Document:

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                              ELITE LOGISTICS, INC.

                                  COMMON STOCK

                               PURCHASE AGREEMENT

                          Dated as of October 13, 2000

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                              ELITE LOGISTICS, INC.

                         COMMON STOCK PURCHASE AGREEMENT

         THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is entered into
as of October 13, 2000, by and among Elite Logistics, Inc., an Idaho corporation
(the "Company"), and the parties listed on the Schedule of Investors attached
hereto (each, an "Investor"), with reference to the following facts:

         WHEREAS, the Company has authorized the sale and issuance of up to
1,125,926 shares of its Common Stock (the "Common Stock") pursuant to the terms
of this Agreement.

         WHEREAS, the Investors hereto wish to purchase, and the Company wishes
to sell to those Investors, shares of the Common Stock on the terms and
conditions set forth herein.

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and conditions set forth in this Agreement, the parties agree
as follows:

         1. Authorization and Sale of the Shares.

                  1.1 Authorization. The Company has authorized the issuance and
sale pursuant to the terms and conditions hereof of up to 1,125,926 shares of
its Common Stock.

                  1.2 Issuance and Sale of Common Stock. Subject to the terms
and conditions hereof, each Investor agrees, severally but not jointly, to
purchase, and the Company agrees to issue and sell to each such Investor, at
each Closing (as such term is hereinafter defined), the respective number of
shares of Common Stock specified opposite the name of such Investor on the
Schedule of Investors at a purchase price of $1.35 per share.

                  1.3 Issuance and Sale of Warrants. Subject to the terms and
conditions hereof, the Company agrees to issue to each Investor participating in
the applicable Closing a warrant to purchase shares of Common Stock equal to
one-half the number of shares of Common Stock that Investor acquires in such
Closing. The warrants will be in the form of Exhibit A hereto (each, a "Warrant"
and collectively, the "Warrants"). The exercise price of each Warrant will be
$2.70 per share of Common Stock issuable on exercise of the Warrant.

                  1.4 Closings; Delivery.

                           (a) Closing. Upon satisfaction of the conditions set
forth in Sections 4 and 5, the closing of the purchase and sale of the shares of
Common Stock listed in Part I of the Schedule of Investors attached hereto and
the issuance of the Warrants related thereto shall take place at Shartsis,
Friese & Ginsburg LLP, 18th Floor, One Maritime Plaza, San Francisco 94111, on
or before October 13, 2000 (the "First Closing Date"), at 10:00 a.m., or at such
other time and place as the parties may agree (the "First Closing"). The First
Closing Date and all subsequent closing dates referred to Section 1.4(c) of this
Agreement are collectively referred to herein as the "Closing Dates" and each
individually as a "Closing Date." The First Closing and all subsequent closings
referred to Section 1.4(c) of this Agreement are collectively referred to herein
as the "Closings" and each individually as a "Closing."

COMMON STOCK PURCHASE AGREEMENT
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                           (b) Delivery at the First Closing. Subject to the
terms of this Agreement, at the First Closing the Company will deliver to each
Investor listed in Part I of the Schedule of Investors a stock certificate
representing the number of shares of Common Stock set forth beside such
Investor's name on the Schedule of Investors and a Warrant exercisable into the
applicable number of shares of Common Stock against delivery to the Company by
each such Investor at the First Closing of a check or wire transfer of funds for
the purchase price of the shares of Common Stock.

                           (c) Subsequent Sale of Shares. At any time on or
before the date that is 60 days after the First Closing Date, Koyah Partners,
L.P., Koyah Leverage Partners, L.P. and any other entity or account managed by
or under common investment management with ICM Asset Management, Inc.
(collectively, the "Approved Investors") have the exclusive right, upon the
election of one or more of the Approved Investors, as the case may be, to
purchase, and the Company agrees to sell to such Approved Investor or Approved
Investors, as the case may be, upon such election, up to an additional 555,556
shares of such Common Stock not sold in the First Closing at a purchase price of
$1.35 per share. All such subsequent sales shall be made on the terms and
conditions set forth in this Agreement, including, without limitation,
satisfaction of the conditions set forth in Sections 4 and 5. Any shares of
Common Stock sold pursuant to this Section 1.4(c) shall be deemed to be "Common
Stock" for all purposes under this Agreement and any investors thereof shall be
deemed to be "Investors" for all purposes under this Agreement and under the
Investors' Rights Agreement, dated as of the date hereof, by and among the
Company and the Investors, the form of which is attached hereto as Exhibit B
(the "Investors' Rights Agreement"), and such investors shall automatically
become parties to this Agreement and the Investors' Rights Agreement and shall
have the rights and obligations of an Investor hereunder and thereunder.

                           (d) Delivery at each Subsequent Closing. Subject to
the terms of this Agreement, at each Closing after the First Closing, the
Company shall deliver to each Investor acquiring shares of Common Stock at such
Closing a stock certificate representing that number of shares of Common Stock
set forth beside such Investor's name on the Schedule of Investors and a Warrant
exercisable into the applicable number of shares of Common Stock against
delivery to the Company by each such Investor participating in such Closing of a
check or wire transfer of funds for the purchase price of the shares of Common
Stock. After each such Closing, the Company will update the Schedule of
Investors by adding the investors in such Closing to a new Part to the Schedule
of Investors.

                  1.5 Additional or Other Sales of Shares. At any time prior to
October 12, 2001, the Company may not, without the prior written consent of
holders of at least 80% of the then issued and outstanding shares of Common
Stock acquired pursuant to this Agreement, (i) issue or sell any shares of the
Company's Common Stock for a purchase price of less than $1.35 per share of such
Common Stock, (ii) issue or sell any shares of the Company's equity securities
that are convertible or exercisable into share(s) of the Company's Common Stock
(referred to herein as "Common Stock Equivalents") for a purchase price of less
than $1.35 per share of such Common Stock Equivalent (based on the per share
price of the number of shares of Common Stock into which such Common Stock
Equivalent is convertible or exercisable), or (iii) issue or sell a combination
of Common Stock and Common Stock Equivalents at any price. The prohibition set
forth in this Section 1.5 does not apply to the issuance of (a) 1,000,000 shares
of

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Common Stock issuable upon conversion of options which are outstanding or
reserved for issuance as of the First Closing Date under the Elite Logistics,
Inc. 2000 Equity Incentive Plan or (b) 1,817,202 shares of Common Stock issuable
on exercise of warrants (outstanding as of the First Closing Date) and the
Warrants.

                  1.6 Effect of Change in Company's Capital Structure. For
purposes of this Section 1, appropriate adjustments shall be made in the price,
number and class of shares in the event of a stock split, reverse stock split,
combination, reclassification or like change in the capital structure of the
Company after the date of this Agreement.

         2. Representations, Warranties and Agreements of the Company. The
Company (expressly including for purposes of this Section 2 its wholly owned
subsidiary, Elite Logistics Services, Inc. a Texas corporation) hereby
represents and warrants to each Investor that except as set forth on the
Schedules attached hereto (which exceptions shall be deemed to be
representations and warranties as if made hereunder):

                  2.1 Organization; Standing and Power. The Company (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, (b) has all requisite corporate power and
authority to own and operate its properties and to carry on its businesses as
presently conducted and as proposed hereafter to be conducted, and (c) is duly
qualified and in good standing to do business as a foreign corporation in each
and every jurisdiction where its assets are located and wherever such
qualification is necessary to carry out its business and operations except where
the failure to so qualify or be in good standing would not have a material
adverse effect on the condition (financial or otherwise), business, operations,
assets or prospects of the Company (the "Condition of the Company"). The Company
has all requisite corporate power and authority to execute and deliver, and
perform all of its obligations under this Agreement and the other Related
Documents (as defined in Section 8).

                  2.2 Capitalization; Reserved Stock, Preemptive Rights. The
total authorized capital stock of the Company immediately prior to the First
Closing consists of 50,000,000 shares of Common Stock and 10,000,000 shares of
Preferred Stock, of which 12,343,223 shares of Common Stock are issued and
outstanding and 2,445 shares of Series A Preferred Stock are issued and
outstanding. All capital stock of the Company that is outstanding immediately
prior to the First Closing have been duly and validly issued, are fully paid and
nonassessable and have been issued in accordance with all applicable federal and
state securities laws. Except for (a) the 1,000,000 shares of Common Stock
issuable upon conversion of options which are outstanding or reserved for
issuance under the Elite Logistics, Inc. 2000 Equity Incentive Plan and (b)
1,817,202 shares of Common Stock issuable on exercise of the warrants, including
the Warrants, no other shares have been reserved for issuance on the First
Closing Date and there are no outstanding options, warrants or other rights to
subscribe for or purchase from the Company any shares of its capital stock or
any securities convertible into or exchangeable for its capital stock. There are
no preemptive rights or rights of first refusal or similar rights which are
binding on the Company permitting any person to subscribe for or purchase from
the Company shares of its capital stock pursuant to any provision of law, the
articles of incorporation or bylaws of the Company or by agreement or otherwise.
The designations, powers, preferences, rights, qualifications, limitations and
restrictions in respect of each class and series of authorized capital

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stock of the Company are as set forth in the certificate or articles of
incorporation of the Company, and all such designations, powers, preferences,
rights, qualifications, limitations and restrictions are valid, binding and
enforceable against the Company and in accordance with all applicable laws,
rules and regulations.

                  2.3 Authorization and Binding Obligation.

                           (a) The execution and delivery by the Company of this
Agreement, the other Related Documents, the performance of the Company's
obligations hereunder and thereunder, and the consummation of the transactions
contemplated hereby and thereby (including the issuance and delivery of the
shares of Common Stock and the Common Stock issuable on exercise of the
Warrants) have been duly authorized by all necessary corporate action and will
not, either prior to or as a result of the consummation of the transactions
contemplated by this Agreement: (i) violate any law or any governmental rule or
regulation applicable to the Company, any provision of the certificate or
articles of incorporation or bylaws of the Company, or any contract, indenture,
agreement or other instrument to which the Company is a party, or by which the
Company or any of its assets or properties are bound, or (ii) be in conflict
with, result in a breach of, or constitute (after the giving of notice or lapse
of time or both) a default under, or result in the creation or imposition of any
lien of any nature whatsoever upon any of the property or assets of the Company
pursuant to the provisions of any contract, indenture, agreement or other
instrument to which the Company is a party or by which its assets or property is
bound. The Company is not required to obtain any approval, consent or
authorization from, or to file any declaration or statement with, any
governmental instrumentality or agency in connection with or as a condition to
the execution, delivery or performance of this Agreement (including the issuance
and delivery of the shares of Common Stock and the Common Stock issuable on
exercise of the Warrants), or the other Related Documents, other than (i)
approval of the board of directors of the Company, which has been obtained, and
(ii) the filing of the Form D and any applicable state securities law filings,
which filing or filings, as the case may be, will be made in accordance with
applicable laws and regulations.

                           (b) Each of the Agreement and the other Related
Documents has been duly executed and delivered by the Company and is the legally
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.

                           (c) The Common Stock that is being issued hereunder,
when issued, sold, paid for and delivered in accordance with the terms of this
Agreement will be duly and validly issued, fully paid and non-assessable, and
free and clear of any restrictions on transfer (other than any restrictions
under the Securities Act of 1933, as amended (the "Securities Act"), and state
securities laws) and any taxes, security interests, options, warrants, purchase
rights, preemptive rights, contracts, commitments, equities, claims or demands.
The shares of Common Stock issuable on exercise of the Warrants, when issued in
accordance with the terms of the Warrants, will be duly and validly issued,
fully paid and non-assessable, and free and clear of any restrictions on
transfer (other than any restrictions under the Securities Act and state
securities laws) and any taxes, security interests, options, warrants, purchase
rights, preemptive rights, contracts, commitments, equities, claims or demands.

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                  2.4 Securities Law Exemption. The offer, sale and issuance of
the shares of the Common Stock and Warrants as contemplated by this Agreement
are exempt from the registration requirements of the Securities Act and
applicable state securities laws, and neither the Company nor any authorized
agent acting on its behalf has taken or will take any action hereafter that
would cause the loss of such exemption.

                  2.5 Non-contravention. Except as set forth on Schedule 2.5
hereof, the Company is not in violation or breach of or in default with respect
to, any material provision of any contract, agreement, instrument, lease,
license, arrangement or understanding to which it is a party, and each such
contract, agreement, instrument, lease, license, arrangement and understanding
is in full force and effect and is the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability.

                  2.6 SEC Reports. The Company has filed all required reports,
schedules, forms, statements, and other documents with the Securities and
Exchange Commission (the "SEC") since September 25, 2000, the effective date of
the Company's Form 10-SB (together with other documents that revise or supersede
earlier filed documents, the "SEC Reports"). The Company has delivered or made
available to the Investors true and complete copies of the SEC Reports. As of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the 1933 Act or the 1934 Act, as the case may be, and the
rules and regulations of the SEC promulgated thereunder applicable to such SEC
Reports. None of the SEC Reports contained 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 SEC Reports complied as of their respective dates of
filing with the SEC in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles (except, in the case of unaudited statements, as permitted by
Regulation S-X promulgated by the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto), and fairly
present the financial position of the Company as of the dates thereof and the
results of its operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal year-end audit adjustments). As of
the date hereof, the Company has on a timely basis made all filings required to
be made by the Company with the SEC.

                  2.7 Litigation. Except as set forth in the SEC Reports, there
is no action, suit or litigation, administrative proceeding, arbitration or
other proceeding to which the Company is a party or of which the Company is
aware, pending or threatened, which might materially and adversely affect the
Condition of the Company, and none of which questions the validity or impairs
the ability of the Company to perform on a timely basis any obligation under
this Agreement or the or the other Related Documents or any action taken or to
be taken in connection herewith or therewith. None of the transactions
contemplated hereby or by any of the other Related Documents has been enjoined
by any Authority and no suit or other proceeding challenging the transactions
contemplated by the Related Documents (of which the Company has been served or
is aware) has been instituted or, to the best of the Company's knowledge,

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threatened and no investigative demand on the Company related to such
transactions has been made by any Authority. There are no unsatisfied judgments
or outstanding orders, injunctions, decrees, stipulations or awards against the
Company or any of its properties or assets that, individually or in the
aggregate, exceed $10,000 or otherwise have a material adverse effect on the
Condition of the Company.

                  2.8 Financial Statements. The financial statements of the
Company included in the SEC Reports and an unaudited income statement and
balance sheet for the three-month period ending August 31, 2000, attached hereto
as Schedule 2.8 (the "Financial Statements") (a) have been prepared (i) in
accordance with generally accepted accounting principles ("GAAP") (except that
the unaudited Financial Statements have not been reviewed by the independent
public accountants of the Company, and are expected to have adjustments as
described on Schedule 2.8(a), and do not contain footnotes and are subject to
year-end adjustments, which adjustments will not be material, individually or in
the aggregate), (ii) on a consistent basis for all periods presented, and (iii)
in accordance with the books and records of the Company, (b) are complete and
correct in all material respects, and (c) fairly present in all material
respects the financial condition of the Company as at said dates, and the
results of operations for the periods stated. As of the date hereof, there are
no liabilities or obligations of the Company ("Liabilities"), whether known or
unknown, accrued, absolute, contingent or otherwise, and whether due or to
become due, other than Liabilities that are reflected in the SEC Reports or the
Financial Statements or Liabilities incurred since the date of the Financial
Statements that are not and would not be, individually or in the aggregate,
material to the Condition of the Company. The Company is not aware of any
reasonable basis for the assertion against the Company of any other debt, duty,
liability, obligation or loss contingency other than Liabilities that are not
and would not be, individually or in the aggregate, material to the Condition of
the Company.

                  2.9 Use of Proceeds. The proceeds from the sale of the shares
of Common Stock shall be used solely for general corporate purposes. The
proceeds from the sale of the shares of Common Stock may not be used to redeem,
repurchase or otherwise acquire any shares of preferred stock, common stock or
other equity securities issued by the Company.

                  2.10 Intellectual Property.

                           (a) The Company owns, or has the contractual right to
use, sell or license all intellectual property necessary or required for the
conduct of its business as presently conducted and as proposed to be conducted,
including, without limitation, all trade secrets, processes, source code,
licenses, trademarks, service marks, trade names, logos, brands, copyrights,
patents, franchises, domain names, permits and Proprietary Information (all such
intellectual property and the rights thereto are collectively referred to as the
"Company IP Rights"), except for any failure to own or have the right to use,
sell or license that would not have a material adverse effect on the Condition
of the Company. Set forth in the SEC Reports or on Schedule 2.10 are all (i)
patents, applications for patents, registrations of trademarks and applications
therefor, and registrations of copyrights and applications therefor that are
owned by the Company, and (ii) unexpired licenses relating to the Company IP
Rights that have been granted to the Company and that are material to the
conduct of the Company's business as presently conducted or as proposed to be
conducted, but excluding end-user licenses granted to

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the Company relating to standard "off the shelf" software that is generally
available on commercially reasonable terms.

                           (b) Neither the execution, delivery and performance
of this Agreement or the other Related Documents nor the consummation of the
transactions contemplated hereby or thereby will (i) constitute a breach of any
instrument or agreement governing any Company IP Rights, (ii) cause the
forfeiture or termination or give rise to a right of forfeiture or termination
of any Company IP Rights or (iii) impair the right of the Company to use, sell
or license any Company IP Rights or portion thereof, except for any such breach,
forfeiture, termination, right of forfeiture or termination or impairment that
would not, individually or in the aggregate, have a material adverse effect on
the Condition of the Company.

                           (c) The manufacture, marketing, license, sale or
intended use of any product currently licensed or sold by the Company is not in
breach of any material license or agreement between the Company and any third
party or, to the best of the Company's knowledge, has not infringed and is not
infringing on any intellectual property right of any other party. To the best of
the Company's knowledge, there is no claim or litigation, pending or threatened,
which contests the validity, ownership or right to use, sell, license or dispose
of any Company IP Rights.

                           (d) Except as set forth on Schedule 2.10(d), the
Company owns the Company IP Rights free and clear of all liens or other
encumbrances. The Company has not received any communications alleging that the
Company has violated or, by conducting its business presently conducted or as
proposed to be conducted, violates or will violate any intellectual property
rights of any other person or entity. The Company is not aware that any of its
employees are obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere with
their duties to the Company or that would conflict with the Company's business
as presently conducted or as proposed to be conducted. Neither the execution nor
delivery of this Agreement or the other Related Documents, nor the carrying on
of the Company's business by the employees of the Company, nor the conduct of
the Company's business as presently conducted or as proposed to be conducted,
will conflict with or result in a breach of the terms, conditions or provisions
of, or constitute a default under, any contract, covenant or instrument under
which any employee is now bound. The Company does not believe it is or will be
necessary to utilize any inventions, trade secrets or proprietary information of
any of its employees (or people the Company currently intends to hire) made
prior to their employment by the Company, except for Company IP Rights that have
been assigned to the Company.

                           (e) The Company has taken reasonable security
measures to maintain the confidentiality of and to protect the Company IP
Rights. Each employee, consultant and officer of the Company has executed a
Company IP Rights and inventions agreement to protect the rights of the Company
to all Company IP Rights in substantially the form provided to the Investors.

                  2.11 Title to Property and Assets. The Company does not own
any real property. The Company has good and marketable title to or, in the case
of leases and licenses,

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has valid and subsisting leasehold interests or licenses in, all of its
properties and assets of whatever kind (whether real or personal, tangible or
intangible) free and clear of any liens or other encumbrances, except for liens
or other encumbrances that are not, individually or in the aggregate, material
to the Condition of the Company. No person other than the Company owns any
equipment or other tangible assets or property situated on the premises of the
Company that is necessary to the operation of the business of the Company as
conducted or as proposed to be conducted, except for leased items that are
leased. With respect to property leased by the Company, the Company has a valid
leasehold interest in such property pursuant to leases which are in full force
and effect, and the Company is in compliance in all material respects with the
material provisions of such leases. All facilities, equipment and other material
items of tangible property and assets of the Company are in good operating
condition and repair, subject to normal wear and maintenance, and conform to all
applicable Laws relating to their construction, use and operation.

                  2.12 Compliance with Laws. The Company is and has been in
compliance in all material respects with all Laws that are applicable to the
Company, the conduct of its business as presently conducted and as proposed to
be conducted, and the ownership of its property and assets (including, without
limitation, all occupational safety, health, wage and hour, employment
discrimination and environmental laws), and the Company, to its knowledge, is
not aware of any state of facts, events, conditions or occurrences which may now
or hereafter constitute or result in a violation of any of such Laws or which
may give rise to the assertion of any such violation, the effect of which could
have a material adverse effect on the Condition of the Company. All required
reports and filings with Authorities have been properly made as and when
required, except where the failure to report or file would not, individually or
in the aggregate, have a material adverse effect on the Condition of the
Company.

                  2.13 Licenses and Permits. The Company has obtained and
maintains all federal, state and local licenses, permits, consents, approvals,
registrations, memberships, authorizations and qualifications required to be
maintained in connection with and material to the operations of the Company as
presently conducted and as proposed to be conducted, and all such licenses,
permits, consents, approvals, registrations, memberships, authorizations and
qualifications obtained are valid and in full force and effect.

                  2.14 Related Entities. Except as set forth on Schedule 2.14,
the Company does not presently own or control, directly or indirectly, any
interest in any other subsidiary, corporation, association or other business
entity. The Company is not a party to any joint venture.

                  2.15 Related Party Transactions and Agreements.

                           (a) Except as disclosed in the SEC Reports or on
Schedule 2.15, there are no agreements, understandings or proposed transactions
(other than employer/employee relationships) between the Company, on the one
hand, and any of its respective officers, directors, shareholders (who hold one
percent or more of the Company's Common Stock (on a fully-diluted basis)) or any
affiliate thereof, on the other hand.

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                           (b) Except as disclosed on Schedule 2.15, no
employee, officer or director of the Company or shareholder who holds one
percent or more of the Company's Common Stock (on a fully-diluted basis) or
member of the immediate family of any of the foregoing (i) owns, directly or
indirectly, any interest in (except for less than 1% stock holdings for
investment purposes in securities of publicly traded companies), or is an
officer, director, employee or consultant of, any company which is or was
engaged in business as, a competitor, lessor, lessee, supplier or customer of
the Company; (ii) owns, directly or indirectly, as a whole or in part, any
tangible or intangible property that the Company uses or contemplates using in
the conduct of its business as presently conducted or as proposed to be
conducted; or (iii) has any cause of action or other claim whatsoever against,
or is owed any amount from, the Company, except as disclosed in the SEC Reports
and except for immaterial claims in the ordinary course of business, such as
accrued vacation pay, accrued benefits under employee benefit plans and medical,
dental and other similar health benefit plans existing on the date hereof.

                  2.16 Marketing Rights. The Company has not granted rights to
develop, license, market, distribute or sell its products or use any of its
Proprietary Information to any other person or entity and is not bound by any
agreement that affects the exclusive right of the Company to develop, license,
market, distribute or sell its products or any other products that utilize the
Proprietary Information.

                  2.17 Changes. Since the date of the most recent SEC Report,
the Company has operated its respective business diligently and in the ordinary
course of business and there has not been, or the Company has not caused,
permitted or suffered to exist:

                           (a) any material adverse change in the Condition of
the Company;

                           (b) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the Condition of the
Company;

                           (c) any waiver or compromise by the Company of a
valuable right or of a material debt owed it;

                           (d) sold, encumbered, assigned or transferred any
assets or properties of the Company, other than in the ordinary course of
business;

                           (e) incurred any liability other than in the ordinary
course of business;

                           (f) created, incurred, assumed or guaranteed any
indebtedness or subjected any of its assets to any lien or encumbrance, except
for indebtedness, liens or encumbrances that are not, individually or in the
aggregate, material to the Condition of the Company;

                           (g) declared, set aside or paid any dividends or made
any other distributions in cash or property on the Company's capital stock;

                           (h) directly or indirectly redeemed, purchased or
otherwise acquired any shares of capital stock of the Company;

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                           (i) suffered any resignation or termination of
employment of any key officers or employees;

                           (j) except in the ordinary course of business of the
Company, increased the compensation payable or to become payable by the Company
to any of its officers, employees or directors or increased any bonus,
insurance, pension or other employee benefit plan, payment or arrangement made
by the Company for or with any such officers, employees or directors;

                           (k) made any direct or indirect loan to any
shareholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;

                           (l) changed any agreement to which the Company is a
party which materially and adversely affects the Condition of the Company; or

                           (m) entered into any agreement or commitment to do
any of the things described in this Section 2.17.

                  2.18 Employee Benefit Plans. Set forth in the SEC Reports or
on Schedule 2.18 are all "employee benefit plans," as such term is defined in
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), to
which the Company has any liability or obligation, contingent or otherwise. All
such employee benefit plans comply and have been maintained and administered in
compliance with ERISA, the Code (as defined in Section 2.19) and all other
statutes, orders and governmental rules and regulations applicable to such
employee benefit plans. The Company does not maintain or contribute to, and has
not maintained or contributed to, any "multiemployer plan," as such term is
defined in ERISA.

                  2.19 Taxes. The Company has timely filed all tax returns and
reports (federal, state and local) as required by Law and these returns and
reports are true and correct in all material respects. The Company has paid all
taxes and other assessments shown to be due on such returns or reports. Neither
the Internal Revenue Service nor any state or local taxing authority has, during
the past three years, examined or informed the Company it is in the process of
examining, any such tax returns and reports. The provision for taxes of the
Company, as shown on the most recent Financial Statements, is adequate for taxes
due or accrued as of the date thereof. The Company has not elected, pursuant to
the Internal Revenue Code of 1986, as amended (the "Code"), to be treated as a
collapsible corporation pursuant to Section 341(f) of the Code, nor has it made
any other elections pursuant to the Code (other than elections that relate
solely to methods of accounting, depreciation or amortization) that would have a
material effect on the Condition of the Company.

                  2.20 Insurance. The Company has in full force and effect fire,
casualty and liability insurance policies, with extended coverage, sufficient in
amount (subject to reasonable deductibles) to allow the Company to replace any
of its properties that might be damaged or destroyed to the extent and in the
manner customary for companies in similar business similarly situated.

                  2.21 Employees. The Company does not have any collective
bargaining agreements with any of its employees. There is no labor union
organizing activity pending or, to

                                       10
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   12

the Company's knowledge, threatened with respect to the Company. Except as set
forth on Schedule 2.21, no employee has any agreement or contract, written or
verbal, regarding his employment contracts. Except as set forth in the SEC
Reports or on Schedule 2.21, the Company is not a party to or bound by any
deferred compensation arrangement, bonus plan, incentive plan, profit sharing
plan, retirement agreement or other employee compensation plan or agreement. The
Company is not aware that any officer or key employee, or that any group of key
employees, intends to terminate their employment with the Company, nor does the
Company have a present intention to terminate the employment of any of the
foregoing. Except as set forth on Schedule 2.21, the employment of each officer
and employee of the Company is terminable at the will of the Company. The
Company is and has been in compliance with all applicable Laws regulating
employment and employment practices or prescribing terms and conditions of
employment, wages and hours and the provisions of all Laws applicable to any
employee benefit, stock option or other similar plan maintained or contributed
to by the Company for the benefit of its employees, and there are no claims
(other than routine claims for benefits and claims in connection with
terminations of employment) pending or threatened with respect to any of such
plans or arrangements.

                  2.22 Material Contracts. Set forth in the SEC Reports and on
Schedule 2.22, are all material contracts, agreements, commitments and
arrangements that require capital expenditures or payments in excess of $25,000
or that are otherwise material, necessary or otherwise desirable to conduct the
Company's business as presently conducted or as proposed to be conducted
("Material Contracts"). The Material Contracts are valid and in full force and
effect as to the Company, and, to the best of the Company's knowledge, to the
other parties thereto. Except as otherwise disclosed herein, the Company is not
in violation of, or default under (and there does not exist any event or
condition which, after notice or lapse of time or both, would constitute such a
default under), the Material Contracts, except to the extent that such
violations or defaults, individually or in the aggregate, could not reasonably
be expected to (a) affect the validity of this Agreement or the other Related
Documents, (b) have a material adverse effect on the Condition of the Company,
or (c) impair the ability of the Company to perform fully on a timely basis any
material obligation which the Company has or will have under this Agreement or
the other Related Documents. To the Company's knowledge, none of the other
parties to any Material Contract are in violation of or default under any
Material Contract in any respect that would result in a material adverse effect
on the Condition of the Company. The Company has not received any notice of
cancellation or any written communication threatening cancellation of any
Material Contract by any other party thereto. The Company is not a party to and
is not bound by any contract, agreement or instrument, or subject to any
restriction under its articles of incorporation, as amended, bylaws or other
governing documents that materially adversely affects (i) it business as
presently conducted or as proposed to be conducted or (ii) the Condition of the
Company.

                  2.23 Real Property Holding Company. The Company is not a real
property holding company within the meaning of Section 897 of the Code.

                  2.24 Significant Customers and Suppliers. No customer or
supplier that was significant to the Company during the period covered by the
Financial Statements or that has been significant to the Company thereafter, has
terminated, materially reduced or threatened to

                                       11
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   13

terminate or material reduce its purchases from or provision of products or
services to the Company.

                  2.25 Brokers and Finders. Except as set forth on Schedule
2.25, the Company has not employed any broker, finder, consultant or
intermediary in connection with the transactions contemplated by this Agreement
that would be entitled to a broker's, finder's or similar fee or commission in
connection herewith and therewith.

                  2.26 Registration Rights. Except as provided by the Investors'
Rights Agreement and on Schedule 2.26, the Company is not under any obligation
to register any presently outstanding securities, or any securities which may
hereafter be issued, under the Securities Act of 1933, as amended.

                  2.27 Foreign Corrupt Practices. Neither the Company nor any
director, officer, employee, agent or other person acting on behalf of the
Company has, in the course of that person's actions for, or on behalf of, the
Company, (a) used any corporate assets for any unlawful contribution, gift,
entertainment or other unlawful expenses relating to political activity, (b)
made any direct or indirect unlawful payment to any foreign or domestic
governmental official or employee, (c) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, or (d) made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic governmental official or employee.

                  2.28 Form SB-2 Eligibility. The Company is currently eligible
to register the resale of its Common Stock on a registration statement on Form
SB-2 under the Securities Act.

                  2.29 Disclosure. This Agreement, Schedules and Exhibits
hereto, the other Related Documents, and all other documents delivered to the
Investors in connection herewith or therewith at the Closing, do not contain any
untrue statement of a material fact, or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading. There are no facts that, individually or in the
aggregate, materially adversely affect the Condition of the Company that has not
been disclosed to the Investors in this Agreement (including the Schedules and
Exhibits hereto), the other Related Documents and all other documents delivered
to the Investors in connection herewith or therewith at the Closing.

         3. Representations and Warranties of each Investor. Each Investor,
severally but not jointly, represents and warrants that:

                  3.1 Investment Intent. The Investor is acquiring the Common
Stock and the Warrants (collectively, the "Securities") pursuant to this
Agreement with his, her or its own funds for his, her or its own account and not
as a nominee or agent for the account of any other person. No other person has
any interest, beneficial or otherwise, in any of the Securities to be purchased
by the Investor. Except as provided herein, the Investor is not obligated to
transfer any Securities to any other person, nor does the Investor have any
agreement or understanding with any other person to do so. The Investor is
purchasing the Securities for investment purposes and not with a view to the
sale or distribution of any Securities, by public or private sale or other
disposition, and the Investor has no intention of selling, granting any
participation

                                       12
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   14

in or otherwise distributing or disposing of any of the Securities. Except as
provided in Section 6 hereof, the Investor does not intend to subdivide or
transfer to any other person the Securities acquired by the Investor herewith.
Notwithstanding the foregoing, the disposition of the Investor's property shall
be at all times within the Investor's own control, and the Investor's right to
sell or otherwise dispose of all or any part of the Securities purchased by it
pursuant to an effective registration statement under the Securities Act or
under an exemption under the Securities Act shall not be prejudiced; provided,
that the Investor complies with Section 6 herein. Nothing herein shall prevent
the distribution of any Securities to any member, partner or stockholder, former
member, partner or stockholder of the Investor in compliance with the Securities
Act and applicable state "blue sky" laws.

                  3.2 No Public Offering. The Investor is able to bear the
economic risk of his, her or its investment in the Securities. The Investor is
aware that it must be prepared to hold the Securities for an indefinite period
and that the Securities have not been, and when issued will not be, registered
under the Securities Act or registered or qualified under any state securities
law, on the ground that the Securities are being issued by the Company without
any public offering within the meaning of Section 4(2) of the Securities Act.
The Investor has had an opportunity to discuss the Company's business,
management and financial affairs with the Company's management. The Investor is
not subscribing for the Securities as a result of or subsequent to any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio or
any solicitation of a subscription by any person not previously known to the
Investor in connection with investments in securities generally.

                  3.3 Certificates to be Legended. The Investor understands that
each stock certificate representing Securities acquired hereunder will bear a
legend on the face thereof (or on the reverse thereof with a reference to such
legend on the face thereof) required by the SEC or a state securities
commission.

                  3.4 Securities Will be "Restricted Securities". The Investor
understands that the Securities will be "restricted securities" as that term is
defined in Rule 144 promulgated under the Securities Act and, accordingly, that
the Securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
The Investor understands and agrees that, except as provided herein and in the
Investors' Rights Agreement, the Company is not under any obligation to register
the Securities under the Securities Act or to comply with Regulation A or any
other exemption.

                  3.5 Accredited Investor. The Investor has been advised or is
aware of the provisions of Regulation D under the Securities Act relating to the
accreditation of investors, and the Investor is an "accredited investor" as
defined in Rule 501 of Regulation D promulgated under the Securities Act.

                  3.6 Sophistication of the Investor. The Investor has such
knowledge and experience in financial and business matters that the Investor is
capable of evaluating the merits and risks of the investment contemplated by
this Agreement and has the capacity to protect his, her or its own interests.
The Investor acknowledges that investment in the Securities is highly
speculative and involves a substantial and high degree of risk of loss of the
Investor's entire

                                       13
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   15

investment. The Investor has adequate means of providing for current and
anticipated financial needs and contingencies, is able to bear the economic risk
of the investment for an indefinite period of time and has no need for liquidity
of the investment in the Securities and could afford complete loss of such
investment.

                  3.7 Brokers' Fees. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated hereby based upon arrangements made by or on
behalf of the Investor.

                  3.8 Organization. Unless the Investor is an individual, the
Investor is a corporation, limited liability company or limited partnership, as
the case may be, duly organized, validly existing and in good standing in the
jurisdiction of its formation. The Investor has all requisite power and
authority to execute, deliver and carry out the terms of this Agreement and the
Investors' Rights Agreement.

                  3.9 Execution and Binding Effect. The execution and delivery
of this Agreement and the Investors' Rights Agreement and the consummation of
the transactions contemplated hereby or thereby have been duly authorized by all
necessary action on the part of the Investor. Upon the execution and delivery by
the Investor, this Agreement and the Investors' Rights Agreement shall
constitute the legal, valid and binding obligations of the Investor enforceable
against the Investor in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, liquidation,
reorganization, moratorium or other laws relating to or limited creditors'
rights generally or by equitable principles relating to enforceability.

         4. The Investor's Conditions to each Closing. Each Investor's
obligation to purchase and pay for the shares of Common Stock to be sold to such
Investor at the applicable Closing and the issuance of the Warrants is subject
to the fulfillment to such Investor's satisfaction, prior to or at the such
Closing, of the following conditions:

                  4.1 Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true and correct when
made and as of the applicable Closing with the same effect as though such
representations and warranties had been made on and as of the date of such
Closing, except to the extent of changes caused by transactions expressly
contemplated herein.

                  4.2 Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed by it or with which it is required to have complied
on or before the applicable Closing.

                  4.3 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the applicable
Closing and all documents incident thereto shall be reasonably satisfactory in
form and substance to the Investor, and the Investor shall have received all
such counterpart original and certified or other copies of such documents as
they may reasonably request.

                                       14
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   16

                  4.4 Securities Compliance. Upon the filing of its Form D in
the appropriate jurisdictions, the Company shall have taken all action necessary
to comply with any federal or state securities laws applicable to the
transactions contemplated hereunder.

                  4.5 Consents, Permits, and Waivers. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by this Agreement and the
Investors' Rights Agreement (except for such as may be properly obtained
subsequent to the applicable Closing).

                  4.6 Compliance Certificate. The Company shall deliver to each
Investor at the applicable Closing, relating to such Investor's purchase of
shares of Common Stock and the issuance of the Warrants, a certificate signed by
the President of the Company stating that the Company has complied with or
satisfied each of the conditions to the Investor's obligation to consummate the
applicable Closing set forth in Sections 4.1 through 4.5, unless waived in
writing by the Investor.

                  4.7 Investors' Rights Agreement. The Investors' Rights
Agreement, in the form attached hereto as Exhibit B, shall have been executed by
all the parties thereto on or prior to the applicable Closing.

                  4.8 Stock Certificate. The Company shall deliver to each
Investor at the applicable Closing a duly executed stock certificate evidencing
the shares of Common Stock purchased by such Investor at such Closing.

                  4.9 Warrants. The Company shall deliver to each Investor at
the applicable Closing a duly executed Warrant.

                  4.10 Opinion of Counsel. The Company shall deliver to each
Investor at the applicable Closing an opinion of counsel for the Company, dated
as of such Closing, in the form attached hereto as Exhibit C.

                  4.11 Expenses. The Company shall pay (i) the legal fees and
expenses of Shartsis, Friese & Ginsburg LLP (legal counsel only for ICM Asset
Management, Inc.), in an amount not to exceed $15,000, incurred in connection
with the First Closing under this Agreement, the Other Related Documents and the
transactions contemplated hereby and thereby and (ii) the legal fees and
expenses of Shartsis, Friese & Ginsburg LLP, in an amount not to exceed $3,000
with respect to each subsequent Closing, incurred in connection with each
subsequent Closing contemplated by this Agreement. The Company shall pay the
reasonable fees and out of pocket expenses of Raven Ventures, LLC, in an amount
not to exceed $5,000, incurred in connection with the transactions contemplated
by this Agreement, the Other Related Documents and the transactions contemplated
hereby and thereby.

                  4.12 Due Diligence. The Investors shall have completed due
diligence to their satisfaction.

                  4.13 Legal Matters. All matters of a legal nature which
pertain to this Agreement and the transactions contemplated hereby shall have
been approved by counsel to the Investors.

                                       15
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   17

         5. The Company's Conditions to each Closing. The Company's obligation
to deliver the shares of Common Stock and issuance of the Warrants at the
applicable Closing is subject to the fulfillment to the Company's satisfaction,
prior to or at such Closing, of the following conditions:

                  5.1 Representations and Warranties. The representations and
warranties of each Investor participating in the applicable Closing contained in
Section 3 hereof shall be true and correct on and as of such Closing.

                  5.2 Performance. Each Investor participating in the applicable
Closing shall have performed and complied with all agreements, obligations, and
conditions contained in the Agreement that are required to be performed by it or
them or with which it or they are required to have complied on or before such
Closing.

                  5.3 Payment. Each Investor participating in the applicable
Closing shall have delivered the consideration specified in Section 1 for each
share of Common Stock purchased by the Investor at such Closing.

                  5.4 Legal Matters. All matters of a legal nature which pertain
to this Agreement and the transactions contemplated hereby shall have been
approved by counsel to the Company.

         6. Transfer of Securities.

                  6.1 Restrictions on Transfer. The Securities are not
transferable except upon the conditions specified in the Investors' Rights
Agreement and applicable federal and state securities laws.

                  6.2 Restrictive Legends. The Warrants and the stock
certificates representing the shares of Common Stock shall be stamped or
otherwise imprinted with legends in substantially the following forms:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
         SECURITIES LAWS AND THUS MAY NOT BE TRANSFERRED UNLESS REGISTERED OR
         QUALIFIED UNDER THAT ACT OR SUCH LAWS OR UNLESS, IN THE OPINION OF
         COUNSEL REASONABLY SATISFACTORY TO THE ISSUER, AN EXEMPTION FROM
         REGISTRATION OR QUALIFICATION IS AVAILABLE.

         7. Miscellaneous.

                  7.1 Survival of Warranties. The warranties, representations
and covenants of the Company and each Investor contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closings.

                                       16
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   18

                  7.2 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investors
holding more than 50% of the outstanding shares of Common Stock acquired
hereunder. Any amendment or waiver effective in accordance with this Section 7.2
shall be binding upon each Investor, his, her or its heirs, representatives or
permitted assigns, and the Company and its heirs, representatives and permitted
assigns.

                  7.3 Notices. Any notice, consent, authorization or other
communication to be given hereunder shall be in writing and shall be deemed duly
given and received when delivered personally or transmitted by facsimile
transmission with receipt acknowledged by the addressee or three days after
being mailed by first class mail, or the next business day after being deposited
for next-day delivery with a nationally recognized overnight delivery service,
charges and postage prepaid, properly addressed to the party to receive such
notice at the address(es) specified on the signature page of this Agreement for
the Company and each Investor (or at such other address as shall be specified by
like notice).

                  7.4 Entire Agreement. This Agreement (including the Schedules
and Exhibits, and the Warrants and the Investors' Rights Agreement) contains the
entire agreement of the parties and supersede all prior negotiations,
correspondence, term sheets, agreements and understandings, written and oral,
between or among the parties regarding the subject matter hereof.

                  7.5 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the respective heirs, representatives, successors
and permitted assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective heirs, representatives, successors and permitted assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.

                  7.6 Severability. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid or unenforceable, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those to which it is held
to be invalid or unenforceable, shall not be affected thereby.

                  7.7 Governing Law. This Agreement shall be governed by and
construed and interpreted in accordance with the law of the State of Washington,
without regard to that state's conflict of laws principles. All disputes between
the parties hereto, whether sounding in contract, tort, equity or otherwise,
shall be resolved only by state and federal courts located in Spokane,
Washington, and the courts to which an appeal therefrom may be taken. All
parties hereto waive any objections to the location of the above referenced
courts, including but not limited to any objection based on lack of
jurisdiction, improper venue or forum non-conveniens. Notwithstanding the
foregoing, any party obtaining any order or judgment in any of the above
referenced courts may bring an action in a court in another jurisdiction in
order to enforce such order or judgment.

                                       17
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   19

                  7.8 Attorneys' Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement or the other
Related Documents, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.

                  7.9 Interpretation. This Agreement shall be construed
according to its fair language. The rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Agreement.

                  7.10 Further Assurances. Each party shall execute such other
and further certificates, instruments and other documents as may be reasonably
necessary and proper to implement, complete and perfect the transactions
contemplated by this Agreement.

                  7.11 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall constitute an original, and all of
which together shall be considered one and the same agreement.

                  7.12 Assignment. Each Investor may assign or transfer all or
any part of the Securities acquired hereunder provided that the conditions
specified in Section 6 are satisfied, which conditions are, among other things,
intended to insure compliance with the provisions of the Securities Act and
state securities laws in respect of the transfer of any of the Securities
acquired hereunder. The Company shall not assign this Agreement or any rights
hereunder or delegate any duties hereunder. Any attempted or purported
assignment or delegation in violation of the preceding sentence shall be void.

                  7.13 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                  7.14 Exculpation Among Investors. Each Investor acknowledges
that it is not relying upon any person, firm or corporation, other than the
Company and its officers and directors, in making its investment or decision to
invest in the Company. Each Investor agrees that no Investor nor the respective
controlling person, officers, directors, partners, agents or employees of any
Investor shall be liable to any other Investor for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the
purchase of the Common Stock or the execution of or performance under any of
this Agreement or the Other Related Documents.

                  7.15 Representation. Each party hereto acknowledges that (a)
ICM Asset Management, Inc. retained SF&G to represent ICM Asset Management, Inc.
and its affiliates (collectively, "ICM") in connection with this Agreement, the
other Related Documents and the transaction related hereto and thereto, (b) the
interests of ICM may not necessarily coincide with the interests of other
Investors, (c) SF&G does not represent any Investor other than ICM, and (d) each
Investor has consulted with, or has had an opportunity to consult with, its own
legal counsel and has not relied on SF&G for legal counsel in connection with
this Agreement, the other Related Documents and the transactions related hereto
and thereto.

                                       18
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   20

         8. Glossary. For purposes of this Agreement, the following terms shall
have the meanings set forth below, which shall be equally applicable to both the
singular and plural forms of any of such terms:

         "Authority" shall mean any government or political subdivision, or any
agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury, arbitrator or
mediator, in each case whether federal, state, local or foreign.

         "Law" shall mean any judgment, decree, order, statute, law, ordinance,
rule or regulation of any Authority (including common law), constitution,
statute, treaty, regulation, rule, ordinance, judgment, order, foreign
injunction, writ, decree or award of any Authority.

         "Proprietary Information" shall mean all trade secrets, technical
knowledge and experience, confidential information and other proprietary
knowledge, whether or not patentable, possessed by, accumulated or owned by the
Company concerning the design, formulation, manufacturing, quality control,
testing, storage, development, improvement, installation and operation of the
products and services of the Company, including, without limitation, the Company
IP Rights, technical, engineering and operating data relating to the products,
designs, schematics, plans, operating principles, formulas, computer software
programs, electronically recordable data or concepts, marketing data,
inventions, improvements, research and development records and reports,
experimental and engineering reports, product specifications, drawings,
photographs, models, compilations of information, records, books and papers,
quality control reports and specifications, and any other information possessed
by the Company, relating to its products or services.

         "Related Documents" shall mean this Agreement, the Investors' Rights
Agreement (including the exhibits attached thereto) and the Warrants.

                     [Signatures appear on following page.]

                                       19
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   21

         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first set forth above.

                                    "COMPANY"

                                    ELITE LOGISTICS, INC.

                                    By:
                                        ---------------------------------------
                                    Name: Joseph D. Smith:
                                    President/CEO

                                    1201 N Ave. H
                                    Freeport, TX 77541
                                    (979) 230-0222
                                    (979) 230-0122 Fax

                                    with a copy to:

                                    Adrienne Randle Bond, Esq.
                                    Bond & Taylor LLP
                                    1021 Main St., Suite 1940
                                    Houston, TX 77002
                                    (713) 759-9970
                                    (713) 759-1980 Fax

                                    "INVESTOR"

                                    KOYAH LEVERAGE PARTNERS, L.P.

                                    By: Koyah Ventures LLC, its general partner

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

                                    c/o ICM Asset Management, Inc.
                                    601 West Main Avenue, Suite 600
                                    Spokane, WA 99201
                                    Attn: Robert Law, Esq.
                                    Tel: (509) 455-3588
                                    Fax: (509) 444-4500

                                    S-1
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   22

                                    with copies to:
                                    Shartsis, Friese & Ginsburg LLP
                                    One Maritime Plaza, 18th Floor
                                    San Francisco, CA 94111
                                    Attn: John F. Milani, Esq.
                                    Tel: (415) 421-6500
                                    Fax: (415) 421-2922

                                    "INVESTOR"

                                    KOYAH PARTNERS, L.P.

                                    By: Koyah Ventures LLC, its general partner

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

                                    c/o ICM Asset Management, Inc.
                                    601 West Main Avenue, Suite 600
                                    Spokane, WA 99201
                                    Attn: Robert Law, Esq.
                                    Tel: (509) 455-3588
                                    Fax: (509) 444-4500

                                    with copies to:
                                    Shartsis, Friese & Ginsburg LLP
                                    One Maritime Plaza, 18th Floor
                                    San Francisco, CA 94111
                                    Attn: John F. Milani, Esq.
                                    Tel: (415) 421-6500
                                    Fax: (415) 421-2922

                                    "INVESTOR"

                                    -------------------------------------------
                                    Scott Atkison

                                    Address:
                                             ----------------------------------

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

                                             ----------------------------------
                                    Tel:
                                             ----------------------------------
                                    Fax:
                                             ----------------------------------

                                    S-2
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   23

                                    "INVESTOR"

                                    -------------------------------------------
                                    Nigel Davey

                                    Address:
                                             ----------------------------------

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

                                             ----------------------------------
                                    Tel:
                                             ----------------------------------
                                    Fax:
                                             ----------------------------------

                                    S-3
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   24

                                    EXHIBIT A

                                 FORM OF WARRANT

COMMON STOCK PURCHASE AGREEMENT
<PAGE>   25

                                    EXHIBIT B

                           INVESTORS' RIGHTS AGREEMENT

COMMON STOCK PURCHASE AGREEMENT
<PAGE>   26

                              SCHEDULE OF INVESTORS

<TABLE>
<CAPTION>
INVESTOR                                       SHARES     INVESTMENT AMOUNT
--------                                       -------    -----------------

<S>                                            <C>        <C>
Koyah Leverage Partners, L.P.                  444,445       $600,000.75

Koyah Partners, L.P.                           111,111       $149,999.85

Scott Atkison                                    7,407       $  9,999.45

Nigel Davey                                      7,407       $  9,999.45
                                               -------       -----------
TOTAL                                          570,370       $769,999.50
</TABLE>

COMMON STOCK PURCHASE AGREEMENT
<PAGE>   27

                              ELITE LOGISTICS, INC.

                               FIRST AMENDMENT TO
                         COMMON STOCK PURCHASE AGREEMENT

         THIS FIRST AMENDMENT TO COMMON STOCK PURCHASE AGREEMENT (this
"Amendment") is entered into as of October 20, 2000, by and among Elite
Logistics, Inc., an Idaho corporation (the "Company"), and the parties listed on
the Schedule of Investors attached hereto (each, an "Investor"), with reference
to the following facts:

         WHEREAS, the Company and the Investors desire to amended that certain
Common Stock Purchase Agreement (the "Stock Purchase Agreement"), dated as of
October 13, 2000, by and among the Company and the Investors.

         NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and conditions set forth in this Amendment, the parties agree
as follows:

         1. Amendment to Section 1.4(c) of the Stock Purchase Agreement. Section
1.4(c) of the Stock Purchase Agreement is hereby amended by adding the following
sentence at the end of that Section.

                  "Anything herein to the contrary notwithstanding, no
                  individual Approved Investor shall have a right to acquire
                  those shares of Common Stock under this Section 1.4(c), which,
                  when added with all other shares of equity securities
                  (including, without limitation, all issued and outstanding
                  options and warrants on an as-converted basis) then held by
                  such Approved Investor, result in such Approved Investor
                  holding ten percent (10%) or more of the Company's issued and
                  outstanding equity securities (including, without limitation,
                  all issued and outstanding options and warrants on an
                  as-converted basis)."

         2. Miscellaneous.

                  2.1 Governing Law. This Amendment shall be governed by and
construed and interpreted in accordance with the law of the State of Washington,
without regard to that state's conflict of laws principles.

                  2.2 Counterparts. This Amendment may be executed in any number
of counterparts, each of which shall constitute an original, and all of which
together shall be considered one and the same agreement.

                  2.3 Reference to Stock Purchase Agreement. On and after the
date hereof, each reference in the Stock Purchase Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import referring to the Stock
Purchase Agreement, and each reference in the other Related Documents to the
Stock Purchase Agreement, shall mean and be a reference to the Stock Purchase
Agreement as amended by this Amendment

                     [Signatures appear on following page.]

FIRST AMENDMENT TO
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   28

         IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and delivered as of the date first set forth above.

                                    "COMPANY"

                                    ELITE LOGISTICS, INC.

                                    By:
                                        ---------------------------------------
                                    Name: Joseph D. Smith:
                                    President/CEO

                                    "INVESTORS"

                                    KOYAH LEVERAGE PARTNERS, L.P.

                                    By: Koyah Ventures LLC, its general partner

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

                                    KOYAH PARTNERS, L.P.

                                    By: Koyah Ventures LLC, its general partner

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

                                    -------------------------------------------
                                    Scott Atkison

                                    -------------------------------------------
                                    Nigel Davey

                                     S-1

FIRST AMENDMENT TO
COMMON STOCK PURCHASE AGREEMENT
<PAGE>   29

                              SCHEDULE OF INVESTORS

Koyah Leverage Partners, L.P.

Koyah Partners, L.P.

Scott Atkison

Nigel Davey

FIRST AMENDMENT TO
COMMON STOCK PURCHASE AGREEMENT<PAGE>   1

                              ELITE LOGISTICS, INC.

                           INVESTORS' RIGHTS AGREEMENT

                          Dated as of October 13, 2000

<PAGE>   2

                           INVESTORS' RIGHTS AGREEMENT

         THIS INVESTORS' RIGHTS AGREEMENT is made as of October 13, 2000, by and
among Elite Logistics, Inc., an Idaho corporation (the "Company"), and the
Investors listed on Schedule A hereto (each of whom is herein called
individually, a "Investor" and all of whom are herein called, collectively, the
"Investors"), with reference to the following facts:

         The Investors are parties to the Common Stock Purchase Agreement, dated
as of October 13, 2000 (the "Purchase Agreement"), among the Company and the
Investors, which provides that as a condition to the closing of the transactions
contemplated therein, pursuant to which the Company will issue up to 1,125,926
shares of the Company's Common Stock, par value $0.01 per share (the "Common
Stock"), to the Investors, this Agreement must be executed and delivered by the
Investors and the Company.

         NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein and for other consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto further agree as follows:

         1. Registration Rights. The Company covenants and agrees as follows:

                  1.1 Definitions. For purposes of this Section 1:

                           (a) "Form S-3" means such form under the 1933 Act as
in effect on the date hereof or any registration form under the 1933 Act
subsequently adopted by the SEC that permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.

                           (b) "Holder" means any person owning or having the
right to acquire Registrable Securities or any assignee thereof in accordance
with Section 1.11 hereof.

                           (c) "1933 Act" means the Securities Act of 1933, as
amended.

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

                           (e) "register", "registered", and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the 1933 Act, and the
declaration or ordering of effectiveness of such registration statement or
document.

                           (f) "Registrable Securities" means (i) the shares of
the Company's Common Stock issued pursuant to the Purchase Agreement, (ii)
shares of the Company's Common Stock previously acquired by the Investors and
listed on Schedule B hereto, (iii) shares of the Company's Common Stock issuable
on exercise of the Warrants (as defined in the Purchase Agreement) issued
pursuant to the Purchase Agreement, (iv) shares of the Company's

<PAGE>   3

Common Stock issuable on exercise of the Registration Warrants (as defined in
Section 1.3(c)), and (v) any Common Stock of the Company issued as (or issuable
on the conversion or exercise of any warrant, right or other security that is
issued as) a dividend or other distribution with respect to, or in exchange for,
or in replacement of, the shares referenced in clauses (i) - (iv) above;
provided that there shall be excluded any Registrable Securities sold by a
person in a transaction in which that person's rights under this Section 1 are
not assigned.

                           (g) The number of shares of "Registrable Securities"
outstanding shall be determined by the number of shares of Common Stock
outstanding that are, and the number of shares of Common Stock issuable pursuant
to then exercisable or convertible securities that are, Registrable Securities.

                           (h) "SEC" means the Securities and Exchange
Commission.

                  1.2 [Intentionally Omitted].

                  1.3 Request for Registration.

                           (a) If, at any time on or after December 12, 2000 (or
an earlier date, with the consent of the Company), the Company shall receive a
written request from Holders of at least twenty percent of the Registrable
Securities then outstanding that the Company file a registration statement under
the 1933 Act, then the Company shall prepare and file with the SEC a
registration statement on Form SB-1 or SB-2 (or, if Form SB-1 or SB-2 is not
then available, on such form of registration statement that is then available to
effect a registration of all Registrable Securities, subject to consent of the
Investors holding at least a majority of the Registrable Securities) covering
the registration of all of the Registrable Securities. The Company shall use
best efforts to obtain the effectiveness of the Registration Statement as soon
as possible after the date of such request, but in any event not later than the
thirtieth day after the date of such request. The Company shall keep such
registration statement effective at all times until the earlier of the date on
which all the Registrable Securities (i) are sold and (ii) can be sold by the
Holders (and any affiliate of the Holder with whom such Holder must aggregate
its sales under Rule 144) in any three-month period without volume limitation
and without registration in compliance with Rule 144 under the 1933 Act.

                           (b) If the Holders initiating the registration
request hereunder ("Initiating Holders") intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to Section 1.3(a).
The underwriter will be selected by a majority in interest (as determined by the
number of Registrable Securities held) of the Initiating Holders and shall be
reasonably acceptable to the Company. In such event, the right of any Holder to
include his, her or its Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders
and such Holder) to the extent provided herein. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company as provided in Section 1.6(e)) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provision of this

                                       2
<PAGE>   4

Section 1.3, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, then the Initiating Holders shall so advise all Holders of
Registrable Securities that would otherwise be underwritten pursuant hereto, and
the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all Holders thereof, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount of
Registrable Securities of the Company owned by each Holder; provided, however,
that the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting.

                           (c) If the registration statement described in
Section 1.3(a) is not declared effective within thirty days after the receipt of
the notice described in Section 1.3(a), the Company shall issue to each Investor
a warrant in the form attached hereto as Exhibit A (each, a "Registration
Warrant" and, collectively, the "Registration Warrants") to acquire the number
of shares of Common Stock equal to (i) 100,000 multiplied by (ii) a fraction,
the numerator of which is the number of shares of Common Stock acquired by that
Investor pursuant to the Purchase Agreement and the denominator of which is
equal to the number of shares of Common Stock sold under the Purchase Agreement.
The exercise price of each such Registration Warrant will be $1.35 per share of
Common Stock issuable on exercise of the Registration Warrant.

                           (d) At the end of each thirty-day period (or a
portion thereof) (i) after the initial thirty-day period referred to in Section
1.3(c) that the registration statement described in Section 1.3(a) is not
declared effective or (ii) that the registration statement described in Section
1.3(a) is no longer deemed to be effective after the initial effectiveness, the
Company shall issue to each Investor a Registration Warrant to acquire the
number of shares of Common Stock equal to (i) 100,000 multiplied by (ii) a
fraction, the numerator of which is the number of shares of Common Stock
acquired by that Investor pursuant to the Purchase Agreement and the denominator
of which is equal to the number of shares of Common Stock sold under the
Purchase Agreement, multiplied by (iii) a fraction, the numerator of which is
the number of days during such thirty-day period that the registration statement
is not declared effective and the denominator of which is thirty. The exercise
price of each such Registration Warrant will be $1.35 per share of Common Stock
issuable on exercise of the Registration Warrant.

                           (e) The Company shall execute such other and further
certificates, instruments and other documents as may be reasonably requested by
the Investors or reasonably necessary or proper to implement, complete and
perfect the Investors' rights under this Section 1.3 and to freely trade the
Registrable Securities without limitation or restriction imposed or created by
the Company or securities law.

                           (f) The terms and covenants set forth in this Section
1.3 shall terminate as to each Holder and be of no further force and effect on
the earlier of the date on which all the Registrable Securities beneficially
owned by that Holder (i) are registered pursuant to this Section 1.3 and sold by
that Holder in an open market transaction or (ii) can be sold by that Holder
(and any affiliate of the Holder with whom such Holder must aggregate its sales
under Rule 144) in any three-month period without volume limitation and without
registration in compliance with Rule 144 under the 1933 Act.

                                       3
<PAGE>   5

                  1.4 Company Registration.

                           (a) If (but without any obligation to do so) the
Company proposes to register any of its stock (including a registration effected
by the Company for stockholders other than the Holders) or other securities
under the 1933 Act in connection with the public offering of such securities,
the Company shall, at such time, promptly give each Holder notice of such
registration. On the request of each Holder given within thirty (30) days after
such notice by the Company, the Company shall, subject to the provisions of
Section 1.4(c), cause to be registered under the 1933 Act all of the Registrable
Securities that each such Holder has requested to be registered.

                           (b) The Company shall have the right to terminate or
withdraw any registration initiated by it under this Section 1.4 prior to the
effectiveness of such registration, whether or not any Holder shall have elected
to include securities in such registration. The expenses of such withdrawn
registration shall be borne by the Company in accordance with Section 1.8
hereof.

                           (c) In connection with any offering involving an
underwriting of shares of the Company's capital stock, the Company shall not be
required under this Section 1.4 to include any requesting Holder's securities in
such underwriting, unless such Holder accepts the terms of the underwriting as
agreed between the Company and the underwriters selected by it (or by other
persons entitled to select the underwriters) and enters into an underwriting
agreement in customary form with the underwriter or underwriters selected by the
Company, and then only in such quantity as the underwriters determine in their
sole discretion will not jeopardize the success of the offering by the Company.
If the total amount of securities, including Registrable Securities, requested
by the Holders to be included in such offering exceeds the amount of Registrable
Securities sold other than by the Company that the underwriters determine in
their sole discretion is compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of such
Registrable Securities that the underwriters determine in their sole discretion
will not jeopardize the success of the offering (the Registrable Securities so
included to be apportioned pro rata among the selling Holders according to the
total amount of Registrable Securities entitled to be included therein owned by
each selling Holder or in such other proportions as shall mutually be agreed to
by such selling Holders); provided, that in no event shall the amount of
Registrable Securities of the selling Holders included in the offering be
reduced below twenty-five percent of the total amount of securities included in
such offering; provided further, that the number of shares of Registrable
Securities requested by the Holders to be included in such offering shall not be
reduced unless all other securities, other than securities registered by the
Company, are first entirely excluded from such offering. For purposes of such
apportionment among Holders, for any selling stockholder that is a Holder of
Registrable Securities and that is a partnership or corporation, the partners,
retired partners and stockholders of such Holder, or the estates and family
members of any such partners and retired partners and any trusts for the benefit
of any of the foregoing persons shall be deemed to be a single "selling Holder",
and any pro rata reduction with respect to such "selling Holder" shall be based
on the aggregate amount of Registrable Securities owned by all such related
entities and individuals.

                                       4
<PAGE>   6

                  1.5 Form S-3 Registration. If, at any time on or after the
date the Company qualifies to use Form S-3, the Company shall receive from one
or more Holders a request or requests that the Company effect a registration on
Form S-3 and any related blue sky or similar qualification or compliance with
respect to at least twenty-five percent (or a lesser percentage if the
requirements of Section 1.5(b)(i) are met) of the Registrable Securities owned
by such Holder or Holders, the Company shall:

                           (a) promptly give notice of the proposed
registration, and any related blue sky or similar qualification or compliance,
to all other Holders; and

                           (b) cause, as soon as practicable, such Registrable
Securities to be registered for offering and sale on Form S-3 and cause such
Registrable Securities to be qualified in such jurisdictions as such Holders may
reasonable request, together with all or such portion of the Registrable
Securities of any other Holders joining in such request as are specified in a
request given within fifteen days after receipt of such notice from the Company;
provided that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 1.5:

                                    (i) if the Holders, together with the
holders of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other securities
(if any) at an aggregate price to the public of less than $500,000;

                                    (ii) if the Company has, within the twelve
month period preceding the date of such request, already effected two
registrations on Form S-3 for the Holders pursuant to this Section 1.5;

                                    (iii) if the Company shall furnish to the
Holders a certificate signed by the Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such Form S-3 Registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3 registration
statement for a period of not more than sixty (60) days after receipt of the
request of the Holder or Holders under this Section 1.5; provided that the
Company shall not utilize this right more than once in any twelve month period;
provided, further, that the Company shall not register shares for its own
account during such sixty (60) day period, but such prohibition shall not apply
to the registration of Company shares in connection with (x) a merger or (y)
registration of shares relating to a stock option, stock purchase or similar
plan; or

                                    (iv) in any particular jurisdiction in which
the Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance.

                           (c) Subject to the foregoing, the Company shall file
a registration statement covering the Registrable Securities and other
securities so requested to be registered as soon as practicable after receipt of
the request or requests of the Holders.

                                       5
<PAGE>   7

                  1.6 Obligations of the Company. Whenever required under this
Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:

                           (a) except as otherwise provided in Section 1.3,
prepare and file with the SEC a registration statement with respect to such
Registrable Securities and use best efforts to cause such registration statement
to become effective, and, on the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such registration statement
effective for a period of up to 180 days or, if earlier, until the distribution
contemplated in the Registration Statement has been completed; provided that (i)
such 180-day period shall be extended for a period of time equal to the period
the Holder refrains from selling any securities included in such registration at
the request of an underwriter of Common Stock (or other securities) of the
Company; and (ii) in the case of any registration of Registrable Securities on
Form S-3 (or any other Form, to the extent permitted by law) that are intended
to be offered on a continuous or delayed basis, such 180-day period shall be
extended, if necessary, to keep the Registration Statement effective until all
such Registrable Securities are sold, except to the extent that the Holders (and
any affiliate of the Holder with whom such Holder must aggregate its sales under
Rule 144) of such Registrable Securities may sell those Registrable Securities
in any three-month period without regard to the volume limitation and without
registration in compliance with Rule 144 under the 1933 Act;

                           (b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the 1933 Act
with respect to the disposition of all securities covered by such registration
statement during the period of time such registration statement remains
effective;

                           (c) furnish to the Holders such numbers of copies of
a prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may reasonably
request to facilitate the disposition of Registrable Securities owned by them;

                           (d) use best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions;

                           (e) in the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter of such offering;

                           (f) during the period of time such registration
statement remains effective, notify each Holder of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act or the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a

                                       6
<PAGE>   8

material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing;

                           (g) cause all such Registrable Securities registered
hereunder to be listed on each securities exchange on which securities of the
same class issued by the Company are then listed;

                           (h) provide a transfer agent and registrar for all
Registrable Securities registered hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration; and

                           (i) furnish, at the request of any Holder requesting
registration of Registrable Securities pursuant to this Section 1, on the date
that such Registrable Securities are delivered to the underwriters for sale in
connection with a registration pursuant to this Section 1, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities, and (ii) a "comfort" letter signed by
the independent public accountants who have certified the Company's financial
statements included in the registration statement, covering substantially the
same matters with respect to the registration statement (and the prospectus
included therein) and with respect to events subsequent to the date of the
financial statements, as are customarily covered in accountants' letters
delivered to the underwriters in underwritten public offerings of securities
addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities.

                  1.7 Information from Holder. It shall be a condition precedent
to the obligations of the Company to take any action pursuant to this Section 1
with respect to the Registrable Securities of any selling Holder that such
Holder shall furnish to the Company such information regarding such Holder, the
Registrable Securities held by such Holder, and the intended method of
disposition of such securities as shall be required to effect the registration
of such Registrable Securities.

                  1.8 Expenses of Registration. All expenses incurred in
connection with registrations, filings or qualifications pursuant to this
Section 1, including (without limitation) all registration, filing and
qualification fees, printing fees and expenses, accounting fees and expenses,
fees and disbursements of counsel for the Company and the reasonable fees and
disbursements of one counsel for the selling Holders selected by the Holders,
shall be borne by the Company. Notwithstanding the foregoing, the Company shall
not be required to pay for any expenses of any registration proceeding begun
pursuant to Sections 1.3 and 1.5 if the registration request is subsequently
withdrawn at the request of the Holders of a majority of the Registrable
Securities to be registered (in which case all participating Holders shall bear
such expenses pro rata based on the number of Registrable Securities that were
requested to be included in the withdrawn registration); provided that, if at
the time of such withdrawal, the Holders shall have learned of a material
adverse change in the condition, business, or prospects of the Company from that
known to the Holders at the time of their request and shall have withdrawn the
request

                                       7
<PAGE>   9

with reasonable promptness following disclosure by the Company of such material
adverse change, then the Holders shall not be required to pay any of such
expenses and shall retain their rights pursuant to Sections 1.3 and 1.5.
Anything herein to the contrary notwithstanding, all underwriting discounts and
commissions incurred in connection with a sale of Registrable Securities shall
be borne and paid by the Holder thereof, and the Company shall have no
responsibility therefor.

                  1.9 Indemnification. If any Registrable Securities are
included in a registration statement under this Section 1:

                           (a) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder, the partners or officers, directors and
stockholders of such Holder, legal counsel and accountants for such Holder, any
underwriter (as defined in the 1933 Act) for such Holder and each person, if
any, who controls such Holder or underwriter within the meaning of the 1933 Act
or the 1934 Act, against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the 1933 Act, the 1934 Act or
any other federal or state securities law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
on any of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any state securities law or any rule or
regulation promulgated under the 1933 Act, the 1934 Act or any state securities
law; and the Company will reimburse such Holder, underwriter or controlling
person for any legal or other expenses incurred, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided that the indemnity agreement in this Section 1.9(a) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld or delayed), nor shall the Company be liable
in any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based on a Violation that occurs in reliance
on and in conformity with written information furnished expressly for use in
connection with such registration by such Holder, underwriter or controlling
person.

                           (b) To the extent permitted by law, each selling
Holder will indemnify and hold harmless the Company, each of its directors, each
of its officers who shall have signed the registration statement, each person,
if any, who controls the Company within the meaning of the 1933 Act, legal
counsel and accountants for the Company, any underwriter, any other Holder
selling securities in such registration statement and any controlling person of
any such underwriter or other Holder, against any losses, claims, damages or
liabilities to which any of the foregoing persons may become subject, under the
1933 Act, the 1934 Act or any other federal or state securities law, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based on any Violation, in each case to the extent (and only
to the extent) that such Violation occurs in reliance on and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and each such

                                       8
<PAGE>   10

Holder will reimburse any person intended to be indemnified pursuant to this
Section 1.9(b), for any legal or other expenses reasonably incurred, as
incurred, by such person in connection with investigating or defending any such
loss, claim, damage, liability or action; provided that the indemnity agreement
in this Section 1.9(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder (which consent shall not be unreasonably withheld or
delayed); and provided further that in no event shall any indemnity by such
Holder under this Section 1.9(b), when aggregated with amounts contributed, if
any, pursuant to Section 1.9(d), exceed the net proceeds from the sale of
Registrable Securities hereunder received by such Holder.

                           (c) Promptly after receipt by an indemnified party
under this Section 1.9 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 1.9,
deliver to the indemnifying party notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
that the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided that an indemnified party (together with
all other indemnified parties that may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the fees and
expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to notify the indemnifying party within a reasonable
time of the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Section 1.9, but the omission so to notify the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 1.9.

                           (d) If the indemnification provided in this Section
1.9 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any loss, liability, claim, damage or expense
referred to herein, then the indemnifying party, in lieu of indemnifying such
indemnified party hereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the statements or omissions that shall have resulted in such
loss, liability, claim, damage or expense, as well as any other relevant
equitable considerations; provided that in no event shall any contribution by a
Holder under this Section 1.9(d), when aggregate with amounts paid, if any,
pursuant to Section 1.9(b), exceed the net proceeds from the sale of Registrable
Securities hereunder received by such Holder. The relative fault of the
indemnifying party and of the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission.

                           (e) Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in the underwriting
agreement entered into in

                                       9
<PAGE>   11

connection with the underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control.

                           (f) The obligations of the Company and Holders under
this Section 1.9 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.

                  1.10 Reports under 1934 Act. With a view to making available
to the Holders the benefits of Rule 144 promulgated under the 1933 Act and any
other rule or regulation of the SEC that may at any time permit a Holder to sell
securities of the Company to the public without registration or pursuant to a
registration statement (including, without limitation, Form S-3), the Company
agrees to:

                           (a) make and keep public information available, as
those terms are used in SEC Rule 144, at all times;

                           (b) take such action, including voluntary
registration of its common stock under Section 12 of the 1934 Act, as is
necessary to enable the Holders to utilize Form S-3 for the sale of their
Registrable Securities;

                           (c) file with the SEC in a timely manner all reports
and other documents required of the Company under the 1933 Act and the 1934 Act;
and

                           (d) furnish to any Holder, so long as the Holder owns
any Registrable Securities, forthwith on request, (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144,
the 1933 Act and the 1934 Act, or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be reasonably
requested in availing any Holder of any rule or regulation of the SEC that
permits the selling of any such securities without registration or pursuant to
such form.

                  1.11 Assignment of Registration Rights. The rights to cause
the Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such Registrable Securities that (i) is a subsidiary, parent,
current or former partner, current or former limited partner, current or former
member, current or former manager or stockholder of a Holder, (ii) is an entity
controlling, controlled by or under common control with a Holder, including
without limitation a corporation or limited liability company that is a direct
or indirect parent or subsidiary of the Holder, (iii) is a transferee or
assignee of at least 25,000 (as adjusted for stock split, combinations,
dividends and the like) shares of such Registrable Securities; provided that:
(a) the Company is, within a reasonable time after such transfer, notified of
the name and address of such transferee or assignee and the Registrable
Securities with respect to which such registration rights are being assigned;
(b) such transferee or assignee agrees in writing to be bound by and subject to
the terms and conditions of this Agreement; (c) such assignment shall be
effective only if immediately following such transfer the further disposition of
such securities by the transferee

                                       10
<PAGE>   12

or assignee is restricted under the 1933 Act; and (d) such assignment is not
made pursuant to a registration statement effected pursuant to this Agreement.

                  1.12 Limitations on Subsequent Registration Rights. From and
after the date of this Agreement, the Company shall not, without the prior
consent of the Holders of at least eighty percent of the Registrable Securities,
enter into any agreement with any holder or prospective holder of any securities
of the Company that would grant such holder or prospective holder any rights to
require the Company to register such securities under terms or conditions that
are pari passu or that are more favorable than those provided for herein and
will not grant any registration rights that diminish or adversely affect the
registration rights of the Holders hereunder (including, without limitation,
reducing the number of Registrable Securities that are to be included in any
registration or proposed registration filed under the terms hereof), unless (i)
the prospective holder or holders purchase in excess of $10,000,000 worth of
securities from the Company and (ii) under the terms of such agreement, such
holder or prospective holder shall have been granted rights to require the
Company to register such securities under terms or conditions that are pari
passu or that are less favorable than those provided for herein and such rights
do not diminish or adversely affect the registration rights of the Holders
hereunder (except that such rights may result in a pari passu reduction in the
number of Registrable Securities that are to be included in any registration or
proposed registration filed under the terms hereof).

                  1.13 Termination of Registration Rights. No Holder shall be
entitled to exercise any right provided in this Section 1 with respect to a
Registrable Security (i) after the date on which that Registrable Security has
been sold under a registration statement filed in accordance with this Agreement
or (ii) if all Registrable Securities held by such Holder (and any affiliate of
the Holder with whom such Holder must aggregate its sales under Rule 144) can be
sold in any three-month period without volume limitation and without
registration in compliance with Rule 144 under the 1933 Act.

         2. Covenants.

                  2.1 Delivery of SEC Reports. The Company shall deliver to each
Holder holding Registrable Securities all reports and other documents of the
Company that the Company is required to file with the SEC under the 1933 Act or
the 1934 Act within twenty-four hours of the time such reports or other
documents are filed with the SEC.

                  2.2 Confidential Information.

                           (a) The Company shall provide to each Holder not less
than ten days' prior written notice of its intention to deliver to such Holder
confidential or non-public information relating to the Company which is marked
as "confidential" or "non-public." If a Holder notifies Company that it does not
desire to receive such confidential or non-public information, then the Company
shall not deliver such confidential or non-public information to such Holder.

                           (b) Each Holder covenants with the Company that,
subject to the Company's compliance with the provision of Section 2.2(a) hereto,
the Holder confirms, acknowledges, and covenants that information which is
marked "confidential" or "non-public",

                                       11
<PAGE>   13

and is received by it with respect to the Company pursuant to this Agreement, or
with respect to the transactions described herein or in the Purchase Agreement,
or in connection with the participation by the Holder or its employee or agent
as a stockholder of the Company, is and shall be confidential and for the
Holder's use only, and the Holder will not use such information in violation of
the securities laws, or any other laws, or reproduce, disclose or disseminate
such information to any other person (other than the Holder's employees,
directors or agents having a need to know the contents of such information and
the Holder's attorneys), except in connection with the exercise of rights under
this Agreement, unless (i) the Company has made such information available to
the public generally, (ii) such information has otherwise been made generally or
publicly available, or (iii) the Holder is required to disclose such information
by a governmental body or pursuant to legal process, in which case the Holder
shall provide at least three days' prior notice of such proposed disclosure or
such lesser notice as the Holder shall have received. Company acknowledges no
information contained in this Agreement and the Purchase Agreement is
confidential or non-public information. Notwithstanding the foregoing, the
Holder may, in its sole discretion, decline to receive from the Company
information which is marked "confidential" or "non-public", and as a result
thereof shall not be deemed to have received or have any knowledge of such
information marked "confidential" or "non-public", provided it has not received
same.

                  2.3 Conflicts of Interest. The Company shall use its best
efforts to ensure that the Company's employees, during the term of their
employment with the Company, do not engage in activities which would result in a
conflict of interest with the Company. The Company's obligations hereunder
include, but are not limited to, requiring that the Company's employees devote
their primary productive time, ability and attention to the business of the
Company, requiring that the Company's employees enter into reasonable and
customary agreements regarding proprietary information and confidentiality and
inventions, and preventing the Company's employees from engaging or
participating in any business that is in competition with the business of the
Company.

                  2.4 Proprietary Agreements. The Company shall have each
officer, employee and consultant of the Company execute the Company's standard
form of non-disclosure and proprietary information agreements, prior to
disclosing any proprietary information to any such officer, employee and
consultant. The Company will use its best efforts to prevent any employee from
violating the confidentiality and proprietary information agreement entered into
between the Company and each of its officers, employees and consultants.

                  2.5 Extraordinary Remuneration. The Board of Directors may not
approve any plan or action to grant extraordinary remuneration to management in
connection with the sale of the Company or any subsidiary of the Company, or the
termination of employment or otherwise, unless such plan or action has been
approved by a majority of the non-employee members of the Board of Directors.

                  2.6 Reserve for Exercise Shares. The Company shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock such number of shares of Common Stock (the "Exercise Shares") as
shall be sufficient to enable it to comply with its exercise obligations under
the Warrants and Registration Warrants. If at any time the number of Exercise
Shares shall not be sufficient to effect the exercise of the Warrants and
Registration

                                       12
<PAGE>   14

Warrants, the Company will forthwith take such corporate action as may be
necessary to increase its authorized but unissued shares of Common Stock to such
number as will be sufficient for such purposes. The Company will obtain
authorization, consent, approval or other action by, or make any filing with,
any administrative body that may be required under applicable state securities
laws in connection with the issuance of Exercise Shares.

                  2.7 Termination of Covenants. The covenants set forth in
Sections 2.1 through 2.7 shall terminate as to each Investor and be of no
further force and effect at the time the Investors no longer hold any
Registrable Securities.

         3. Miscellaneous.

                  3.1 Successors and Assigns. Except as otherwise provided
herein, this Agreement shall inure to the benefit of and bind the respective
successors and assigns of the parties (including transferees of any shares of
Registrable Securities). Nothing in this Agreement, express or implied, is
intended to confer on any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

                  3.2 Governing Law. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of
Washington, without giving effect to its conflicts of law principles. All
disputes between the parties hereto, whether sounding in contract, tort, equity
or otherwise, shall be resolved only by state and federal courts located in
Spokane, Washington, and the courts to which an appeal therefrom may be taken.
All parties hereto waive any objections to the location of the above referenced
courts, including but not limited to any objection based on lack of
jurisdiction, improper venue or forum non conveniens.

                  3.3 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                  3.4 Headings. The headings of sections and subsections in this
Agreement are used for convenience of reference only and are not to be
considered in construing or interpreting this Agreement.

                  3.5 Notices. Any request, consent, notice or other
communication required or permitted under this Agreement shall be in writing and
shall be deemed duly given and received when delivered personally or transmitted
by facsimile, one business day after being deposited for next-day delivery with
a nationally recognized overnight delivery service, or three days after being
deposited as first class mail with the United States Postal Service, all charges
or postage prepaid, and properly addressed to the party to receive the same at
the address indicated for such party on the applicable signature page hereof, or
at such other address as such party may designate by ten days' advance notice to
the other parties.

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

                                       13
<PAGE>   15

                  3.7 Entire Agreement: Amendments and Waivers. This Agreement
(including the Schedule hereto) constitutes the full and entire understanding
and agreement among the parties with regard to the subjects hereof and thereof.
Any term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the consent of the Company and the
holders of more than fifty percent of the Registrable Securities; provided that
no amendment shall be effective unless approved by the holder or holders of
Registrable Securities that shall be affected adversely, or affected differently
from the Holders generally, by such amendment. Any amendment or waiver effected
in accordance with this paragraph shall be binding on the Company, each holder
of any Registrable Securities and each future holder of all such Registrable
Securities.

                  3.8 Severability. If any provision of this Agreement is held
by a court of competent jurisdiction to be unenforceable under applicable law,
such provision shall be excluded from this Agreement and the balance of the
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.

                  3.9 Aggregation of Stock. All shares of Registrable Securities
held or acquired by affiliated entities or persons shall be aggregated together
for the purpose of determining the availability of any rights under this
Agreement.

                    [Signatures appear on the following page]

                                       14
<PAGE>   16

         IN WITNESS WHEREOF, this Investors' Rights Agreement has been duly
executed by or on behalf of the parties hereto as of the date first above
written.

                                    ELITE LOGISTICS, INC.

                                    By:
                                        ---------------------------------------
                                    Name: Joseph D. Smith
                                    President/CEO

                                    1201 N Ave. H
                                    Freeport, TX 77541
                                    (979) 230-0222
                                    (979) 230-0122 Fax

                                    with a copy to:

                                    Adrienne Randle Bond, Esq.
                                    Bond & Taylor LLP
                                    1021 Main St., Suite 1940
                                    Houston, TX 77002
                                    (713) 759-9970
                                    (713) 759-1980 Fax

                                    STOCKHOLDERS:

                                    KOYAH LEVERAGE PARTNERS, L.P.

                                    By: Koyah Ventures LLC, its general partner

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

                                    Address: c/o ICM Asset Management, Inc.
                                             601 West Main Avenue, Suite 600
                                             Spokane, WA 99201
                                             Attn: Robert Law, Esq.
                                             Tel: (509) 455-3588
                                             Fax: (509) 623-0588

                                    S-1
<PAGE>   17

                                    with a copy to:

                                    Shartsis, Friese & Ginsburg LLP
                                    One Maritime Plaza, 18th Floor
                                    San Francisco, CA 94111
                                    Attn: John F. Milani, Esq.
                                    Tel: (415) 421-6500
                                    Fax: (415) 421-2922

                                    KOYAH PARTNERS, L.P.

                                    By: Koyah Ventures LLC, its general partner

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

                                    Address: c/o ICM Asset Management, Inc.
                                             601 West Main Avenue, Suite 600
                                             Spokane, WA 99201
                                             Attn: Robert Law, Esq.
                                             Tel: (509) 455-3588
                                             Fax: (509) 623-0588

                                    with a copy to:

                                    Shartsis, Friese & Ginsburg LLP
                                    One Maritime Plaza, 18th Floor
                                    San Francisco, CA 94111
                                    Attn: John F. Milani, Esq.
                                    Tel: (415) 421-6500
                                    Fax: (415) 421-2922

                                    -------------------------------------------
                                    Scott Atkison

                                    Address:
                                             ----------------------------------

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

                                             ----------------------------------
                                    Tel:
                                             ----------------------------------
                                    Fax:
                                             ----------------------------------

                                    S-2
<PAGE>   18

                                    -------------------------------------------
                                    Nigel Davey

                                    Address:
                                             ----------------------------------

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

                                             ----------------------------------
                                    Tel:
                                             ----------------------------------
                                    Fax:
                                             ----------------------------------

                                    S-3
<PAGE>   19

                                   SCHEDULE A

                              Schedule of Investors

Name

Koyah Leverage Partners, L.P.

Koyah Partners, L.P.

Scott Atkison

Nigel Davey

<PAGE>   20

                                   SCHEDULE B

                             Investors' Common Stock

<TABLE>
<CAPTION>
Investor Name                                                 Number of Shares of Common Stock
-------------                                                 --------------------------------

<S>                                                           <C>
Koyah Leverage Partners, L.P.                                            100,000

Koyah Partners, L.P.                                                      25,000
</TABLE>

<PAGE>   21

                                    EXHIBIT A

                          Form of Registration Warrant

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