with
respect to any Plan.

     As used in this Agreement:

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

     "ERISA" means the Employee Retirement Income Security Act of 1974, or any
successor statute, together with the regulations thereunder, as the same may be
amended from time to time.

     "ERISA AFFILIATE" means any trade or business (whether or not incorporated)
that was, is or hereafter may become, a member of a group of which the Company
is a member and which is treated as a single employer under section 414 of the
Code.

     "MULTI-EMPLOYER PLAN" means a multi-employer plan as defined in section
4001(a)(3) of ERISA to which the Company or any ERISA Affiliate (other than one
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of section
414 of the Code) is making or accruing an obligation to make contributions, or
has within any of the preceding six plan years made or accrued an obligation to
make contributions.

     "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.

     "PENSION PLAN" means any pension plan (other than a Multi-employer Plan)
subject to the provision of Title IV of ERISA or section 412 of the Code that is
maintained for employees of the Company or any of its Subsidiaries, or any ERISA
Affiliate.

     "PLAN" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock

                                      -12-
<PAGE>   13

appreciation rights, phantom stock, leave of absence, layoff, vacation, day or
dependent care, legal services, cafeteria, life, health, accident, disability,
workmen's compensation or other insurance, severance, separation or other
employee benefit plan, practice, policy or arrangement of any kind, whether
written or oral, or whether for the benefit of a single individual or more than
one individual including, but not limited to, any "employee benefit plan" within
the meaning of section 3(3) of ERISA, including any Pension Plan.

     "REPORTABLE EVENT" means any reportable event as defined in section 4043(b)
of ERISA or the regulations issued thereunder with respect to a Plan.

     "WITHDRAWAL LIABILITY" means liability to a Multi-employer Plan as a result
of a complete or partial withdrawal from such Multi-employer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

     U. TAX MATTERS.

          1. The Company has filed all material Tax Returns which it is required
     to file under applicable Laws; all such Tax Returns are true and accurate
     in all material respects and have been prepared in compliance with all
     applicable Laws; the Company has paid all Taxes due and owing by it
     (whether or not such Taxes are required to be shown on a Tax Return) and
     has withheld and paid over to the appropriate taxing authorities all Taxes
     which it is required to withhold from amounts paid or owing to any
     employee, stockholder, creditor or other third parties; and since the
     Balance Sheet Date, the charges, accruals and reserves for Taxes with
     respect to the Company (including any provisions for deferred income taxes)
     reflected on the books of the Company are adequate to cover any Tax
     liabilities of the Company if its current tax year were treated as ending
     on the date hereof.

          2. No claim has been made by a taxing authority in a jurisdiction
     where the Company does not file tax returns that the Company is or may be
     subject to taxation by such jurisdiction. There are no foreign, federal,
     state or local tax audits or administrative or judicial proceedings pending
     or being conducted with respect to the Company; no information related to
     Tax matters has been requested by any foreign, federal, state or local
     taxing authority; and, except as disclosed above, no written notice
     indicating an intent to open an audit or other review has been received by
     the Company from any foreign, federal, state or local taxing authority.
     There are no material unresolved questions or claims concerning the
     Company's Tax liability. The Company (A) has not executed or entered into a
     closing agreement pursuant to section 7121 of the Code or any predecessor
     provision thereof or any similar provision of state, local or foreign law;
     or (B) has not agreed to or is required to make any adjustments pursuant to
     section 481(a) of the Code or any similar provision of state, local or
     foreign law by reason of a change in accounting method initiated by the
     Company or any of its subsidiaries or has any knowledge that the IRS has
     proposed any such adjustment or change in accounting method, or has any
     application pending with any taxing authority requesting permission for any
     changes in accounting methods that relate to the business or operations of
     the Company. The Company has not been a United States real property

                                      -13-
<PAGE>   14

     holding corporation within the meaning of section 897(c)(2) of the Code
     during the applicable period specified in section 897(c)(1)(A)(ii) of the
     Code.

     3. The Company has not made an election under section 341(f) of the Code.
The Company is not liable for the Taxes of another person that is not a
subsidiary of the Company under (A) Treas. Reg. Section 1.1502-6 (or comparable
provisions of state, local or foreign law), (B) as a transferee or successor,
(C) by contract or indemnity or (D) otherwise. The Company is not a party to any
tax sharing agreement. The Company has not made any payments, is not obligated
to make payments and is not a party to an agreement that could obligate it to
make any payments that would not be deductible under section 280G of the Code.

     As used in this Agreement:

     "IRS" means the United States Internal Revenue Service.

     "TAX" or "TAXES" means federal, state, county, local, foreign, or other
income, gross receipts, ad valorem, franchise, profits, sales or use, transfer,
registration, excise, utility, environmental, communications, real or personal
property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum, estimated and other taxes of any kind whatsoever (including, without
limitation, deficiencies, penalties, additions to tax, and interest attributable
thereto) whether disputed or not.

     "TAX RETURN" means any return, information report or filing with respect to
Taxes, including any schedules attached thereto and including any amendment
thereof.

     V. PROPERTY. Except as set forth on Schedule III.V., each of the Company
and the Subsidiaries has good and marketable title to all of its assets and
properties material to the conduct of its business, free and clear of any liens,
pledges, security interests, claims, encumbrances or other restrictions of any
kind (collectively, "LIENS"). With respect to any assets or properties it
leases, each of the Company and its Subsidiaries holds a valid and subsisting
leasehold interest therein, free and clear of any Liens, is in compliance, in
all material respects, with the terms of the applicable lease, and enjoys
peaceful and undisturbed possession under such lease. All of the assets and
properties of the Company and its Subsidiaries that are material to the conduct
of business as presently conducted or as proposed to be conducted by it are in
good operating condition and repair. The inventory of each of the Company and
its Subsidiaries is in good and marketable condition, does not include any
material quantity of items which are obsolete, damaged or slow moving, and is
salable (or may be leased) in the normal course of business as currently
conducted by it.

     W. INTELLECTUAL PROPERTY. The Company owns or possesses adequate and
enforceable rights to use all patents, patent applications, trademarks,
trademark applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures) and other similar rights and proprietary knowledge (collectively,
"INTANGIBLES") necessary for the conduct of its business as now being conducted
including, but

                                      -14-
<PAGE>   15

not limited to, those described on Schedule III.W. hereto. Except as set forth
on Schedule III.W, the Company has all right, title and interest in all of the
Intangibles, free and clear of any and all Liens. The Company is not infringing
upon or in conflict with any right of any other person with respect to any
Intangibles. Except as disclosed on Schedule III.W. hereto, (i) no claims have
been asserted by any individual, partnership, corporation, unincorporated
organization or association, limited liability company, trust or other entity
(collectively, a "PERSON") contesting the validity, enforceability, use or
ownership of any Intangibles, and the Company has no knowledge of any basis for
such claim, and (ii) neither the Company nor the Subsidiaries has any knowledge
of infringement or misappropriation of the Intangibles by any third party.

     X. CONTRACTS. All contracts, agreements, notes, instruments, franchises,
leases, licenses, commitments, arrangements or understandings, written or oral
(collectively, "CONTRACTS") which are material to the business and operations of
the Company and the Subsidiaries are in full force and effect and constitute
legal, valid and binding obligations of the Company and the Subsidiaries and, to
the best knowledge of the Company, the other parties thereto; the Company and
the Subsidiaries and, to the best knowledge of the Company, each other party
thereto, have performed in all material respects all obligations required to be
performed by them under the Contracts, and no material violation or default
exists in respect thereof, nor any event that with notice or lapse of time, or
both, would constitute a default thereof, on the part of the Company and the
Subsidiaries or, to the best knowledge of the Company, any other party thereto;
none of the Contracts is currently being renegotiated; and the validity,
effectiveness and continuation of all Contracts will not be materially adversely
affected by the transactions contemplated by this Agreement.

     Y. REGISTRATION RIGHTS. Except for the Shaar Fund, Ltd., and as set forth
on Schedule III.Y., no Person has, and as of the Closing (as defined in Article
VII), no Person shall have, any demand, "piggy-back" or other rights to cause
the Company to file any registration statement under the Securities Act,
relating to any of its securities or to participate in any such registration
statement.

     Z. DIVIDENDS. The timely payment of dividends on the Preferred Shares as
specified in the Certificate of Designation is not prohibited by the Certificate
of Incorporation or By-Laws of the Company or any agreement, Contract, document
or other undertaking to which the Company or any of the Subsidiaries is a party.

     AA. INVESTMENT COMPANY ACT. Neither the Company nor any of the Subsidiaries
is an "investment company" within the meaning of the Investment Company Act of
1940, as amended (the "INVESTMENT COMPANY ACT"), nor is the Company nor any of
the Subsidiaries directly or indirectly controlled by or acting on behalf of any
Person which is an "investment company" within the meaning of the Investment
Company Act.

     BB. BUSINESS PLAN. Any business information of the Company previously
submitted to Buyer in any form, including the projections contained therein, was
prepared by the senior management of the Company in good faith and is based on
assumptions that the Company believes are reasonable. The Company is not aware
of any fact or condition that could reasonably be expected to result in the
Company not achieving the results described in such business plan.

                                      -15-
<PAGE>   16

     CC. YEAR 2000 COMPLIANCE. The Company has reviewed its products, business
and operations that could be adversely affected by the risk that computer
applications used by the Company and the Subsidiaries may be unable to
recognize, and properly perform date-sensitive functions involving, dates prior
to and after December 31, 1999 (the "YEAR 2000 PROBLEM"). The Company believes
its internal information and business systems will be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000. In
addition, the Company has surveyed those vendors, suppliers and other third
parties (collectively, the "OUTSIDE PARTIES") with which the Company or any of
the Subsidiaries do business and whose failure to adequately address the Year
2000 Problem could reasonably be expected to adversely affect the business and
operations of the Company or any of the Subsidiaries. Based upon the
aforementioned internal review and surveys of the Outside Parties as of the date
of this Agreement, the Year 2000 Problem has not resulted in, and is not
reasonably expected to have, a Material Adverse Effect.

     DD. INTERNAL CONTROLS AND PROCEDURES. The Company maintains accurate books
and records and internal accounting controls that provide reasonable assurance
that (i) all transactions to which the Company or each of the Subsidiaries is a
party or by which its properties are bound are executed with management's
authorization; (ii) the reported accountability of the Company's and the
Subsidiaries' assets is compared with existing assets at regular intervals;
(iii) access to the Company's and the Subsidiaries' assets is permitted only in
accordance with management's authorization; and (iv) all transactions to which
any of the Company and the Subsidiaries is a party or by which its properties
are bound are recorded as necessary to permit preparation of the financial
statements of the Company in accordance with GAAP.

     EE. PAYMENTS AND CONTRIBUTIONS. Neither the Company nor any of its
Subsidiaries nor any of their respective directors, officers or, to their
respective knowledge, other employees has (i) used any company funds for any
unlawful contribution, endorsement, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct or indirect
unlawful payment of company funds to any foreign or domestic government official
or employee, (iii) violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any bribe, rebate,
payoff, influence payment, kickback or other similar payment to any person with
respect to Company matters.

     FF. NO MISREPRESENTATION. No representation or warranty of the Company
contained in this Agreement or any of the other Documents, any schedule, annex
or exhibit hereto or thereto or any agreement, instrument or certificate
furnished by the Company to Buyer pursuant to this Agreement contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.

     GG. FINDER'S FEE. There is no finder's fee, brokerage commission or like
payment in connection with the transactions contemplated by this Agreement for
which Buyer is liable or responsible.

                                      -16-
<PAGE>   17

IV. CERTAIN COVENANTS AND ACKNOWLEDGMENTS

     A. RESTRICTIVE LEGEND. Buyer acknowledges and agrees that, upon issuance
pursuant to this Agreement, the Securities (including any Dividends Shares,
Conversion Shares or the Warrant Shares) shall have endorsed thereon a legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of the Preferred Shares, the Warrant Shares and the Conversion
Shares until such legend has been removed):

     "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
     1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
     STATE, AND ARE BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE
     REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THESE
     SECURITIES MAY NOT BE SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
     REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
     EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR SUCH
     OTHER LAWS."

     B. FILINGS. The Company shall make all necessary Commission Filings and
"blue sky" filings required to be made by the Company in connection with the
sale of the Securities to Buyer as required by all applicable Laws, and shall
provide a copy thereof to Buyer promptly after such filing.

     C. REPORTING STATUS. So long as Buyer beneficially owns any of the
Securities, the Company shall timely file all reports required to be filed by it
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.

     D. USE OF PROCEEDS. The Company shall use the proceeds from the sale of the
Securities (net of amounts paid by the Company for Buyer's out-of-pocket costs
and expenses, whether or not accounted for or incurred in connection with the
transactions contemplated by this Agreement (including the fees and
disbursements of Buyer's legal counsel), and finder's fees in connection with
such sale) solely for general corporate and working capital purposes.

     E. LISTING. Except to the extent the Company lists its Common Stock on The
New York Stock Exchange, the American Stock Exchange or The Nasdaq Stock Market,
the Company shall use its best efforts to maintain its listing of the Common
Stock on OTCBB. If the Common Stock is delisted from OTCBB, the Company will use
its best efforts to list the Common Stock on the most liquid national securities
exchange or quotation system that the Common Stock is qualified to be listed on.

     F. RESERVED CONVERSION SHARES. The Company at all times from and after the
date hereof shall have such number of shares of Common Stock duly and validly
authorized and reserved for issuance as shall be sufficient for the conversion
in full of, and the payment of dividends on, the Preferred Shares and the
exercise in full of the Warrants.

                                      -17-
<PAGE>   18

     G. RIGHT OF FIRST REFUSAL. If, during the period commencing on the date
hereof and ending on the earlier of (i) the third anniversary of the Closing
Date and (ii) the date all the Preferred Shares are either redeemed or converted
into Common Stock (the "RIGHT OF FIRST REFUSAL PERIOD"), the Company should
propose (the "PROPOSAL") to issue Common Stock or securities convertible into
Common Stock at a price less than the Current Market Price (as defined in the
Certificate of Designation), or debt at less than par value or having an
effective annual interest rate in excess of 9.9% (each a "RIGHT OF FIRST REFUSAL
SECURITY" and collectively, the "RIGHT OF FIRST REFUSAL SECURITIES"), in each
case on the date of issuance the Company shall be obligated to offer such Right
of First Refusal Securities to Buyer on the terms set forth in the Proposal (the
"OFFER") and Buyer shall have the right, but not the obligation, to accept such
Offer on such terms. The Company shall provide written notice to Buyer of any
Proposal, setting forth in full the terms and conditions thereof, and Buyer
shall then have 5 business days to accept or reject the Offer in writing. If the
Company issues any Right of First Refusal Securities during the Right of First
Refusal Period but fails to: (i) notify Buyer of the Proposal, (ii) offer Buyer
the opportunity to complete the transaction as set forth in the Proposal, or
(iii) enter into and consummate an agreement to issue such Right of First
Refusal Securities to Buyer on the terms and conditions set forth in the
Proposal, after Buyer has accepted the Offer, then the Company shall pay to
Buyer, as liquidated damages, an amount equal to 10% of the amount paid to the
Company for the Right of First Refusal Securities. The foregoing Right of First
Refusal is and shall be senior in right to any other right of first refusal
issued by the Company to any other Person. Notwithstanding the foregoing, the
Buyer acknowledges that the Company has granted rights similar to the rights
granted to the Buyer pursuant to this paragraph G to one other purchaser of the
Company's Series A 6% Convertible Preferred Shares and in the event that, in
addition to the Buyer, such other purchaser wishes to exercise such first
refusal rights to purchase the applicable securities, the Company shall allocate
such securities among the Buyer and such other purchaser on a pro-rata basis,
based on the number of such securities each such person or entity wishes to
purchase and the number of Series A 6% Convertible Preferred Shares then owned
by each such person or entity.

     H. INFORMATION. Each of the parties hereto acknowledges and agrees that
Buyer shall not be provided with, nor be given access to, any material
non-public information relating to the Company or any of the Subsidiaries.

     I. EXEMPTION FROM INVESTMENT COMPANY ACT. The Company shall conduct its
business, and shall cause the Subsidiaries to conduct their businesses, in such
a manner that neither the Company nor any Subsidiary shall become an "investment
company" within the meaning of the Investment Company Act.

     J. ACCOUNTING AND RESERVES. The Company shall maintain a standard and
uniform system of accounting and shall keep proper books and records and
accounts in which full, true and correct entries shall be made of its
transactions, all in accordance with GAAP applied on a consistent basis through
all periods, and shall set aside on such books for each fiscal year all such
reserves for depreciation, obsolescence, amortization, bad debts and other
purposes in connection with its operations as are required by such principles so
applied.

     K. TRANSACTIONS WITH AFFILIATES. Neither the Company nor any of its
Subsidiaries shall, directly or indirectly, enter into any transaction or
agreement with any

                                      -18-
<PAGE>   19

stockholder, officer, director or Affiliate of the Company or family member of
any officer, director or Affiliate of the Company, unless the transaction or
agreement is (i) reviewed and approved by a majority of Disinterested Directors
(as defined below) and (ii) on terms no less favorable to the Company or the
applicable Subsidiary than those obtainable from a non-affiliated person. A
"DISINTERESTED DIRECTOR" shall mean a director of the Company who is not and has
not been an officer or employee of the Company and who is not a member of the
family of, controlled by or under common control with, any such officer or
employee.

     L. CERTAIN RESTRICTIONS. Except as otherwise expressly provided in Section
4(e) of the Certificate of Designation, so long as any Preferred Shares are
outstanding, no dividends shall be declared or paid or set apart for payment nor
shall any other distribution be declared or made upon Junior Securities (as
defined in the Certificate of Designation), nor shall any Junior Securities be
redeemed, purchased or otherwise acquired (other than a redemption, purchase or
other acquisition of shares of Common Stock made for purposes of an employee
incentive or benefit plan (including a stock option plan) of the Company or any
Subsidiary, for any consideration by the Company, directly or indirectly, nor
shall any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock.

                         V. TRANSFER AGENT INSTRUCTIONS

     A. The Company undertakes and agrees that no instruction other than the
instructions referred to in this Article V and customary stop transfer
instructions prior to the registration and sale of the Common Stock pursuant to
an effective Securities Act registration statement shall be given to its
transfer agent for the Common Stock and that the Conversion Shares, the Dividend
Shares and the Warrant Shares shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this
Agreement, the Registration Rights Agreement and applicable law. Nothing
contained in this Section V.A. shall affect in any way Buyer's obligations and
agreement to comply with all applicable securities laws upon resale of such
Common Stock. If, at any time, Buyer provides the Company with an opinion of
counsel reasonably satisfactory to the Company that registration of the resale
by Buyer of such Common Stock is not required under the Securities Act and that
the removal of restrictive legends is permitted under applicable law, the
Company shall permit the transfer of such Common Stock and promptly instruct the
Company's transfer agent to issue one or more certificates for Common Stock
without any restrictive legends endorsed thereon.

     B. Buyer shall have the right to convert the Preferred Shares by
telecopying an executed and completed Notice of Conversion (as defined in the
Certificate of Designation) to the Company. Each date on which a Notice of
Conversion is telecopied to and received by the Company in accordance with the
provisions hereof shall be deemed a Conversion Date (as defined in the
Certificate of Designation). The Company shall transmit the certificates
evidencing the shares of Common Stock issuable upon conversion of any Preferred
Shares (together with certificates evidencing any Preferred Shares not being so
converted) to Buyer via express courier, by electronic transfer or otherwise,
within five business days after receipt by the Company of the Notice of
Conversion (the "DELIVERY DATE"). Within 30 days after Buyer delivers the Notice
of Conversion to the Company, Buyer shall deliver to the Company a certificate
or certificates evidencing the Preferred Shares being converted.

                                      -19-
<PAGE>   20

     C. Buyer shall have the right to purchase shares of Common Stock pursuant
to exercise of the Warrants in accordance with its applicable terms of the
Warrants. The last date that the Company may deliver shares of Common Stock
issuable upon any exercise of Warrants is referred to herein as the "WARRANT
DELIVERY DATE."

     D. The Company understands that a delay in the issuance of the shares of
Common Stock issuable in lieu of cash dividends on the Preferred Shares or upon
the conversion of the Preferred Shares or exercise of the Warrants beyond the
applicable Dividend Payment Due Date (as defined in the Certificate of
Designation), Delivery Date or Warrant Delivery Date could result in economic
loss to Buyer. As compensation to Buyer for such loss (and not as a penalty),
the Company agrees to pay to Buyer for late issuance of Common Stock issuable in
lieu of cash dividends on the Preferred Shares or upon conversion of the
Preferred Shares or exercise of the Warrants in accordance with the following
schedule (where "NO. BUSINESS DAYS" is defined as the number of business days
beyond five days from the Dividend Payment Due Date, the Delivery Date or the
Warrant Delivery Date, as applicable):

<TABLE>
<CAPTION>
                               COMPENSATION FOR EACH 10 SHARES
                              OF PREFERRED SHARES NOT CONVERTED
                               TIMELY OR 500 SHARES OF COMMON
                                STOCK ISSUABLE IN PAYMENT OF
                                DIVIDENDS OR UPON EXERCISE OF
    NO. BUSINESS DAYS           WARRANTS NOT ISSUED TIMELY
-----------------------       --------------------------------
<S>                            <C>
           1                               $   25
           2                                   50
           3                                   75
           4                                  100
           5                                  125
           6                                  150
           7                                  175
           8                                  200
           9                                  225
           10                                 250
       more than 10         $250 + $100 for each Business Day
                            Late beyond 10 days
</TABLE>

The Company shall pay to Buyer the compensation described above by the transfer
of immediately available funds upon Buyer's demand. Nothing herein shall limit
Buyer's right to pursue actual damages for the Company's failure to issue and
deliver Common Stock to Buyer. In addition to any other remedies which may be
available to Buyer, in the event the Company fails for any reason to deliver
such shares of Common Stock within five business days after the relevant
Dividend Payment Due Date, Delivery Date or Warrant Delivery Date, as
applicable, Buyer shall be entitled to rescind the relevant Notice of Conversion
or exercise of Warrants by delivering a notice to such effect to the Company
whereupon the Company and Buyer shall each be restored to their respective
original positions immediately prior to delivery of such Notice of Conversion on
delivery.

                                      -20-
<PAGE>   21

                           VI. DELIVERY INSTRUCTIONS

     The Securities shall be delivered by the Company to the Escrow Agent
pursuant to Section I.B. hereof on a "delivery-against-payment basis" at the
Closing.

                               VII. CLOSING DATE

     The date and time (the "CLOSING DATE") of the issuance and sale of the
Preferred Shares and the Warrants (the "CLOSING") shall be May 4, 2000 or such
other date as shall be mutually agreed upon in writing. The issuance and sale of
the Securities shall occur on the Closing Date at the offices of the Escrow
Agent. Notwithstanding anything to the contrary contained herein, the Escrow
Agent shall not be authorized to release to the Company the Purchase Price or to
Buyer the certificate(s) (I/N/O Buyer or I/N/O Buyer's nominee) evidencing the
Securities being purchased by Buyer unless the conditions set forth in Sections
VIII.C. and IX.H. hereof have been satisfied.

                  VIII. CONDITIONS TO THE COMPANY'S OBLIGATIONS

     Buyer understands that the Company's obligation to sell the Securities on
the Closing Date to Buyer pursuant to this Agreement is conditioned upon:

     A. Delivery by Buyer to the Escrow Agent of the Purchase Price;

     B. The accuracy on the Closing Date of the representations and warranties
of Buyer contained in this Agreement as if made on the Closing Date (except for
representations and warranties which, by their express terms, speak as of and
relate to a specified date, in which case such accuracy shall be measured as of
such specified date) and the performance by Buyer in all material respects on or
before the Closing Date of all covenants and agreements of Buyer required to be
performed by it pursuant to this Agreement on or before the Closing Date; and

     C. There shall not be in effect any Law or order, ruling, judgment or writ
of any court or public or governmental authority restraining, enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement.

                     IX. CONDITIONS TO BUYER'S OBLIGATIONS

     The Company understands that Buyer's obligation to purchase the Securities
on the Closing Date pursuant to this Agreement is conditioned upon:

     A. Delivery by the Company to Buyer of evidence that the Certificate of
Designation has been filed and is effective;

     B. Delivery by the Company to the Escrow Agent of one or more certificates
(I/N/O Buyer or I/N/O Buyer's nominee) evidencing the Securities to be purchased
by Buyer pursuant to this Agreement;

                                      -21-
<PAGE>   22

     C. The accuracy on the Closing Date of the representations and warranties
of the Company contained in this Agreement as if made on the Closing Date
(except for representations and warranties which, by their express terms, speak
as of and relate to a specified date, in which case such accuracy shall be
measured as of such specified date) and the performance by the Company in all
respects on or before the Closing Date of all covenants and agreements of the
Company required to be performed by it pursuant to this Agreement on or before
the Closing Date, all of which shall be confirmed to Buyer by delivery of the
certificate of the chief executive officer of the Company to that effect;

     D. Buyer having received an opinion of counsel for the Company, dated the
Closing Date, in form, scope and substance reasonably satisfactory to Buyer as
to the matters set forth in Annex A;

     E. There not having occurred (i) any general suspension of trading in, or
limitation on prices listed for, the Common Stock on OTCBB, (ii) the declaration
of a banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the United
States or any of its territories, protectorates or possessions, or (iv) in the
case of the foregoing existing at the date of this Agreement, a material
acceleration or worsening thereof;

     F. There not having occurred any event or development, and there being in
existence no condition, having or which reasonably and foreseeably could have a
Material Adverse Effect;

     G. The Company shall have delivered to Buyer (as provided in the Escrow
Instructions) reimbursement of Buyer's out-of-pocket costs and expenses, whether
or not accounted for or incurred in connection with the transactions
contemplated by this Agreement (including the fees and disbursements of Buyer's
legal counsel), of $5,000.00;

     H. There shall not be in effect any Law, order, ruling, judgment or writ of
any court or public or governmental authority restraining, enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement;

     I. Delivery by the Company of irrevocable instructions to the Company's
transfer agent to reserve 350,000 shares of Common Stock for issuance of the
Conversion Shares and the Warrant Shares;

     J. The Company shall have obtained all consents, approvals or waivers from
governmental authorities and third persons necessary for the execution, delivery
and performance of the Documents and the transactions contemplated thereby, all
without material cost to the Company; and

     K. Buyer shall have received such additional documents, certificates,
payment, assignments, transfers and other delivers, as it or its legal counsel
may reasonably request and as are customary to effect a closing of the matters
herein contemplated.

                                      -22-
<PAGE>   23

                                 X. TERMINATION

     A. TERMINATION BY MUTUAL WRITTEN CONSENT. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned, for any reason and at
any time prior to the Closing Date, by the mutual written consent of the Company
and Buyer.

     B. TERMINATION BY THE COMPANY OR BUYER. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned by action of the
Company or Buyer if (i) the Closing shall not have occurred at or prior to 5:00
p.m., New York City time, on May 5, 2000 (the "LATEST CLOSING DATE"); provided,
however, that the right to terminate this Agreement pursuant to this Section
X.B. shall not be available to any party whose failure to fulfill any of its
obligations under this Agreement has been the cause of or has resulted in the
failure of the Closing to occur at or before such time and date; provided,
further, however, that if the Closing shall not have occurred on or prior to the
Latest Closing Date, the Closing may only occur after the Latest Closing Date
with the written consent of Buyer.

     C. TERMINATION BY BUYER. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned by Buyer at any time prior to
the Closing Date, if (i) the Company shall have failed to comply with any of its
covenants or agreements contained in this Agreement, (ii) there shall have been
a breach by the Company of any representation or warranty made by it in this
Agreement, (iii) there shall have occurred any event or development, or there
shall be in existence any condition, having or reasonably likely to have a
Material Adverse Effect or (iv) the Company shall have failed to satisfy the
conditions provided in Article IX hereof.

     D. TERMINATION BY THE COMPANY. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned by the Company at any time
prior to the Closing Date, if (i) Buyer shall have failed to comply with any of
its covenants or agreements contained in this Agreement or (ii) there shall have
been a breach by Buyer of any representation or warranty made by it in this
Agreement.

     E. EFFECT OF TERMINATION. In the event of the termination of this Agreement
pursuant to this Article X, this Agreement shall thereafter become void and have
no effect, and no party hereto shall have any liability or obligation to any
other party hereto in respect of this Agreement, except that the provisions of
Article XI, this Section X.E and Section X.F shall survive any such termination;
provided, however, that no party shall be released from any liability hereunder
if this Agreement is terminated and the transactions contemplated hereby
abandoned by reason of (i) willful failure of such party to perform its
obligations hereunder or (ii) any misrepresentation made by such party of any
matter set forth herein.

                         XI. SURVIVAL; INDEMNIFICATION

     A. The representations, warranties and covenants made by each of the
Company and Buyer in this Agreement, the annexes, schedules and exhibits hereto
and in each instrument, agreement and certificate entered into and delivered by
them pursuant to this Agreement shall survive the Closing and the consummation
of the transactions contemplated hereby. In the event of a breach or violation
of any of such representations, warranties or

                                      -23-
<PAGE>   24

covenants, the party to whom such representations, warranties or covenants have
been made shall have all rights and remedies for such breach or violation
available to it under the provisions of this Agreement or otherwise, whether at
law or in equity, irrespective of any investigation made by or on behalf of such
party on or prior to the Closing Date.

     B. The Company hereby agrees to indemnify and hold harmless Buyer, its
Affiliates and their respective officers, directors, partners and members
(collectively, the "BUYER INDEMNITEES") from and against any and all losses,
claims, damages, judgments, penalties, liabilities and deficiencies
(collectively, "LOSSES") and agrees to reimburse Buyer Indemnitees for all out
of-pocket expenses (including the fees and expenses of legal counsel), in each
case promptly as incurred by Buyer Indemnitees and to the extent arising out of
or in connection with:

          1. any misrepresentation, omission of fact or breach of any of the
     Company's representations or warranties contained in this Agreement or the
     other Documents, or the annexes, schedules or exhibits hereto or thereto or
     any instrument, agreement or certificate entered into or delivered by the
     Company pursuant to this Agreement or the other Documents;

          2. any failure by the Company to perform in any material respect any
     of its covenants, agreements, undertakings or obligations set forth in this
     Agreement or the other Documents or any instrument, certificate or
     agreement entered into or delivered by the Company pursuant to this
     Agreement or the other Documents;

          3. the purchase of the Preferred Shares and the Warrants, the
     conversion of the Preferred Shares and the exercise of the Warrants and the
     consummation of the transactions contemplated by this Agreement and the
     other Documents, the use of any of the proceeds of the Purchase Price by
     the Company, the purchase or ownership of any or all of the Securities, the
     performance by the parties hereto of their respective obligations hereunder
     and under the Documents or any claim, litigation, investigation,
     proceedings or governmental action relating to any of the foregoing,
     whether or not Buyer is a party thereto; or

          4. resales of the Common Shares by Buyer in the manner and as
     contemplated by this Agreement and the Registration Rights Agreement.

     C. Buyer hereby agrees to indemnify and hold harmless the Company, its
Affiliates and their respective officers, directors, partners and members
(collectively, the "COMPANY INDEMNITEES") from and against any and all Losses,
and agrees to reimburse the Company Indemnitees for all out-of-pocket expenses
(including the fees and expenses of legal counsel) in each case promptly as
incurred by the Company Indemnitees and to the extent arising out of or in
connection with:

          1. any misrepresentation, omission of fact or breach of any of Buyer's
     representations or warranties contained in this Agreement or the other
     Documents, or the annexes, schedules or exhibits hereto or thereto or any
     instrument, agreement or certificate entered into or delivered by Buyer
     pursuant to this Agreement or the other Documents; or

                                      -24-
<PAGE>   25

          2. any failure by Buyer to perform in any material respect any of its
     covenants, agreements, undertakings or obligations set forth in this
     Agreement or the other Documents or any instrument, certificate or
     agreement entered into or delivered by Buyer pursuant to this Agreement or
     the other Documents.

     D. Promptly after receipt by either party hereto seeking indemnification
pursuant to this Article XI (an "INDEMNIFIED PARTY") of written notice of any
investigation, claim, proceeding or other action in respect of which
indemnification is being sought (each, a "CLAIM"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Article XI is being sought (the "INDEMNIFYING PARTY") of the commencement
thereof; but the omission so to notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party except
to the extent that the Indemnifying Party is materially prejudiced and forfeits
substantive rights or defenses by reason of such failure. In connection with any
Claim as to which both the Indemnifying Party and the Indemnified Party are
parties, the Indemnifying Party shall be entitled to assume the defense thereof.
Notwithstanding the assumption of the defense of any Claim by the Indemnifying
Party, the Indemnified Party shall have the right to employ separate legal
counsel and to participate in the defense of such Claim, and the Indemnifying
Party shall bear the reasonable fees, out-of-pocket costs and expenses of such
separate legal counsel to the Indemnified Party if (and only if): (x) the
Indemnifying Party shall have agreed to pay such fees, out-of-pocket costs and
expenses, (y) the Indemnified Party and the Indemnifying Party reasonably shall
have concluded that representation of the Indemnified Party and the Indemnifying
Party by the same legal counsel would not be appropriate due to actual or, as
reasonably determined by legal counsel to the Indemnified Party, potentially
differing interests between such parties in the conduct of the defense of such
Claim, or if there may be legal defenses available to the Indemnified Party that
are in addition to or disparate from those available to the Indemnifying Party,
or (z) the Indemnifying Party shall have failed to employ legal counsel
reasonably satisfactory to the Indemnified Party within a reasonable period of
time after notice of the commencement of such Claim. If the Indemnified Party
employs separate legal counsel in circumstances other than as described in
clauses (x), (y) or (z) above, the fees, costs and expenses of such legal
counsel shall be borne exclusively by the Indemnified Party. Except as provided
above, the Indemnifying Party shall not, in connection with any Claim in the
same jurisdiction, be liable for the fees and expenses of more than one firm of
legal counsel for the Indemnified Party (together with appropriate local
counsel). The Indemnifying Party shall not, without the prior written consent of
the Indemnified Party (which consent shall not unreasonably be withheld), settle
or compromise any Claim or consent to the entry of any judgment that does not
include an unconditional release of the Indemnified Party from all liabilities
with respect to such Claim or judgment.

     E. In the event one party hereunder should have a claim for indemnification
that does not involve a claim or demand being asserted by a third party, the
Indemnified Party promptly shall deliver notice of such claim to the
Indemnifying Party. If the Indemnified Party disputes the claim, such dispute
shall be resolved by mutual agreement of the Indemnified Party and the
Indemnifying Party or by binding arbitration conducted in accordance with the
procedures and rules of the American Arbitration Association. Judgment upon any
award rendered by any arbitrators may be entered in any court having competent
jurisdiction thereof.

                                      -25-
<PAGE>   26

                               XII. GOVERNING LAW

     This Agreement shall be governed by and interpreted in accordance with the
laws of the State of New York, without regard to the conflicts of law principles
of such state.

                        XIII. SUBMISSION TO JURISDICTION

     Each of the parties hereto consents to the exclusive jurisdiction of the
federal courts whose districts encompass any part of the City of New York or the
state courts of the State of New York sitting in the City of New York in
connection with any dispute arising under this Agreement and the other
Documents. Each party hereto hereby irrevocably and unconditionally waives, to
the fullest extent it may effectively do so, any defense of an inconvenient
forum or improper venue to the maintenance of such action or proceeding in any
such court and any right of jurisdiction on account of its place of residence or
domicile. Each party hereto irrevocably and unconditionally consents to the
service of any and all process in any such action or proceeding in such courts
by the mailing of copies of such process by certified or registered airmail at
its address specified in Article XIX. Each party hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.

                           XIV. WAIVER OF JURY TRIAL

     TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OTHER DOCUMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND OTHER DOCUMENTS. EACH PARTY HERETO (I)
CERTIFIES THAT NEITHER OF THEIR RESPECTIVE REPRESENTATIVES, AGENTS OR ATTORNEYS
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II) ACKNOWLEDGES THAT
IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.

                          XV. COUNTERPARTS; EXECUTION

     This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all the counterparts shall
together constitute one and the same instrument. A facsimile transmission of
this signed Agreement shall be legal and binding on all parties hereto.

                                      -26-
<PAGE>   27

                                 XVI. HEADINGS

     The headings of this Agreement are for convenience of reference and shall
not form part of, or affect the interpretation of, this Agreement. XVII.
SEVERABILITY

     In the event any one or more of the provisions contained in this Agreement
or in the other Documents should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein or therein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

            XVIII. ENTIRE AGREEMENT; REMEDIES, AMENDMENTS AND WAIVERS

     This Agreement and the Documents constitute the entire agreement among the
parties pertaining to the subject matter hereof and supersede all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. No supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by all parties. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.

                                  XIX. NOTICES

     Except as may be otherwise provided herein, any notice or other
communication or delivery required or permitted hereunder shall be in writing
and shall be delivered personally or sent by certified mail, postage prepaid, or
by a nationally recognized overnight courier service, and shall be deemed given
when so delivered personally or by overnight courier service, or, if mailed,
three (3) days after the date of deposit in the United States mails, as follows:

                  A.       if to the Company, to:

                           Wareforce.com, Inc.
                           1700 Rosecrans AvenueManhattan Beach, CA 90266
                           Attention:  Don Hughes
                           (310) 725-5558
                           (310) 725-2258 (Fax)

                           with a copy to:

                                      -27-
<PAGE>   28

                           Wareforce.com, Inc.
                           2361 Rosecrans Avenue
                           Suite 155
                           El Segundo, CA 90245
                           Attention:  Dan Ricketts
                           (310) 725-5561
                           (310) 725-5590 (Fax)

                  B.       if to Buyer, to:

                           Triton Private Equities Fund, L.P.
                           c/o Triton Capital Management, L.L.C.
                           225 North Market Street, Suite 225
                            Wichita, Kansas 67202
                           Attention:  John C. Tausche
                           (316) 262.8874
                           (316) 262.6801 (Fax)

                           with a copy to:

                           H. Glenn Bagwell, Jr., Esq.
                           3005 Anderson Drive, Suite 204
                           Raleigh, North Carolina 27609

                           (919) 785.3113
                           (919) 785.3116 (Fax)

                  C.       if to the Escrow Agent, to:

                           Cadwalader, Wickersham & Taft
                           100 Maiden Lane
                           New York, NY 10038
                           Attention:  Dennis J. Block, Esq.
                           (212) 504-5555
                           (212) 504-5557 (Fax)

The Company, Buyer or the Escrow Agent may change the foregoing address by
notice given pursuant to this Article XIX.

                              XX. CONFIDENTIALITY

     Each of the Company and Buyer agrees to keep confidential and not to
disclose to or use for the benefit of any third party the terms of this
Agreement or any other information which at any time is communicated by the
other party as being confidential without the prior written approval of the
other party; provided, however, that this provision shall not apply to
information which, at the time of disclosure, is already part of the public
domain (except by breach of this Agreement) and information which is required to
be disclosed by law (including,

                                      -28-
<PAGE>   29

without limitation, pursuant to Item 601(b)(10) of Regulation S-K under the
Securities Act and the Exchange Act).

                                XXI. ASSIGNMENT

     This Agreement shall not be assignable by either of the parties hereto
prior to the Closing without the prior written consent of the other party, and
any attempted assignment contrary to the provisions hereby shall be null and
void; provided, however, that Buyer may assign its rights and obligations
hereunder, in whole or in part, to any Affiliate of Buyer.

                            [SIGNATURE PAGE FOLLOWS.]

                                      -29-
<PAGE>   30

     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement on the date first above written.

                                         WAREFORCE.COM, INC.

                                         By:
                                            ------------------------------------
                                            Name:
                                            Title:

                                         TRITON PRIVATE EQUITIES FUND, L.P.

                                         BY:  TRITON CAPITAL MANAGEMENT, L.L.C.

                                           By:
                                              ----------------------------------
                                              Name: H. Glenn Bagwell, Jr.
                                              Title: Managing Member

<PAGE>   31

                                                                       EXHIBIT A

                         COMMON STOCK PURCHASE WARRANTS

<PAGE>   32

                                                                      EXHIBIT B

                           CERTIFICATE OF DESIGNATION

<PAGE>   33

                                                                       EXHIBIT C

                               ESCROW INSTRUCTIONS

<PAGE>   34

                                                                       EXHIBIT D

                          REGISTRATION RIGHTS AGREEMENT

<PAGE>   35

                                                               SCHEDULE III.A.1.

                     EXERCISE PRICES OF OPTIONS AND WARRANTS

<PAGE>   36

                                                               SCHEDULE III.A.3.

       PREEMPTIVE, SUBSCRIPTION, "CALL," RIGHT OF FIRST REFUSAL OR SIMILAR
                                     RIGHTS

<PAGE>   37

                                                               SCHEDULE III.A.4.

                                  SUBSIDIARIES

<PAGE>   38

                                                               SCHEDULE III.A.5.

                                     MINUTES

<PAGE>   39

                                                                 SCHEDULE III.C.

                        ISSUANCES AND SALES OF SECURITIES

<PAGE>   40

                                                                 SCHEDULE III.F.

                                  CONTRAVENTION

<PAGE>   41

                                                                 SCHEDULE III.K.

                                   LITIGATION

<PAGE>   42

                                                                 SCHEDULE III.L.

                                EVENTS OF DEFAULT

<PAGE>   43

                                                                 SCHEDULE III.O.

                           RELATED PARTY TRANSACTIONS

<PAGE>   44

                                                                 SCHEDULE III.Q.

                             SECURITIES LAW MATTERS

<PAGE>   45

                                                                 SCHEDULE III.R.

                              ENVIRONMENTAL MATTERS

<PAGE>   46

                                                                 SCHEDULE III.T.

                                  ERISA MATTERS

<PAGE>   47

                                                                 SCHEDULE III.V.

                                    PROPERTY

<PAGE>   48

                                                                 SCHEDULE III.W.

                              INTELLECTUAL PROPERTY

<PAGE>   49

                                                                 SCHEDULE III.Y.

                               REGISTRATION RIGHTS

<PAGE>   50

                                                                         ANNEX A

                                 FORM OF OPINION

     1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada, is duly
qualified to do business as a foreign corporation and is in good standing in all
jurisdictions where the Company owns or leases properties or conducts business,
except for jurisdictions in which the failure to so qualify would not have a
Material Adverse Effect, and has all requisite corporate power and authority to
own its properties and conduct its business as described in the Commission
Filings.

     2. The authorized capital stock of the Company consists of 50,000,000
shares of Common Stock, par value $0.001 per share (the "COMMON STOCK"), and
5,000,000 shares of Preferred Stock, par value $0.001 per share.

     3. When delivered to you or upon your order against payment of the agreed
consideration therefor in accordance with the provisions of the Documents, the
Securities will be duly authorized and validly issued, fully paid and
nonassessable.

     4. The Company has the requisite corporate power and authority to enter
into the Documents and to sell and deliver the Securities as described in the
Documents; each of the Documents has been duly and validly authorized by all
necessary corporate action by the Company; each of the Documents has been duly
and validly executed and delivered by and on behalf of the Company, and is valid
and binding agreement of the Company, enforceable in accordance with its terms,
except as enforceability may be limited by general equitable principles,
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other laws affecting creditors rights generally.

     5. Except as set forth on the Schedules to the Securities Purchase
Agreement, the execution and delivery by the Company of the Documents, the
issuance of the Securities, and the consummation by the Company of the other
transactions contemplated thereby, including, without limitation, the filing of
the Certificate of Designation with the Nevada Secretary of State's office, do
not, and compliance with the provisions of the Documents will not, conflict
with, or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or result in
the creation of any Lien upon any of the properties or assets of the Company or
any of its Subsidiaries under, or result in the termination of, or require that
any consent be obtained or any notice be given with respect to, (i) the
Certificate of Incorporation or By-Laws of the Company or the comparable charter
or organizational documents of any of its Subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease, contract or other agreement,
instrument or permit known to us and applicable to the Company or any of its
Subsidiaries or their respective properties or assets, or (iii) any Law
applicable to, or, to the best of our knowledge, any judgment, decree or order
of any court or government body having jurisdiction over, the Company or any of
its Subsidiaries or any of their respective properties or assets. To the best of
our knowledge, no consent, approval, authorization, order, registration, filing,
qualification, license or permit of or with any court

                                      A-1
<PAGE>   51

or any public, governmental or regulatory agency or body having jurisdiction
over the Company or any of its properties or assets is required for the
execution, delivery and performance by the Company of the Documents or the
consummation by the Company of the transactions contemplated thereby.

     6. When issued, the Preferred Shares and the Warrants shall be duly
authorized, validly issued, fully paid and nonassessable, and free and clear of
all encumbrances and restrictions, except for restrictions on transfer imposed
by applicable securities laws. The Conversion Shares and Warrant Shares issuable
upon conversion or exercise, respectively, of the Preferred Shares and the
Warrants, respectively, will be duly authorized, validly issued, fully paid and
nonassessable, and free and clear of all encumbrances and restrictions, except
for restrictions on transfer imposed by applicable securities laws.

     7. Based on Buyer's representations contained in this Agreement, the offer
and sale of the Preferred Shares and the Warrants are exempt from the
registration requirements of the Securities Act.

     8. To the best of our knowledge, other than as described in the Commission
Filings, there are no outstanding options, warrants or other securities
exercisable or convertible into Common Stock of the Company.

     9. There is no action, suit, claim, inquiry or investigation pending or, to
the best of our knowledge, threatened by or before any court or public or
governmental authority which, if determined adversely to the Company, would have
a Material Adverse Effect.

     10. Neither the Company nor any of its subsidiaries is, or will be after
the consummation of the transactions contemplated by this Agreement and the
other Documents and the use of the proceeds from the sale of the Securities, an
"investment company" or an entity "controlled" by an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended.

                                      A-2<PAGE>   1

                                                                EXHIBIT 10.25

                          REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT, dated as of May 2, 2000 (this
"AGREEMENT"), by and between Wareforce.com, Inc., a Nevada corporation, with
principal executive offices located at 2281 Rosecrans Avenue, Suite 155, El
Segundo, California 90245 (the "COMPANY"), and Triton Private Equities Fund,
L.P. (the "INITIAL INVESTOR").

     WHEREAS, upon the terms and subject to the conditions of the Securities
Purchase Agreement dated as of May 2, 2000, by and between the Initial Investor
and the Company (the "SECURITIES PURCHASE Agreement"), the Company has agreed to
issue and sell to the Initial Investor (i) 64,935 shares of Series A 6%
Convertible Preferred Stock, par value $0.001 per share (the "PREFERRED SHARES")
which, upon the terms of and subject to the conditions of the Company's
Certificate of Designation of Series A 6% Convertible Preferred Stock (the
"CERTIFICATE OF DESIGNATION"), are convertible into shares of the Company's
common stock, par value $0.001 per share (the "COMMON STOCK") and (ii) Common
Stock Purchase Warrants (the "WARRANTS") to purchase shares of Common Stock; and

     WHEREAS, to induce the Initial Investor to execute and deliver the
Securities Purchase Agreement, the Company has agreed to provide with respect to
the Common Stock issued or issuable in lieu of cash dividend payments on the
Preferred Shares, upon conversion of the Preferred Shares and exercise of the
Warrants certain registration rights under the Securities Act;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1. DEFINITIONS

     (a) As used in this Agreement, the following terms shall have the meanings:

          (i) "AFFILIATE," of any specified Person means any other Person who
     directly, or indirectly through one or more intermediaries, is in control
     of, is controlled by, or is under common control with, such specified
     Person. For purposes of this definition, control of a Person means the
     power, directly or indirectly, to direct or cause the direction of the
     management and policies of such Person whether by contract, securities,
     ownership or otherwise; and the terms "CONTROLLING" and "CONTROLLED" have
     the respective meanings correlative to the foregoing.

          (ii) "CLOSING DATE" means the date and time of the issuance and sale
     of the Preferred Shares and the Warrants.

          (iii) "COMMISSION" means the Securities and Exchange Commission.

          (iv) "CURRENT MARKET PRICE" on any date of determination means the
     closing bid price of a share of the Common Stock on such day as reported on
     the OTC

<PAGE>   2

     Bulletin Board service of the National Association of Securities Dealers,
     Inc. ("OTCBB"); provided, if such security is not listed or admitted to
     trading on the OTCBB, as reported on the principal national security
     exchange or quotation system on which such security is quoted or listed or
     admitted to trading, or, if not quoted or listed or admitted to trading on
     any national securities exchange or quotation system, the closing bid price
     of such security on the over-the-counter market on the day in question as
     reported by Bloomberg LP, or a similar generally accepted reporting
     service, as the case may be.

          (v) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
     amended, and the rules and regulations of the Commission thereunder, or any
     similar successor statute.

          (vi) "INVESTOR" means each of the Initial Investor and any transferee
     or assignee of Registrable Securities which agrees to become bound by all
     of the terms and provisions of this Agreement in accordance with Section 8
     hereof.

          (vii) "PERSON" means any individual, partnership, corporation, limited
     liability company, joint stock company, association, trust, unincorporated
     organization, or a government or agency or political subdivision thereof.

          (viii) "PROSPECTUS" means the prospectus (including, without
     limitation, any preliminary prospectus and any final prospectus filed
     pursuant to Rule 424(b) under the Securities Act, including any prospectus
     that discloses information previously omitted from a prospectus filed as
     part of an effective registration statement in reliance on Rule 430A under
     the Securities Act) included in the Registration Statement, as amended or
     supplemented by any prospectus supplement with respect to the terms of the
     offering of any portion of the Registrable Securities covered by the
     Registration Statement and by all other amendments and supplements to such
     prospectus, including all material incorporated by reference in such
     prospectus and all documents filed after the date of such prospectus by the
     Company under the Exchange Act and incorporated by reference therein.

          (ix) "PUBLIC OFFERING" means an offer registered with the Commission
     and the appropriate state securities commissions by the Company of its
     Common Stock and made pursuant to the Securities Act.

          (x) "REGISTRABLE SECURITIES" means the Common Stock issued or issuable
     (i) in lieu of cash dividend payments on the Preferred Shares, (ii) upon
     conversion or redemption of the Preferred Shares or (iii) upon exercise of
     the Warrants; provided, however, a share of Common Stock shall cease to be
     a Registrable Security for purposes of this Agreement when it no longer is
     a Restricted Security.

          (xi) "REGISTRATION STATEMENT" means a registration statement of the
     Company filed on an appropriate form under the Securities Act providing for
     the registration of, and the sale on a continuous or delayed basis by the
     holders of, all of the Registrable Securities pursuant to Rule 415 under
     the Securities Act, including the

                                       2
<PAGE>   3

     Prospectus contained therein and forming a part thereof, any amendments to
     such registration statement and supplements to such Prospectus, and all
     exhibits to and other material incorporated by reference in such
     registration statement and Prospectus.

          (xii) "RESTRICTED SECURITY" means any share of Common Stock issued or
     issuable in lieu of cash dividend payments on the Preferred Shares, upon
     conversion or redemption of the Preferred Shares or exercise of the
     Warrants except any such share that (i) has been registered pursuant to an
     effective registration statement under the Securities Act and sold in a
     manner contemplated by the prospectus included in such registration
     statement, (ii) has been transferred in compliance with the resale
     provisions of Rule 144 under the Securities Act (or any successor provision
     thereto) or is transferable pursuant to paragraph (k) of Rule 144 under the
     Securities Act (or any successor provision thereto), or (iii) otherwise has
     been transferred and a new share of Common Stock not subject to transfer
     restrictions under the Securities Act has been delivered by or on behalf of
     the Company.

          (xiii) "SECURITIES ACT" means the Securities Act of 1933, as amended,
     and the rules and regulations of the Commission thereunder, or any similar
     successor statute.

     (b) All capitalized terms used and not defined herein have the respective
meaning assigned to them in the Securities Purchase Agreement.

     2. REGISTRATION

     (a) Filing and Effectiveness of Registration Statement. The Company shall
prepare and file with the Commission not later than 60 days after the Closing
Date, a Registration Statement relating to the offer and sale of the Registrable
Securities and shall use its best efforts to cause the Commission to declare
such Registration Statement effective under the Securities Act as promptly as
practicable but in no event later than 120 days after the Closing Date, assuming
for purposes hereof a Conversion Price under the Certificate of Designation of
$1.50 per share. The Company shall promptly (and, in any event, no more than 24
hours after it receives comments from the Commission), notify the Buyer when and
if it receives any comments from the Commission on the Registration Statement
and promptly forward a copy of such comments, if they are in writing, to the
Buyer. At such time after the filing of the Registration Statement pursuant to
this Section 2(a) as the Commission indicates, either orally or in writing, that
it has no further comments with respect to such Registration Statement or that
it is willing to entertain appropriate requests for acceleration of
effectiveness of such Registration Statement, the Company shall promptly, and in
no event later than two business days after receipt of such indication from the
Commission, request that the effectiveness of such Registration Statement be
accelerated within 48 hours of the Commission's receipt of such request. Except
as provided in Schedule 2.A. hereto, the Company shall not include any other
securities in the Registration Statement relating to the offer and sale of the
Registrable Securities. The Company shall notify the Initial Investor by written
notice that such Registration Statement has been declared effective by the
Commission within 24 hours of such declaration by the Commission.

                                       3
<PAGE>   4

     (b) REGISTRATION DEFAULT. If the Registration Statement covering the
Registrable Securities required to be filed by the Company pursuant to Section
2(a), is not (i) filed with the Commission within 60 days after the Closing Date
or (ii) declared effective by the Commission within 120 days after the Closing
Date (either of which, without duplication, an "INITIAL DATE"), then the Company
shall make the payments to the Initial Investor as provided in the next sentence
as liquidated damages and not as a penalty. The amount to be paid by the Company
to the Initial Investor shall be determined as of each Computation Date (as
defined below), and such amount shall be equal to 2% (the "LIQUIDATED DAMAGE
RATE") of the Purchase Price (as defined in the Securities Purchase Agreement)
from the Initial Date to the first Computation Date and for each Computation
Date thereafter, calculated on a pro rata basis to the date on which the
Registration Statement is filed with (in the event of an Initial Date pursuant
to clause (i) above) or declared effective by (in the event of an Initial Date
pursuant to clause (ii) above) the Commission (the "PERIODIC AMOUNT") provided,
however, that in no event shall the liquidated damages be less than $10,000;
provided, further, however, that if the Registration Statement is not declared
effective by the Commission within 210 days after the Initial Date set forth in
clause (ii) above, then the Liquidated Damage Rate shall increase to 4%;
provided, further, however, that the Liquidated Damage Rate shall increase by 1%
for each 30 day period after the 210th day after the Initial Date set forth in
clause (ii) above that the Registration Statement is not declared effective by
the Commission. The full Periodic Amount shall be paid by the Company to the
Initial Investor by wire transfer of immediately available funds within three
days after each Computation Date.

     As used in this Section 2(b), "COMPUTATION DATE" means the date which is 30
days after the Initial Date and, if the Registration Statement required to be
filed by the Company pursuant to Section 2(a) has not theretofore been declared
effective by the Commission, each date which is 30 days after the previous
Computation Date until such Registration Statement is so declared effective.

     (c) ELIGIBILITY FOR USE OF FORM S-3. The Company agrees that at such time
as it meets all the requirements for the use of Securities Act Registration
Statement on Form S-3 or a comparable form it shall file all reports and
information required to be filed by it with the Commission in a timely manner
and take all such other action so as to maintain such eligibility for the use of
such form.

     (d) ADDITIONAL REGISTRATION STATEMENT. In the event the Current Market
Price declines to $2.00 per share or less and each time thereafter that the
Current Market Price declines by 10% (each such date, a "DECLINE DATE"), the
Company shall, to the extent required by the Securities Act (because the
additional shares were not covered by the Registration Statement filed pursuant
to Section 2(a)), as reasonably determined by the Initial Investor, file an
additional Registration Statement with the Commission for such additional number
of Registrable Securities as would be issuable upon conversion of the Preferred
Shares and exercise of the Warrants (the "ADDITIONAL REGISTRABLE SECURITIES") in
addition to those previously registered, assuming (x) with respect to the first
Additional Registration Statement, a Conversion Price of $0.50 per share and (y)
with respect to each succeeding Additional Registration Statement, a Conversion
Price of 10% less than the Conversion Price assumed with respect to the
immediately preceding Additional Registration Statement. The Company shall, to
the extent required by the Securities Act, as reasonably determined by the
Initial Investor, prepare and file with the

                                       4
<PAGE>   5
Commission not later than the 30th day thereafter, a Registration Statement
relating to the offer and sale of such Additional Registrable Securities and
shall use its best efforts to cause the Commission to declare such Registration
Statement effective under the Securities Act as promptly as practicable but not
later than 60 days thereafter. The Company shall not include any other
securities in the Registration Statement relating to the offer and sale of such
Additional Registrable Securities.

     If the Additional Registration Statement is not (i) filed with the
Commission within 30 days after the Decline Date or (ii) declared effective by
the Commission within 90 days after the Decline Date (either of which, without
duplication, an "ADDITIONAL REGISTRATION DATE"), then the Company shall make the
payments to the Initial Investor at the Liquidated Damage Rate from the
Additional Registration Date to the first Additional Computation Date and for
each Additional Computation Date thereafter, calculated on a pro rata basis to
the date on which the Additional Registration Statement is filed with (in the
event of an Additional Registration Date pursuant to clause (i) above) or
declared effective by (in the event of an Additional Registration Date pursuant
to clause (ii) above) the Commission (the "ADDITIONAL PERIODIC AMOUNT")
provided, however, that in no event shall the liquidated damages be less than
$10,000; provided, further, however, that if the Additional Registration
Statement is not declared effective by the Commission within 120 days after the
Additional Registration Date set forth in clause (ii) above, then the Liquidated
Damage Rate shall increase to 4%; provided, further, however, that the
Liquidated Damage Rate shall increase by 1% for each 30 day period after the
120th day after the Additional Registration Date set forth in clause (ii) above
that the Additional Registration Statement is not declared effective by the
Commission. The full Additional Periodic Amount shall be paid by the Company to
the Initial Investor by wire transfer of immediately available funds within
three days after each Additional Computation Date.

     As used in this Section 2(d), "ADDITIONAL COMPUTATION DATE" means the date
which is 30 days after the Additional Registration Date and, if the Additional
Registration Statement required to be filed by the Company pursuant to this
Section 2(d) has not theretofore been declared effective by the Commission, each
date which is 30 days after the previous Additional Computation Date until such
Additional Registration Statement is so declared effective.

     (e) (i) If the Company proposes to register any of its warrants, Common
Stock or any other shares of common stock of the Company under the Securities
Act (other than a registration (A) on Form S-8 or S-4 or any successor or
similar forms, (B) relating to Common Stock or any other shares of common stock
of the Company issuable upon exercise of employee share options or in connection
with any employee benefit or similar plan of the Company or (C) in connection
with a direct or indirect acquisition by the Company of another Person or any
transaction with respect to which Rule 145 (or any successor provision) under
the Securities Act applies), whether or not for sale for its own account, it
will each such time, give prompt written notice at least 20 days prior to the
anticipated filing date of the registration statement relating to such
registration to each Investor, which notice shall set forth such Investor's
rights under this Section 2(e) and shall offer such Investor the opportunity to
include in such registration statement such number of Registrable Securities as
such Investor may request. Upon the written request of any Investor made within
10 days after the receipt of notice from the Company (which request shall
specify the number of Registrable Securities intended to be disposed of by such

                                       5
<PAGE>   6

Investor), the Company will use its best efforts to effect the registration
under the Securities Act of all Registrable Securities that the Company has been
so requested to register by each Investor, to the extent requisite to permit the
disposition of the Registrable Securities so to be registered; provided,
however, that (A) if such registration involves a Public Offering, each Investor
must sell its Registrable Securities to any underwriters selected by the Company
with the consent of such Investor on the same terms and conditions as apply to
the Company and (B) if, at any time after giving written notice of its intention
to register any Registrable Securities pursuant to this Section 2 and prior to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register such
Registrable Securities, the Company shall give written notice to each Investor
and, thereupon, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration. The Company's obligations under
this Section 2(e) shall terminate on the date that the registration statement to
be filed in accordance with Section 2(a) is declared effective by the
Commission.

          (ii) If a registration pursuant to this Section 2(e) involves a Public
     Offering and the managing underwriter thereof advises the Company that, in
     its view, the number of shares of Common Stock, Warrants or other shares of
     Common Stock that the Company and the Investors intend to include in such
     registration exceeds the largest number of shares of Common Stock or
     Warrants (including any other shares of Common Stock or Warrants of the
     Company) that can be sold without having an adverse effect on such Public
     Offering (the "MAXIMUM OFFERING SIZE"), the Company will include in such
     registration only such number of shares of Common Stock or Warrants, as
     applicable, as does not exceed the Maximum Offering Size, and the number of
     shares in the Maximum Offering Size shall be allocated among the Company,
     the Investors and any other sellers of Common Stock or Warrants in such
     Public Offering ("THIRD-PARTY SELLERS"), first, pro rata among the
     Investors until all the shares of Common Stock or Warrants originally
     proposed to be offered for sale by the Investors have been allocated, and
     second, pro rata among the Company and any Third-Party Sellers, in each
     case on the basis of the relative number of shares of Common Stock or
     Warrants originally proposed to be offered for sale under such registration
     by each of the Investors, the Company and the Third-Party Sellers, as the
     case may be. If as a result of the proration provisions of this Section
     2(e)(ii), any Investor is not entitled to include all such Registrable
     Securities in such registration, such Investor may elect to withdraw its
     request to include any Registrable Securities in such registration. With
     respect to registrations pursuant to this Section 2(e), the number of
     securities required to satisfy any underwriters' over-allotment option
     shall be allocated among the Company, the Investors and any Third Party
     Seller pro rata on the basis of the relative number of securities offered
     for sale under such registration by each of the Investors, the Company and
     any such Third Party Sellers before the exercise of such over-allotment
     option.

     3. OBLIGATIONS OF THE COMPANY

     In connection with the registration of the Registrable Securities, the
Company shall:

                                       6
<PAGE>   7

     (a) Promptly (i) prepare and file with the Commission such amendments
(including post-effective amendments) to the Registration Statement and
supplements to the Prospectus as may be necessary to keep the Registration
Statement continuously effective and in compliance with the provisions of the
Securities Act applicable thereto so as to permit the Prospectus forming part
thereof to be current and useable by Investors for resales of the Registrable
Securities for a period of five years from the date on which the Registration
Statement is first declared effective by the Commission (the "EFFECTIVE TIME")
or such shorter period that will terminate when all the Registrable Securities
covered by the Registration Statement have been sold pursuant thereto in
accordance with the plan of distribution provided in the Prospectus, transferred
pursuant to Rule 144 under the Securities Act or otherwise transferred in a
manner that results in the delivery of new securities not subject to transfer
restrictions under the Securities Act (the "REGISTRATION PERIOD") and (ii) take
all lawful action such that each of (A) the Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, not misleading and
(B) the Prospectus forming part of the Registration Statement, and any amendment
or supplement thereto, does not at any time during the Registration Period
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

     (b) During the Registration Period, comply with the provisions of the
Securities Act with respect to the Registrable Securities of the Company covered
by the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the Investors as set forth in the Prospectus forming part of the
Registration Statement;

     (c) (i) Prior to the filing with the Commission of any Registration
Statement (including any amendments thereto) and the distribution or delivery of
any Prospectus (including any supplements thereto), provide (A) draft copies
thereof to the Investors and reflect in such documents all such comments as the
Investors (and their counsel) reasonably may propose and (B) to the Investors a
copy of the accountant's consent letter to be included in the filing and (ii)
furnish to each Investor whose Registrable Securities are included in the
Registration Statement and its legal counsel identified to the Company, (A)
promptly after the same is prepared and publicly distributed, filed with the
Commission, or received by the Company, one copy of the Registration Statement,
each Prospectus, and each amendment or supplement thereto, and (B) such number
of copies of the Prospectus and all amendments and supplements thereto and such
other documents, as such Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor;

     (d) (i) Register or qualify the Registrable Securities covered by the
Registration Statement under such securities or "blue sky" laws of such
jurisdictions as the Investors who hold a majority-in-interest of the
Registrable Securities being offered reasonably request, (ii) prepare and file
in such jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof at all times during the Registration Period,
(iii) take all such other lawful actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period, and (iv) take all such other lawful actions reasonably necessary or

                                       7
<PAGE>   8

advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (A) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (B) subject itself to general taxation in any such jurisdiction or
(C) file a general consent to service of process in any such jurisdiction;

     (e) As promptly as practicable after becoming aware of such event, notify
each Investor of the occurrence of any event, as a result of which the
Prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and
promptly prepare an amendment to the Registration Statement and supplement to
the Prospectus to correct such untrue statement or omission, and deliver a
number of copies of such supplement and amendment to each Investor as such
Investor may reasonably request;

     (f) As promptly as practicable after becoming aware of such event, notify
each Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance by the
Commission of any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time and take all lawful action
to effect the withdrawal, recession or removal of such stop order or other
suspension;

     (g) Cause all the Registrable Securities covered by the Registration
Statement to be listed on the principal national securities exchange, and
included in an inter-dealer quotation system of a registered national securities
association, on or in which securities of the same class or series issued by the
Company are then listed or included;

     (h) Maintain a transfer agent and registrar, which may be a single entity,
for the Registrable Securities not later than the effective date of the
Registration Statement;

     (i) Cooperate with the Investors who hold Registrable Securities being
offered to facilitate the timely preparation and delivery of certificates for
the Registrable Securities to be offered pursuant to the registration statement
and enable such certificates for the Registrable Securities to be in such
denominations or amounts, as the case may be, as the Investors reasonably may
request and registered in such names as the Investor may request; and, within
three business days after a registration statement which includes Registrable
Securities is declared effective by the Commission, deliver and cause legal
counsel selected by the Company to deliver to the transfer agent for the
Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such registration statement) an appropriate
instruction and, to the extent necessary, an opinion of such counsel;

     (j) Take all such other lawful actions reasonably necessary to expedite and
facilitate the disposition by the Investors of their Registrable Securities in
accordance with the intended methods therefor provided in the Prospectus which
are customary under the circumstances;

                                       8
<PAGE>   9

     (k) Make generally available to its security holders as soon as
practicable, but in any event not later than three (3) months after (i) the
effective date (as defined in Rule 158(c) under the Securities Act) of the
Registration Statement, and (ii) the effective date of each post-effective
amendment to the Registration Statement, as the case may be, an earnings
statement of the Company and its subsidiaries complying with Section 11(a) of
the Securities Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);

     (l) In the event of an underwritten offering, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the managers reasonably agree should
be included therein and to which the Company does not reasonably object and make
all required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after it is notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment;

     (m) (i) Make reasonably available for inspection by Investors, any
underwriter participating in any disposition pursuant to the Registration
Statement, and any attorney, accountant or other agent retained by such
Investors or any such underwriter all relevant financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries, and (ii) cause the Company's officers, directors and employees to
supply all information reasonably requested by such Investors or any such
underwriter, attorney, accountant or agent in connection with the Registration
Statement, in each case, as is customary for similar due diligence examinations;
provided, however, that all records, information and documents that are
designated in writing by the Company, in good faith, as confidential,
proprietary or containing any material nonpublic information shall be kept
confidential by such Investors and any such underwriter, attorney, accountant or
agent (pursuant to an appropriate confidentiality agreement in the case of any
such holder or agent), unless such disclosure is made pursuant to judicial
process in a court proceeding (after first giving the Company an opportunity
promptly to seek a protective order or otherwise limit the scope of the
information sought to be disclosed) or is required by law, or such records,
information or documents become available to the public generally or through a
third party not in violation of an accompanying obligation of confidentiality;
and provided, further, that, if the foregoing inspection and information
gathering would otherwise disrupt the Company's conduct of its business, such
inspection and information gathering shall, to the maximum extent possible, be
coordinated on behalf of the Investors and the other parties entitled thereto by
one firm of counsel designed by and on behalf of the majority in interest of
Investors and other parties;

     (n) In connection with any underwritten offering, make such representations
and warranties to the Investors participating in such underwritten offering and
to the managers, in form, substance and scope as are customarily made by the
Company to underwriters in secondary underwritten offerings;

     (o) In connection with any underwritten offering, obtain opinions of
counsel to the Company (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managers) addressed to the
underwriters, covering such matters as are customarily covered in opinions
requested in secondary underwritten offerings (it being agreed that the matters
to be covered by such opinions shall include, without limitation, as of the date
of

                                       9
<PAGE>   10

the opinion and as of the Effective Time of the Registration Statement or
most recent post-effective amendment thereto, as the case may be, the absence
from the Registration Statement and the Prospectus, including any documents
incorporated by reference therein, of an untrue statement of a material fact or
the omission of a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading, subject to customary
limitations);

     (p) In connection with any underwritten offering, obtain "cold comfort"
letters and updates thereof from the independent public accountants of the
Company (and, if necessary, from the independent public accountants of any
subsidiary of the Company or of any business acquired by the Company, in each
case for which financial statements and financial data are, or are required to
be, included in the Registration Statement), addressed to each underwriter
participating in such underwritten offering (if such underwriter has provided
such letter, representations or documentation, if any, required for such cold
comfort letter to be so addressed), in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
secondary underwritten offerings;

     (q) In connection with any underwritten offering, deliver such documents
and certificates as may be reasonably required by the managers, if any; and

     (r) In the event that any broker-dealer registered under the Exchange Act
shall be an "AFFILIATE" (as defined in Rule 2729(b)(1) of the rules and
regulations of the National Association of Securities Dealers, Inc. (the "NASD
RULES") (or any successor provision thereto)) of the Company or has a "CONFLICT
OF INTEREST" (as defined in Rule 2720(b)(7) of the NASD Rules (or any successor
provision thereto)) and such broker-dealer shall underwrite, participate as a
member of an underwriting syndicate or selling group or assist in the
distribution of any Registrable Securities covered by the Registration
Statement, whether as a holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such broker-dealer in complying
with the requirements of the NASD Rules, including, without limitation, by (A)
engaging a "QUALIFIED INDEPENDENT UNDERWRITER" (as defined in Rule 2720(b)(15)
of the NASD Rules (or any successor provision thereto)) to participate in the
preparation of the Registration Statement relating to such Registrable
Securities, to exercise usual standards of due diligence in respect thereof and
to recommend the public offering price of such Registrable Securities, (B)
indemnifying such qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 6 hereof, and (C) providing
such information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the NASD Rules.

     4. OBLIGATIONS OF THE INVESTORS

     In connection with the registration of the Registrable Securities, the
Investors shall have the following obligations:

     (a) It shall be a condition precedent to the obligations of the Company to
complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company such information regarding

                                       10
<PAGE>   11

itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request. As least seven days prior to the first anticipated filing
date of the Registration Statement, the Company shall notify each Investor of
the information the Company requires from each such Investor (the "REQUESTED
INFORMATION") if such Investor elects to have any of its Registrable Securities
included in the Registration Statement. If at least two business days prior to
the anticipated filing date the Company has not received the Requested
Information from an Investor (a "NON-RESPONSIVE INVESTOR"), then the Company may
file the Registration Statement without including Registrable Securities of such
Non-Responsive Investor and have no further obligations to the Non-Responsive
Investor;

     (b) Each Investor by its acceptance of the Registrable Securities agrees to
cooperate with the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless such Investor has notified the Company
in writing of its election to exclude all of its Registrable Securities from the
Registration Statement; and

     (c) Each Investor agrees that, upon receipt of any notice from the Company
of the occurrence of any event of the kind described in Section 3(e) or 3(f), it
shall immediately discontinue its disposition of Registrable Securities pursuant
to the Registration Statement covering such Registrable Securities until such
Investor's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(e) and, if so directed by the Company, such Investor
shall deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in such
Investor's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.

     5. EXPENSES OF REGISTRATION

     All expenses, other than underwriting discounts and commissions, incurred
in connection with registrations, filings or qualifications pursuant to Section
3, but including, without limitation, all registration, listing, and
qualifications fees, printing and engraving fees, accounting fees, and the fees
and disbursements of counsel for the Company, and the reasonable fees of one
firm of counsel to the holders of a majority in interest of the Registrable
Securities shall be borne by the Company.

     6. INDEMNIFICATION AND CONTRIBUTION

     (a) The Company shall indemnify and hold harmless each Investor and each
underwriter, if any, which facilitates the disposition of Registrable
Securities, and each of their respective officers and directors and each person
who controls such Investor or underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (each such person being
sometimes hereinafter referred to as an "INDEMNIFIED Person") from and against
any losses, claims, damages or liabilities, joint or several, to which such
Indemnified Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement

                                       11
<PAGE>   12

or an omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, not misleading,
or arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Prospectus or an omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company hereby agrees to
reimburse such Indemnified Person for all reasonable legal and other expenses
incurred by them in connection with investigating or defending any such action
or claim as and when such expenses are incurred; provided, however, that the
Company shall not be liable to any such Indemnified Person in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) an untrue statement or alleged untrue statement made in, or an
omission or alleged omission from, such Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to the
Company by such Indemnified Person expressly for use therein or (ii) in the case
of the occurrence of an event of the type specified in Section 3(e), the use by
the Indemnified Person of an outdated or defective Prospectus after the Company
has provided to such Indemnified Person an updated Prospectus correcting the
untrue statement or alleged untrue statement or omission or alleged omission
giving rise to such loss, claim, damage or liability.

     (b) INDEMNIFICATION BY THE INVESTORS AND UNDERWRITERS. Each Investor
agrees, as a consequence of the inclusion of any of its Registrable Securities
in a Registration Statement, and each underwriter, if any, which facilitates the
disposition of Registrable Securities shall agree, as a consequence of
facilitating such disposition of Registrable Securities, severally and not
jointly, to (i) indemnify and hold harmless the Company, its directors
(including any person who, with his or her consent, is named in the Registration
Statement as a director nominee of the Company), its officers who sign any
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities to which the
Company or such other persons may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in such Registration Statement or
Prospectus or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (in light of the circumstances under which they were
made, in the case of the Prospectus), not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such holder or
underwriter expressly for use therein; provided, however, that no Investor or
underwriter shall be liable under this Section 6(b) for any amount in excess of
the net proceeds paid to such Investor or underwriter in respect of shares sold
by it, and (ii) reimburse the Company for any legal or other expenses incurred
by the Company in connection with investigating or defending any such action or
claim as such expenses are incurred.

     (c) NOTICE OF CLAIMS, ETC. Promptly after receipt by a party seeking
indemnification pursuant to this Section 6 (an "INDEMNIFIED PARTY") of written
notice of any investigation, claim, proceeding or other action in respect of
which indemnification is being sought (each, a "CLAIM"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section 6 is being sought (the "INDEMNIFYING PARTY") of the

                                       12
<PAGE>   13

commencement thereof; but the omission to so notify the Indemnifying Party shall
not relieve it from any liability that it otherwise may have to the Indemnified
Party, except to the extent that the Indemnifying Party is materially prejudiced
and forfeits substantive rights and defenses by reason of such failure. In
connection with any Claim as to which both the Indemnifying Party and the
Indemnified Party are parties, the Indemnifying Party shall be entitled to
assume the defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying Party, the Indemnified Party shall have the right to
employ separate legal counsel and to participate in the defense of such Claim,
and the Indemnifying Party shall bear the reasonable fees, out-of-pocket costs
and expenses of such separate legal counsel to the Indemnified Party if (and
only if): (x) the Indemnifying Party shall have agreed to pay such fees, costs
and expenses, (y) the Indemnified Party and the Indemnifying Party shall
reasonably have concluded that representation of the Indemnified Party by the
Indemnifying Party by the same legal counsel would not be appropriate due to
actual or, as reasonably determined by legal counsel to the Indemnified Party,
potentially differing interests between such parties in the conduct of the
defense of such Claim, or if there may be legal defenses available to the
Indemnified Party that are in addition to or disparate from those available to
the Indemnifying Party, or (z) the Indemnifying Party shall have failed to
employ legal counsel reasonably satisfactory to the Indemnified Party within a
reasonable period of time after notice of the commencement of such Claim. If the
Indemnified Party employs separate legal counsel in circumstances other than as
described in clauses (x), (y) or (z) above, the fees, costs and expenses of such
legal counsel shall be borne exclusively by the Indemnified Party. Except as
provided above, the Indemnifying Party shall not, in connection with any Claim
in the same jurisdiction, be liable for the fees and expenses of more than one
firm of counsel for the Indemnified Party (together with appropriate local
counsel). The Indemnified Party shall not, without the prior written consent of
the Indemnifying Party (which consent shall not unreasonably be withheld),
settle or compromise any Claim or consent to the entry of any judgment that does
not include an unconditional release of the Indemnifying Party from all
liabilities with respect to such Claim or judgment.

     (d) CONTRIBUTION. If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an Indemnified Person under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such Indemnifying Party or by such Indemnified Party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Investors or any underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 6(d).
The amount paid or payable by an Indemnified

                                       13
<PAGE>   14

Party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such Indemnified Party in connection
with investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Investors
and any underwriters in this Section 6(d) to contribute shall be several in
proportion to the percentage of Registrable Securities registered or
underwritten, as the case may be, by them and not joint.

     (e) Notwithstanding any other provision of this Section 6, in no event
shall any (i) Investor be required to undertake liability to any person under
this Section 6 for any amounts in excess of the dollar amount of the proceeds to
be received by such Investor from the sale of such Investor's Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) pursuant to any Registration Statement under which such Registrable
Securities are to be registered under the Securities Act and (ii) underwriter be
required to undertake liability to any Person hereunder for any amounts in
excess of the aggregate discount, commission or other compensation payable to
such underwriter with respect to the Registrable Securities underwritten by it
and distributed pursuant to the Registration Statement.

     (f) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 6 shall be in addition to any liability which such Indemnified Person
may otherwise have to the Company. The remedies provided in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.

     7. RULE 144

     With a view to making available to the Investors the benefits of Rule 144
under the Securities Act or any other similar rule or regulation of the
Commission that may at any time permit the Investors to sell securities of the
Company to the public without registration ("RULE 144"), the Company agrees to
use its best efforts to:

     (a) comply with the provisions of paragraph (c) (1) of Rule 144; and

     (b) file with the Commission in a timely manner all reports and other
documents required to be filed by the Company pursuant to Section 13 or 15(d)
under the Exchange Act; and, if at any time it is not required to file such
reports but in the past had been required to or did file such reports, it will,
upon the request of any Investor, make available other information as required
by, and so long as necessary to permit sales of, its Registrable Securities
pursuant to Rule 144.

     8. ASSIGNMENT

     The rights to have the Company register Registrable Securities pursuant to
this Agreement shall be automatically assigned by the Investors to any permitted
transferee of all or any portion of such Registrable Securities (or all or any
portion of any Preferred Shares or Warrant of the Company which is convertible
into such securities) only if: (a) the Investor

                                       14
<PAGE>   15

agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment, (b) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (i) the name and
address of such transferee or assignee and (ii) the securities with respect to
which such registration rights are being transferred or assigned, (c)
immediately following such transfer or assignment, the securities so transferred
or assigned to the transferee or assignee constitute Restricted Securities, and
(d) at or before the time the Company received the written notice contemplated
by clause (b) of this sentence the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein.

     9. AMENDMENT AND WAIVER

     Any provision of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and Investors who hold a majority-in-interest of the Registrable Securities. Any
amendment or waiver effected in accordance with this Section 9 shall be binding
upon each Investor and the Company.

     10. CHANGES IN COMMON STOCK

     If, and as often as, there are any changes in the Common Stock by way of
stock split, stock dividend, reverse split, combination or reclassification, or
through merger, consolidation, reorganization or recapitalization, or by any
other means, appropriate adjustment shall be made in the provisions hereof, as
may be required, so that the rights and privileges granted hereby shall continue
with respect to the Common Stock as so changed.

     11. MISCELLANEOUS

     (a) A person or entity shall be deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

     (b) If, after the date hereof and prior to the Commission declaring the
Registration Statement to be filed pursuant to Section 2(a) effective under the
Securities Act, the Company grants to any Person any registration rights with
respect to any Company securities which are more favorable to such other Person
than those provided in this Agreement, then the Company forthwith shall grant
(by means of an amendment to this Agreement or otherwise) identical registration
rights to all Investors hereunder.

     (c) Except as may be otherwise provided herein, any notice or other
communication or delivery required or permitted hereunder shall be in writing
and shall be delivered personally or sent by certified mail, postage prepaid, or
by a nationally recognized overnight courier service, and shall be deemed given
when so delivered personally or by overnight courier service, or, if mailed,
three days after the date of deposit in the United States mails, as follows:

                                       15
<PAGE>   16

                  (i)      if to the Company, to:

                           Wareforce.com, Inc.
                           1700 Rosecrans AvenueManhattan Beach, CA 90266
                           Attention:  Don Hughes
                           (310) 725-5558
                           (310) 725-2258 (Fax)

                           with a copy to:

                           Wareforce.com, Inc.
                           2281 Rosecrans Avenue
                           Suite 155
                           El Segundo, CA 90245
                           Attention:  Dan Ricketts
                           (310) 725-5561
                           (310) 725-5590 (Fax)

                  (ii)     if to the Initial Investor, to:

                           Triton Private Equities Fund, L.P.
                           c/o Triton Capital Management, L.L.C.
                           225 North Market Street, Suite 225
                           Wichita, Kansas 67202
                           Attention:  John C. Tausche
                           (316) 262.8874
                           (316) 262.6801 (Fax)

                           with a copy to:

                           H. Glenn Bagwell, Jr., Esq.
                           3005 Anderson Drive, Suite 204
                           Raleigh, North Carolina 27609
                           (919) 785.3113
                           (919) 785.3116 (Fax)

               (iii) if to any other Investor, at such address as such Investor
          shall have provided in writing to the Company.

The Company, the Initial Investor or any Investor may change the foregoing
address by notice given pursuant to this Section 11(c).

     (d) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

                                       16
<PAGE>   17

     (e) This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions.

     (f) The remedies provided in this Agreement are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

     (g) The Company shall not enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The Company is not currently a party to any agreement
granting any registration rights with respect to any of its securities to any
person which conflicts with the Company's obligations hereunder or gives any
other party the right to include any securities in any Registration Statement
filed pursuant hereto, except for such rights and conflicts as have been
irrevocably waived. Without limiting the generality of the foregoing, without
the written consent of the holders of a majority in interest of the Registrable
Securities, the Company shall not grant to any person the right to request it to
register any of its securities under the Securities Act unless the rights so
granted are subject in all respect to the prior rights of the holders of
Registrable Securities set forth herein, and are not otherwise in conflict or
inconsistent with the provisions of this Agreement. The restrictions on the
Company's rights to grant registration rights under this paragraph shall
terminate on the date the Registration Statement to be filed pursuant to Section
2(a) is declared effective by the Commission.

     (h) This Agreement, the Securities Purchase Agreement, the Escrow
Instructions, dated as of a date even herewith (the "ESCROW INSTRUCTIONS"),
between the Company, the Initial Investor and Cadwalader, Wickersham & Taft, the
Preferred Shares and the Warrants constitute the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein. This Agreement, the Securities Purchase Agreement, the
Escrow Instructions, the Certificate of Designation and the Warrants supersede
all prior agreements and undertakings among the parties hereto with respect to
the subject matter hereof.

     (i) Subject to the requirements of Section 8 hereof, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.

                                       17
<PAGE>   18

     (j) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

     (k) The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning thereof.

     (l) The Company acknowledges that any failure by the Company to perform its
obligations under Section 3, or any delay in such performance could result in
direct damages to the Investors and the Company agrees that, in addition to any
other liability the Company may have by reason of any such failure or delay, the
Company shall be liable for all direct damages caused by such failure or delay.

     (m) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. A facsimile transmission of this signed Agreement shall be legal
and binding on all parties hereto.

                           [SIGNATURE PAGE FOLLOWS.]

                                       18
<PAGE>   19

     In Witness Whereof, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.

                                   Wareforce.com, Inc.

                                   By:
                                      ------------------------------------------
                                       Name:
                                       Title:

                                   Triton Private Equities Fund, L.P.

                                   By:  Triton Capital Management, L.L.C.

                                       By:
                                          --------------------------------------
                                        Name:  H. Glenn Bagwell, Jr.
                                            Title: Managing Member

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