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                                                                   Exhibit 10.40

                         SERIES A CONVERTIBLE PREFERRED
                            STOCK PURCHASE AGREEMENT

                  THIS SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
(this "Agreement") is made and entered into as of March 14, 2000, by and between
ALARMX.COM. INC., a Delaware corporation (the "Company") and NET VALUE HOLDINGS,
INC., a Delaware corporation (the "Investor").

                                    RECITALS

         The Company desires to sell to the Investor, and the Investor desires
to purchase from the Company, shares of the Company's Series A Convertible
Preferred Stock on the terms and conditions set forth in this Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

         1.       AGREEMENT TO PURCHASE AND SELL STOCK.

                  1.1 Authorization. As of the Closing (as defined below), the
Company will have authorized the issuance, pursuant to the terms and conditions
of this Agreement, of up to Four Million (4,000,000) shares of the Company's
Series A Convertible Preferred Stock, $.25 par value per share (the "Series A
Stock") having the rights, preferences, privileges and restrictions set forth in
the Certificate of Designation designating the Series A Stock of the Company
attached to this Agreement as Exhibit A (the "Series A Certificate").

                  1.2 Agreement to Purchase and Sell. The Company agrees to sell
to the Investor at the Closing, and the Investor agrees to purchase from the
Company at the Closing, 4,000,000 shares of Series A Stock which shall equal 40%
of the Company's Common Stock on a post-investment fully diluted basis at a
price of $0.40 per share, or an aggregate price of $1,000,000 as part of the
first round of the Company's financing, which round shall end on or before March
6, 2000 (the "First Round Offering"). The shares of Series A Stock purchased and
sold pursuant to this Agreement will be collectively referred to as the
"Purchased Shares" and the shares of Common Stock issuable upon conversion of
the Purchased Shares will be collectively referred to as the "Conversion
Shares".

         2. CLOSING. The purchase and sale of the Purchased Shares will take
place at the offices of Klehr, Harrison, Harvey, Branzburg & Ellers, LLP,
counsel to the Investor, at 260 S. Broad Street, Philadelphia, Pennsylvania
19102 at 9:00 a.m. Eastern Time, on March 14, 2000, or at such other time and
place as the Company and the Investor mutually agree upon (which time and

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place are referred to in this Agreement as the "Closing"). At the Closing, the
Company will deliver to the Investor certificates representing the Purchased
Shares against delivery to the Company by the Investor of the full purchase
price of the Purchased Shares, paid by (i) a wire transfer of funds to the
Company or (ii) certified bank check.

         3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investor that the statements in the following
paragraphs of this Section 3 are all true and correct:

                  3.1 Organization, Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own its properties and assets and to carry on its business as now
conducted and as presently proposed to be conducted. The Company is duly
qualified and in good standing to do business as a foreign corporation in each
jurisdiction where failure to be so qualified would have a material adverse
effect on its financial condition, business, prospects or operations.

                  3.2 Capitalization. Upon filing the Series A Certificate,
immediately prior to the Closing, the capitalization of the Company will consist
of the following:

                           (a) Preferred Stock. A total of Four Million
(4,000,000) authorized shares of preferred stock, $.001 par value per share, of
which Four Million (4,000,000) shares are designated as Series A Stock, none of
which will be issued and outstanding. The rights, preferences and privileges of
the Series A Stock will be as stated in the Series A Certificate and as provided
by law.

                           (b) Common Stock. A total of Six Million (6,000,000)
authorized shares of common stock, $.001 par value per share (the "Common
Stock"), of which One Million Eight Hundred Thousand (1,800,000) shares are
issued and outstanding.

                           (c) Options, Warrants, Reserved Shares. Except as set
forth on Schedule 3.2(c), there are not outstanding any options, warrants,
rights (including conversion or preemptive rights) or agreements for the
purchase or acquisition from the Company of any shares of its capital stock or
any securities convertible into or ultimately exchangeable or exercisable for
any shares of the Company's capital stock. Except as set forth on Schedule
3.2(c), no shares of the Company's outstanding capital stock, or stock issuable
upon exercise or exchange of any outstanding options, warrants or rights, or
other stock issuable by the Company, are subject to any rights of first refusal
or other rights to purchase such stock (whether in favor of the Company or any
other person), pursuant to any agreement or commitment of the Company.

                           (d) Outstanding Security Holders. Attached to this
Agreement as Schedule 3.2(d) is a complete list of all outstanding stockholders,
option holders, warrant holders, convertible note holders and other security
holders of the Company as of immediately prior to the

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Closing, which schedule lists the type of instruments, certificate numbers in
sequential order (if applicable), the dates of issuance, the names of holders
and the number of Shares held or to be held upon exercise of such instrument.

                  3.3 Subsidiaries. Except as set forth on Schedule 3.3, the
Company does not presently own or control, directly or indirectly, any interest
in any other corporation, partnership, trust, joint venture, association, or
other entity.

                  3.4 Due Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution, delivery of, and the performance of all obligations of
the Company under, this Agreement, the Investor Rights Agreement (as defined in
Section 5.14) and the Co-Sale Agreement (as defined in Section 5.15), and the
Employment Agreements (as defined in Section 5.9), (collectively, the "Related
Agreements") and the authorization, issuance, reservation for issuance and
delivery of all of the Purchased Shares being sold under this Agreement and of
the Conversion Shares has been taken or will be taken prior to the Closing, and
this Agreement constitutes, and the Related Agreements, when executed, will
constitute, valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, except as may be limited by (i)
applicable bankruptcy, insolvency, reorganization or others laws of general
application relating to or affecting the enforcement of creditors' rights
generally and (ii) the effect of rules of law governing the availability of
equitable remedies.

                  3.5 Valid Issuance of Stock.

                           (a) The Purchased Shares, when issued, sold and
delivered in accordance with the terms of this Agreement for the consideration
provided for herein, will be duly and validly issued, fully paid and
nonassessable. The Conversion Shares have been duly and validly reserved for
issuance and, upon issuance in accordance with the terms of the Series A
Certificate, will be duly and validly issued, fully paid and nonassessable.

                           (b) Based in part on the representations made by the
Investor in Section 4 hereof, the Purchased Shares and (assuming no change in
applicable law and no unlawful distribution of Purchased Shares by the Investor
or other parties) the Conversion Shares will be issued in full compliance with
the registration and prospectus delivery requirements of the U.S. Securities Act
of 1933, as amended (the "1933 Act") and the registration and qualification
requirements of all applicable state securities laws; provided that, with
respect to the Conversion Shares, no commission or other remuneration is paid or
given, directly or indirectly, for soliciting the issuance of Conversion Shares
upon the conversion of the Purchased Shares and no additional consideration is
paid for the Conversion Shares other than surrender of the applicable Purchased
Shares upon conversion thereof in accordance with the Series A Certificate.

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                           (c) The outstanding shares of the capital stock of
the Company are duly and validly issued, fully paid and nonassessable, and such
shares of capital stock, and all outstanding options, warrants, convertible
notes and other securities of the Company, have been issued in full compliance
with the registration and prospectus delivery requirements of the 1933 Act or in
compliance with applicable exemptions therefrom, the registration and
qualification requirements of all applicable securities laws of states of the
United States and all other provisions of applicable securities laws of States
of the United States, including, without limitation, anti-fraud provisions.

                  3.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement and the Related Agreements, except for such
qualifications or filings under the 1933 Act and the regulations thereunder and
all other applicable securities laws of states of the United States as may be
required in connection with the transactions contemplated by this Agreement. All
such qualifications and filings will, in the case of qualifications, be
effective on the Closing and will, in the case of filings, be made within the
time prescribed by law.

                  3.7 Litigation. Except as set forth on Schedule 3.7, there is
no action, suit, proceeding, claim, arbitration or investigation ("Action")
pending or, to the best of the Company's Knowledge (as defined below), currently
threatened against the Company, its activities, properties or assets or, to the
best of the Company's Knowledge, against any officer, director or employee of
the Company in connection with such officer's, director's or employee's
relationship with, or actions taken on behalf of, the Company. Except as set
forth on Schedule 3.7, to the best of the Company's Knowledge, there is no
factual or legal basis for any such Action that might result, individually or in
the aggregate, in any material adverse change in the business, properties,
assets, financial condition, affairs or prospects of the Company. By way of
example but not by way of limitation, there are no Actions pending or, to the
best of the Company's Knowledge, threatened (or any basis therefor known to the
Company) relating to the prior employment of any of the Company's employees or
consultants, their use in connection with the Company's business of any
information, technology or techniques allegedly proprietary to any of their
former employers, clients or other parties, or their obligations under any
agreements with prior employers, clients or other parties. The Company is not a
party to or subject to the provisions of any order, writ, injunction, judgment
or decree of any court or government agency or instrumentality and there is no
Action by the Company currently pending or which the Company intends to
initiate. For the purposes of this Agreement, "Knowledge" means (i) the actual
knowledge of such party's partners, officers, directors, principals, affiliates
or agents; and (ii) the knowledge that a prudent business person would have
obtained in the conduct of his or her business after making reasonable inquiry
and exercising reasonable diligence with respect to the particular matter in
question.

                  3.8 Ownership and Nondisclosure Agreement. Each employee,
officer, consultant and contractor of the Company identified on Schedule 3.8 has
entered into and executed an Ownership and Nondisclosure Agreement in the form
attached to this Agreement as Exhibit B or an employment or consulting agreement
containing substantially similar terms.

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                  3.9 Status of Proprietary Assets.

                           (a) Ownership. Except as set forth on Schedule
3.9(a), the Company has full title and ownership of, or has license to, all
patents, patent applications, trademarks, service marks, trade names,
copyrights, moral rights, mask works, trade secrets, confidential and
proprietary information, compositions of matter, formulas, designs, proprietary
rights, know-how and processes (all of the foregoing collectively referred to as
the "Proprietary Assets") necessary to enable it to carry on its business as now
conducted and as presently proposed to be conducted, without any conflict with
or infringement of the rights of others. A complete list of all the Company's
Proprietary Assets is set forth on Schedule 3.9(a) to this Agreement. To the
best of the Company's Knowledge, no third party has any ownership right, title,
interest, claim in or lien on any of the Company's Proprietary Assets and the
Company has taken, and in the future the Company will use its best efforts to
take, all steps reasonably necessary to preserve its legal rights in, and the
secrecy of, all its Proprietary Assets, except those for which disclosure is
required for legitimate business or legal reasons.

                           (b) Licenses; Other Agreements. Except as set forth
on Schedule 3.9(b), the Company has not granted, and, there are not outstanding,
any options, licenses or agreements of any kind relating to any Proprietary
Asset of the Company, nor is the Company bound by or a party to any option,
license or agreement of any kind with respect to any of its Proprietary Assets.
The Company is not obligated to pay any royalties or other payments to third
parties with respect to the marketing, sale, distribution, manufacture, license
or use of any Proprietary Asset or any other property or rights.

                           (c) No Infringement. To the best of the Company's
Knowledge, the Company has not violated or infringed, and is not currently
violating or infringing, and the Company has not received any communications
alleging that the Company (or any of its employees or consultants) has violated
or infringed or, by conducting its business as proposed, would violate or
infringe, any Proprietary Asset of any other person or entity.

                           (d) No Breach by Employee. The Company is not aware
that any employee or consultant of the Company is obligated under any agreement
(including licenses, covenants or commitments of any nature) or subject to any
judgment, decree or order of any court or administrative agency, or any other
restriction that would interfere with the use of his or her best efforts to
carry out his or her duties for the Company or to promote the interests of the
Company or that would conflict with the Company's business as proposed to be
conducted. The carrying on of the Company's business by the employees and
contractors of the Company and the conduct of the Company business as presently
proposed, will not, to the best of the Company's Knowledge, 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 of such
employees or contractors or the Company is now obligated. The Company does not
believe it is or will be necessary to utilize any inventions of any employees of
the Company (or persons the Company currently intends to hire) made prior to
their employment by the Company which have not otherwise become property of the
Company. At no time during the conception of or reduction of any of the

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Proprietary Assets to practice was any developer, inventor or other contributor
to such patents operating under any grants from any governmental entity or
agency or private source, performing research sponsored by any governmental
entity or agency or private source or subject to any employment agreement or
invention assignment or nondisclosure agreement or other obligation with any
third party that could adversely affect the Company's rights in such Proprietary
Assets.

                  3.10 Compliance with Law and Charter Documents. The Company is
not in violation or default of any provisions of its Certificate of
Incorporation or Bylaws, both as amended, and to the best of the Company's
Knowledge, the Company is in compliance with all applicable statutes, laws,
regulations and executive orders of the United States of America and all states,
foreign countries or other governmental bodies and agencies having jurisdiction
over the Company's business or properties. The Company has not received any
notice of any violation of such statutes, laws, regulations or orders which has
not been remedied prior to the date hereof. The execution, delivery and
performance of this Agreement and the Related Agreements and the consummation of
the transactions contemplated hereby or thereby will not result in any such
violation or default, or be in conflict with or constitute, with or without the
passage of time or the giving of notice or both, either a default under the
Company's Certificate of Incorporation or Bylaws, or any agreement or contract
of the Company, or, to the best of the Company's Knowledge, a violation of any
statutes, laws, regulations or orders, or an event which results in the creation
of any lien, charge or encumbrance upon any asset of the Company.

                  3.11 Material Agreements.

                           (a) List of Material Agreements. Attached to this
Agreement as Schedule 3.11 is a complete list of all agreements, contracts,
leases, licenses, instruments and commitments (oral or written) to which the
Company is a party or is bound that, individually or in the aggregate, are
material to the business, properties, financial condition, results of operation,
affairs or prospects of the Company ("Material Agreements"); provided that for
purposes of this Section 3.11 only, no agreement under which the only remaining
obligation of the Company is to make a payment of money in the amount of $5,000
or less will be deemed to be material to its business, properties, financial
condition or results of operations if the failure to make such payment will not
result in the loss by the Company of any rights that are material to the conduct
of its business.

                           (b) No Breach. The Company has not breached, nor does
the Company have any Knowledge of any claim or threat that the Company has
breached, any term or condition of (i) any Material Agreement set forth in
Schedule 3.11 or (ii) any other agreement, contract, lease, license, instrument
or commitment that, individually or in the aggregate, would have a material
adverse effect on the business, properties, financial condition, results of
operations or affairs or prospects of the Company. Each Material Agreement set
forth in Schedule 3.11 is in full force and effect and, to the Company's
Knowledge, no other party to such Material Agreement is in default

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thereunder. The Company is not a party to any agreement that restricts its
ability to market or sell any of its products (whether by territorial
restriction or otherwise).

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

                  3.13 Charter Documents; Minutes. The Certificate of
Incorporation and the Bylaws of the Company are in the form previously provided
to the Investor. The minute books of the Company provided to the Investor
contain a complete summary of all meetings, consents and actions of the board of
directors and the stockholders of the Company since the time of its
incorporation, accurately reflecting all transactions referred to in such
minutes in all material respects.

                  3.14 Title to Property and Assets. The Company owns its
properties and assets free and clear of all mortgages, deeds of trust, liens,
encumbrances, security interests and claims except for statutory liens for the
payment of current taxes that are not yet delinquent and liens, encumbrances and
security interests which arise in the ordinary course of business and which do
not affect material properties and assets of the Company. With respect to the
property and assets it leases, the Company is in compliance with such leases
and, to the best of the Company's Knowledge, the Company holds valid leasehold
interests in such assets free of any liens, encumbrances, security interests or
claims of any party other than the lessors of such property and assets.

                  3.15 Omitted.

                  3.16 Certain Actions. Except as set forth on Schedule 3.16,
the Company has not: (a) declared or paid any dividends, or authorized or made
any distribution upon or with respect to any class or series of its capital
stock; (b) incurred any indebtedness for money borrowed or incurred any other
liabilities individually in excess of $5,000 or in excess of $10,000 in the
aggregate; (c) made any loans or advances to any person, other than ordinary
advances for travel expenses; (d) sold, exchanged or otherwise disposed of any
material assets or rights other than the sale of inventory in the ordinary
course of its business; or (d) entered into any transactions with any of its
officers, directors or employees or any entity controlled by any of such
individuals.

                  3.17 Certain Activities. Except as set forth on Schedule 3.17,
the Company has not:

                           (a) formed or acquired or disposed of any interest in
any corporation, partnership, joint venture, or other entity;

                           (b) written up, written down, or written off the book
value of any amount of assets;

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                           (c) declared, paid, or set aside for payment any
dividend or distribution with respect to its capital stock;

                           (d) redeemed, purchased, or otherwise acquired, or
sold, granted, or otherwise disposed of, directly or indirectly, any of its
capital stock or securities or any rights to acquire such capital stock or
securities, or agreed to changes in the terms and conditions of any such rights;

                           (e) increased the compensation of or paid or accrued
any bonus to any employee or contributed or accrued or contributed to any
employee benefit plan, other than in accordance with policies, practices, or
requirements established and in effect on the Balance Sheet Date;

                           (f) entered into any employment, compensation,
consulting or collective bargaining agreement with any person or group;

                           (g) entered into, adopted, or materially amended any
employee benefit plan; or

                           (h) entered into any other material commitment or
transaction not disclosed elsewhere herein.

                  In addition to the foregoing, there has not been:

                           (i) any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the assets, properties,
financial condition, operating results, prospects or business of the Company (as
presently conducted and as presently proposed to be conducted);

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

                           (k) any satisfaction or discharge of any lien, claim
or encumbrance or payment of any obligation by the Company, except such a
satisfaction, discharge or payment made in the ordinary course of business that
is not material to the assets, properties, financial condition, operating
results or business of the Company;

                           (l) any material change or amendment to a material
agreement or arrangement by which the Company or any of its assets or properties
is bound or subject, except for changes or amendments which are expressly
provided for or disclosed in this Agreement; or

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                           (m) to the Company's Knowledge, any other event or
condition of any character which would materially and adversely affect the
assets, properties, financial condition, operating results or business of the
Company.

                  3.18 ERISA Plans. Schedule 3.18 identifies all employee
benefit plans or arrangements applicable to the employees of the Company, and
all material fixed or contingent liabilities or obligations of the Company with
respect to any person now or formerly employed by the Company, including pension
or thrift plans, individual or supplemental pension or accrued compensation
arrangements, contributions to hospitalization or other health or life insurance
programs, incentive plans, bonus arrangements, and vacation, sick leave,
disability, and termination arrangements or policies, including workers'
compensation policies. The Company shall furnish or make available to the
Investor true and complete copies of all written documents or information with
respect to employee matters and arrangements, including without limitation all
employee handbooks, rules, policies, plan documents, trust agreements,
employment agreements, summary plan descriptions, and descriptions of any
unwritten plans identified in Schedule 3.18. Any employee benefits and welfare
plans or arrangements identified in Schedule 3.18 were established and have been
executed, managed, and administered without material exception in accordance
with all applicable requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), and the Employee Retirement Income Security Act of 1974,
as amended, and other applicable laws. There is no governmental audit or
examination of any of such plans or arrangements pending, nor, to the Knowledge
of the Company, threatened. There exists no action, suit, or claim (other than
routine claims for benefits) with respect to any of such plans or arrangements
pending, or, to the Knowledge of the Company, threatened, against any of such
plans or arrangements, and the Company knows of no facts which could give rise
to any such action, suit, or claim.

                  3.19 Insurance. The Company intends to obtain and maintain in
full force and effect fire and casualty insurance policies as is customary for
the type of business engaged in by the Company, with extended coverage,
sufficient in amount (subject to reasonable deductibles) to allow it to replace
any of its properties that might be damaged or destroyed. True and complete
copies of all such insurance policies have previously been furnished to the
Investor and notice of any termination or threatened termination of such
policies has been made known to the Investor.

                  3.20 Tax Returns and Payments. Neither the Company, nor any
entity to whose liabilities the Company has succeeded or assumed, has filed or
been included in a consolidated, unitary, or combined tax return with another
person. Except as set forth on Schedule 3.20, the Company represents and
warrants that: (a) the Company has filed all tax returns and reports required to
have been filed by or for it; including but not limited to those with respect to
income, payroll, property, employee withholding, social security, unemployment,
franchise, excise, use, and sales taxes, and has either paid in full all taxes
that have become due as reflected on any such return or report (including any
interest and penalties with respect thereto shown to be due) or has fully
accrued on its books or has established adequate reserves for all taxes payable
but not yet due; (b) all material information set forth in such returns or
reports is accurate and complete; (c) the Company has paid or made adequate
provision for all taxes, additions to tax, penalties, and interest payable by
the Company; (d) to the best of the Company's Knowledge, no unpaid tax

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deficiency has been asserted against or with respect to the Company by any
taxing authority, and the Company has not received written notice of any such
assertion; (e) the Company has collected or withheld all amounts required to be
collected or withheld by it for any taxes, and to the extent required by law,
all such amounts have been paid to the appropriate governmental agencies or set
aside in appropriate accounts for future payment when due; (f) the Company is in
compliance with, and its records contain all information and documents necessary
to comply with, all applicable information reporting and tax withholding
requirements; (g) the balance sheets contained in the Company Financial
Statements fully and properly reflect, as of the dates thereof, the liabilities
of the Company for all accrued taxes, additions to tax, penalties, and interest;
(h) for periods ending after the date of the most recent Financial Statements,
the books and records of the Company fully and properly reflect its liability
for all accrued taxes, additions to tax, penalties, and interest; (i) the
Company has not granted, nor is it subject to, any waiver of the period of
limitations for the assessment of tax for any currently open taxable period; (j)
the Company has not made or entered into, and holds no asset subject to, a
consent filed pursuant to Section 341(f) of the Code and the regulations
thereunder or a "safe harbor lease" subject to former Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended before the Tax Reform Act of 1986, and
the regulations thereunder; (k) the Company is not required to include in income
any amount for an adjustment pursuant to Section 481 of the Code or the
regulations thereunder; and (l) the Company is not a party to, or obligated
under, any agreement or other arrangement providing for the payment of any
amount that would be an "excess parachute payment" under Section 280G of the
Code.

                  3.21 Employee Matters.

                           (a) The Company is not bound by or subject to any
contract, commitment or arrangement with any labor union, and to the Company's
Knowledge, no labor union has requested, sought or attempted to represent any
employees, representatives or agents of the Company. There is no strike or other
labor dispute involving the Company pending nor, to the Company's Knowledge,
threatened, nor is the Company aware of any labor organization activity
involving its employees.

                           (b) The Company is not aware that any officer or
employee intends to terminate his or her employment with the Company, nor does
the Company have any present intention to terminate the employment of any of its
officers or employees. Schedule 3.21(b) identifies all employees and consultants
of the Company and the title, term (if other than at will) and compensation of
each.

                           (c) After due inquiry, to the Company's Knowledge,
the Company (i) is in full compliance with all applicable laws respecting
employment and employment practices, terms and conditions of employment, and
wages and hours; (ii) is in full compliance with all of its obligations under
applicable workers compensation laws, rules, and regulations; and (iii) is not
engaged in any unfair labor practice.

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                           (d) To the Company's Knowledge, no current employee,
director or officer has been indicted or convicted of a felony or misdemeanor
(other than traffic violations).

                  3.22 Environmental Matters.

                           (a) During the period that the Company has leased or
owned its properties or owned or operated any facilities, there have been no
disposals, releases or threatened releases of Hazardous Materials (as defined
below) on, from or under such properties or facilities. The Company has no
Knowledge of any presence, disposals, releases or threatened releases of
Hazardous Materials on, from or under any of such properties or facilities,
which may have occurred prior to the Company having taken possession of any of
such properties or facilities. For purposes of this Agreement, the terms
"disposal", "release", and "threatened release" shall have the definitions
assigned thereto by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. ss. 9601 et seq., as amended ("CERCLA"). For
the purposes of this Section, "Hazardous Materials" shall mean any hazardous or
toxic substance, material or waste which is or becomes prior to the Closing
regulated under, or defined as a "hazardous substance", "pollutant",
"contaminant", "toxic chemical", "hazardous material", "toxic substance", or
"hazardous chemical" under (i) CERCLA; (ii) the Emergency Planning and Community
Right-to-Know Act, 42 U.S.C. Section 11001 et seq.; (iii) the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; (iv) the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq.; (v) the Occupational
Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq.; (vi) regulations
promulgated under any of the above statutes; or (vii) any applicable state or
local statute, ordinance, rule, or regulation that has a scope or purpose
similar to those statutes identified above.

                           (b) None of the Company's properties or facilities is
in material violation of any federal, state, or local law, ordinance,
regulation, or order relating to industrial hygiene or to the environmental
conditions on, under or about such properties or facilities, including, but not
limited to, soil and ground water condition. During the time that the Company
has owned or leased its properties and facilities, neither the Company nor, to
the Company's Knowledge, any third party, has used, generated, manufactured or
stored on, under or about such properties or facilities or transported to or
from such properties or facilities any Hazardous Materials.

                           (c) During the time that the Company has owned or
leased its properties and facilities, there has been no litigation brought or
threatened against the Company, or any settlement reached by the Company with,
any party or parties alleging the presence, disposal, release or threatened
release of any Hazardous Materials on, from or under any of such properties or
facilities.

                           (d) During the period that the Company has owned or
leased its properties and facilities, no Hazardous Materials have been
transported from such properties or facilities to any site or facility now
listed or proposed for listing on the National Priorities List, at 40 C.F.R.
Part 300, or any list with a similar scope or purpose published by any state
authority.

                                       11

<PAGE>

                  3.23 Interested Party Transactions. To the Company's
Knowledge,

                           (a) no officer, employee or director of the Company
or any "affiliate" or "associate" (as those terms are defined in Rule 405 of the
1933 Act) has had, either directly or indirectly, a material interest in: (i)
any person or entity which purchases from or sells, licenses or furnishes to the
Company any goods, property, technology, intellectual or other property rights
or services; or (ii) any contract or agreement to which the Company is a party
or by which it may be bound or affected.

                           (b) the Company has no indebtedness to or with an
officer, employee, director, affiliate or associate.

                  3.24 Use of Proceeds. The Company shall use the proceeds from
the sale of the Purchased Shares for the purposes identified on Schedule 3.24.

                  3.25 Disclosure. This Agreement and the Schedules and Exhibits
hereto (when read together) do not contain any untrue statement of a material
fact and do not omit to state a material fact necessary to make the statements
therein or herein not misleading. To the Company's Knowledge, the financial
projections contained in the Business Plan, attached hereto as Schedule 3.25 (as
supplemented through the date hereof, the "Business Plan"), fairly present its
management's good faith estimates as of the date of the Business Plan and as of
the date of this Agreement.

                  3.26 Real Property Holding Corporation Status. Since its
inception, the Company has not been a "United States real property holding
corporation", as defined in Section 897(c)(2) of the Code, and in Section
1.897-2(b) of the Treasury Regulations issued thereunder (the "Regulations"),
and the Company has filed with the Internal Revenue Service all statements, if
any, with its United States income tax returns which are required under Section
1.897- 2(h) of the Regulations.

                  3.27 Tax Elections. The Company has not elected pursuant to
the Code, to be treated as an "S" corporation or a collapsible corporation
pursuant to Section 341(f) or Section 1362(a) of the Code, nor has it made any
other elections pursuant to the Code (other than elections which relate solely
to matters of accounting, depreciation or amortization) which would have a
material affect on the Company, its financial condition, its business as
presently conducted or presently properties or material assets.

                  3.28 No Material Undisclosed Liabilities.

                           (a) There is no liability or obligation of the
Company of any nature, whether absolute, accrued, contingent, or otherwise, in
the amount of $5,000 or more individually, or $10,000 or more in the aggregate,
other than:

                                       12

<PAGE>

                                    (i) the liabilities and obligations that are
fully reflected, accrued or reserved against on the balance sheets of the
Financial Statements, for which the reserves are appropriate and reasonable, or
incurred in the ordinary course of business and consistent with past practices;

                                    (ii) the contractual obligations disclosed
on Schedules 3.11; and

                                    (iii) the litigation and claims described on
Schedule 3.7.

                           (b) The Company is not signatory to, and is not in
any manner a guarantor, endorser, assumptor or otherwise primarily or
secondarily liable for or responsible for the payment of, any notes payable or
other obligations other than those set forth in the Financial Statements.

                  3.29 Accounts Receivable. The accounts receivable of the
Company reflected on the Financial Statements or otherwise arising in the
ordinary course of business after the date hereof reflect valid sales of
products and services made on or before such date.

                  3.30 Non-Disclosure and Non-Compete Agreements. Each employee,
officer, consultant and contractor of the Company identified on Schedule 3.30
has entered into and executed a Non-Disclosure and Non-Compete Agreement in the
form attached to this Agreement as Exhibit B or an employment or consulting
agreement containing substantially similar terms.

                  3.31 Employment Agreements. Each founder of the Company
identified on Schedule 3.31 has entered into and executed an Employment
Agreement in the form attached to this Agreement as Exhibit D or an employment
or consulting agreement containing substantially similar terms.

                  4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF
INVESTOR. The Investor hereby represents and warrants to, and agree with, the
Company that:

                  4.1 Authorization. This Agreement constitutes the Investor's
valid and legally binding obligation, enforceable in accordance with its terms
except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting the
enforcement of creditors' rights generally and (ii) the effect of rules of law
governing the availability of equitable remedies. The Investor represents that
it has full power and authority to enter into this Agreement and the Related
Agreements.

                  4.2 Purchase for Own Account. The Purchased Shares to be
purchased by the Investor hereunder will be acquired for investment for the
Investor's own account, not as a nominee or agent, and not with a view to the
public resale or distribution thereof within the meaning of the Act, and the
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same. The Investor also represents that it has not
been formed for the specific purpose of acquiring the Purchased Shares.

                                       13

<PAGE>

                  4.3 Disclosure of Information. The Investor has received or
has had full access to all the information it considers necessary or appropriate
to make an informed investment decision with respect to the Purchased Shares to
be purchased by the Investor under this Agreement. The Investor further has had
an opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of the Purchased Shares and to obtain
additional information (to the extent the Company possessed such information or
could acquire it without unreasonable effort or expense) necessary to verify any
information furnished to the Investor or to which the Investor had access. The
foregoing, however, does not in any way limit or modify the representations and
warranties made by the Company in Section 3.

                  4.4 Accredited Investor Status. The Investor is an "accredited
investor" within the meaning of Regulation D promulgated under the Act.

                  4.5 Investment Experience. The Investor understands that the
acquisition of the Purchased Shares involves substantial risk. The Investor: (i)
has experience as an investor in securities of companies in the development
stage and acknowledges that it is able to fend for itself, can bear the economic
risk of its acquisition of the Purchased Shares and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of this acquisition of the Purchased Shares and protecting its
own interests in connection with this acquisition and/or (ii) has a preexisting
personal or business relationship with the Company and certain of its officers,
directors or controlling persons of a nature and duration that enables the
Investor to be aware of the character, business acumen and financial
circumstances of such persons.

                  4.6 Restricted Securities. The Investor understands that the
Purchased Shares are characterized as "restricted securities" under the Act
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under the Act and applicable rules and
regulations thereunder such securities may be resold without registration under
the Act only in certain limited circumstances. In this connection, the Investor
represents that it is familiar with Rule 144 of the rules and regulations
promulgated under the Act ("Rule 144"), as presently in effect, and understands
the resale limitations imposed thereby and by the Act. The Investor understands
that the Company is under no obligation to register any of the securities sold
hereunder except as provided in the Investor Rights Agreement. The Investor
understands that no public market now exists for any of the Purchased Shares and
that it is uncertain whether a public market will ever exist for the Purchased
Shares or the Conversion Shares.

                  4.7 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, the Investor further agrees not to
make any disposition of all or any portion of the Purchased Shares or the
Conversion Shares unless and until:

                           (a) there is then in effect a registration statement
under the 1933 Act covering such proposed disposition and such disposition is
made in accordance with such registration statement; or

                                       14

<PAGE>

                           (b) (i) the Investor shall have notified the Company
of the proposed disposition and shall have furnished the Company with a
statement of the circumstances surrounding the proposed disposition, and (ii)
the Investor shall have furnished the Company, at the expense of the Investor or
its transferees, with an opinion of counsel, reasonably satisfactory to the
Company, that such disposition will not require registration of such securities
under the Act.

                  Notwithstanding the provisions of paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall be required:
(i) for any transfer of any Purchased Shares or Conversion Shares in compliance
with Rule 144 or Rule 144A; or (ii) for any transfer of any Purchased Shares or
Conversion Shares by the Investor to (A) a partner or member of such Investor,
(B) a retired partner of such Investor who retires after the date hereof, or (C)
the estate of any such partner or member; provided that in each of the foregoing
cases the transferee agrees in writing to be subject to the terms of this
Section 4 (other than Section 4.4) to the same extent as if the transferee were
an original Investor hereunder.

                  4.8 Legends. It is understood that the certificates evidencing
the Purchased Shares and the Conversion Shares will bear the legends set forth
below:

                           (a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.

                           (b) Any legend required by state securities laws,
including a legend substantially in the form of the following:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE:  (1) ARE
         CONVERTIBLE INTO SHARES OF COMMON STOCK OF THE COMPANY AT
         THE OPTION OF THE HOLDER AT ANY TIME PRIOR TO AUTOMATIC
         CONVERSION THEREOF; AND (2) AUTOMATICALLY CONVERT INTO
         COMMON STOCK OF THE COMPANY IN THE EVENT OF A PUBLIC
         OFFERING MEETING CERTAIN REQUIREMENTS OR UPON CERTAIN
         CONSENTS OF THE HOLDERS OF THE COMPANY'S PREFERRED STOCK
         ALL PURSUANT TO AND UPON THE TERMS AND CONDITIONS SPECIFIED
         IN THE COMPANY'S CERTIFICATE OF DESIGNATION.  A COPY OF SUCH
         CERTIFICATE OF DESIGNATION MAY BE OBTAINED, WITHOUT CHARGE,
         AT THE COMPANY'S PRINCIPAL OFFICE.

                                       15

<PAGE>

         The legend set forth in (a) above shall be removed by the Company from
any certificate evidencing Purchased Shares or Conversion Shares upon delivery
to the Company of an opinion by counsel, reasonably satisfactory to the Company,
that a registration statement under the Act is at that time in effect with
respect to the legended security or that such security can be freely transferred
in a public sale without such a registration statement being in effect and that
such transfer will not jeopardize the exemption or exemptions from registration
pursuant to which the Company issued the Purchased Shares or Conversion Shares.

         5. CONDITIONS TO INVESTOR'S OBLIGATIONS AT CLOSING. The obligations of
the Investor to the Company under this Agreement are subject to the fulfillment
or waiver, on or before the Closing, of each of the following conditions, the
waiver of which shall not be effective against the Investor if the Investor does
not consent to such waiver, which consent may be given by written communication
to the Company or its counsel:

                  5.1 Representations and Warranties True. Each of the
representations and warranties of the Company contained in Section 3 shall be
true and correct on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.

                  5.2 Due Diligence. The Investor shall have completed, to its
sole satisfaction, its due diligence of the Company.

                  5.3 Ownership and Nondisclosure Agreement. As provided in
Section 3.8 above, the Company shall have furnished the Investor with copies of
the Ownership and Nondisclosure Agreement signed by each employee, officer,
consultant or contractor of the Company identified on Schedule 3.8.

                  5.4 Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.

                  5.5 Series A Certificate. The Series A Certificate shall have
been duly adopted by the Company by all necessary corporate action of its Board
of Directors and stockholders, and shall have been duly filed with and accepted
by the Delaware Secretary of State.

                  5.6 Omitted.

                                       16

<PAGE>

                  5.7 Securities Exemptions. The offer and sale of the Purchased
Shares to the Investor pursuant to this Agreement shall be exempt from the
registration requirements of the Act and the registration and/or qualification
requirements of all other applicable state securities laws.

                  5.8 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to the Investor and to the counsel for the Investor, and they shall
each have received all such counterpart originals and certified or other copies
of such documents as they may reasonably request. Such documents shall include
(but not be limited to) the following:

                           (a) Certified Charter Documents. A copy of the
Certificate of Incorporation, Series A Certificate and Bylaws of the Company (as
amended through the date of the Closing), certified by the Secretary of the
Company as true and correct copies thereof as of the Closing.

                           (b) Corporate Actions. A copy of the resolutions of
the Board of Directors and the stockholders of the Company evidencing the
approval of the Series A Certificate, the approval of this Agreement, the
Related Agreements, the issuance of the Purchased Shares and the other matters
contemplated hereby, certified by the Secretary of the Company to be true,
complete and correct.

                  5.9 Ownership of Technology. The Investor shall have received
from the Company all documents and other materials requested by the Investor in
writing for the purpose of examining and determining the Company's rights in and
to any technology, product and Proprietary Assets now used, proposed to be used
in, or necessary to, the Company's business as now conducted and proposed to be
conducted, and the status of the Company's ownership rights in and to all such
technology, products and Proprietary Assets shall be reasonably satisfactory to
the Investor.

                  5.10 Board of Directors. All appropriate action shall be taken
to ensure that the Company's Board of Directors consists of: G. Mark Miller,
Allison Stollmeyer, Lee C. Hansen and two additional members to be determined
following the Closing.

                  5.11 Officers' Certificates. The Company shall deliver to the
Investor certificates executed by each of its officers and directors in which
each of them represents that he or she (i) has not made a personal filing or
been an officer or director, partner or member of an entity that has filed an
action seeking protection under the Bankruptcy Code of the United States of
America or analogous law of any jurisdiction not subject to the laws of the
United States of America during the past seven (7) years and (ii) has never been
convicted of any action that is defined as a crime that would adversely affect
the company or its public image or would be required to be disclosed under
Paragraph 401(f) of Regulation 5-K under the Act.

                                       17

<PAGE>

                  5.12 No Material Change. There shall have been no material
adverse change in the business, affairs, prospects, operations, properties,
assets or condition of the Company.

                  5.13 Omitted.

                  5.14 Investor Rights Agreement. The Company and the Investor
shall have executed and delivered the Investor Rights Agreement in the form
attached to this Agreement as Exhibit D (the "Investor Rights Agreement").

                  5.15 Co-Sale Agreement. The Company, the stockholders of the
Company named therein and the Investor shall have executed and delivered the
Co-Sale Agreement in the form attached as Exhibit E (the "Co-Sale Agreement").

                  5.16 Strategic Plan. The Company and the Investor shall have
commenced mutually developing a Strategic Plan for the Company. The Company
covenants and agrees to continue mutual development of the strategic Plan
following Closing. The Strategic Plan shall be inserted in the Company's minute
books for reference and be updated on an annual basis.

                  5.17 Payment of Expenses. The Company shall have paid the
commissions, fees, costs and expenses identified in Section 7.10 of this
Agreement.

                  5.18 Employment Agreements. The Company shall have executed
with each of the individuals set forth on Schedule 5.18 (the "Founders")
employment agreements, and stock restriction agreements, in form satisfactory to
the Investor (collectively, the "Employment Agreements").

                  5.19 Omitted.

                  5.20 Year 2000 Budget. The Company shall provide the Investor
with operating and capital budgets for the calendar year 2000 which are
acceptable to the Investor.

                  5.21 D&O Insurance. The Company shall procure and maintain at
all times Directors and Officers Liability Insurance with industry standard
coverage limits for companies that are similar to the Company, but in no event
less than $2,000,000 per occurrence.

                  5.22 Due Diligence. The Investor shall have completed its due
diligence to its satisfaction as determined in its sole discretion.

         6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to the Investor under this Agreement are subject to the
fulfillment or waiver, on or before the Closing, of each of the following
conditions, the waiver of which shall not be effective against the Company if
the Company does not consent to such waiver, which consent may be given by
written communication to the Investor or its counsel:

                                       18

<PAGE>

                  6.1 Representations and Warranties. The representations and
warranties of the Investor contained in Section 5 shall be true and correct on
the date of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.

                  6.2 Payment of Purchase Price. The Investor shall have
delivered to the Company one million dollars ($1,000,000) in accordance with the
provisions of Section 2.

                  6.3 Series A Certificate. The Series A Certificate shall have
been duly adopted by the Company by all necessary corporate action of its Board
of Directors and stockholders, and shall have been duly filed with and accepted
by the Delaware Secretary of State.

                  6.4 Securities Exemptions. The offer and sale of the Purchased
Shares to the Investor pursuant to this Agreement shall be exempt from the
registration requirements of the Act and the registration and/or qualification
requirements of all other applicable state securities laws.

                  6.5 Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to the Company and to the Company's legal counsel, and the Company
shall have received all such counterpart originals and certified or other copies
of such documents as it may reasonably request.

                  6.6 Investor Rights Agreement. The Company and the Investor
shall have executed and delivered the Investor Rights Agreement.

                  6.7 Co-Sale Agreement. The Company, the stockholders of the
Company named therein and the Investor shall have executed and delivered the
Co-Sale Agreement.

         7. MISCELLANEOUS.

                  7.1 Survival of Warranties. The representations, warranties
and covenants of the Company and the Investor contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investor, its counsel or the Company,
as the case may be.

                  7.2 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties.

                  7.3 Governing Law; Venue; Waiver of Jury Trial. This Agreement
and the Related Agreements shall be governed by and construed under the internal
laws of the State of Delaware, without reference to principles of conflict of
laws or choice of laws. The venue for any claim, controversy or dispute which

                                       19

<PAGE>

arises between the parties hereto (with respect to this Agreement or any Related
Agreement) shall be the United States District Court for the District of
Delaware (or state court if federal jurisdiction does not apply) and the parties
hereby consent to the jurisdiction of such courts and waive any objection to
such venue. THE PARTIES TO THIS AGREEMENT HEREBY WAIVE THEIR RIGHT TO A TRIAL BY
JURY WITH RESPECT TO DISPUTES ARISING UNDER THIS AGREEMENT AND THE RELATED
AGREEMENTS AND CONSENT TO A BENCH TRIAL WITH THE APPROPRIATE JUDGE ACTING AS THE
FINDER OF FACT.

                  7.4 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.

                  7.5 Headings. The headings and captions used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules shall, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.

                  7.6 Notices. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered or if deposited in the U.S. mail by
registered or certified mail, return receipt requested, postage prepaid, as
follows:
<TABLE>
<CAPTION>

<S>                                    <C>
             If to the Investor:       Net Value Holdings, Inc.
                                       2 Penn Center Plaza
                                       Suite 605
                                       Philadelphia, PA 19103
                                       Attention: Chairman

             with a copy (which shall not constitute notice hereunder) to:

                                       Klehr, Harrison, Harvey, Branzburg & Ellers LLP
                                       260 S. Broad Street
                                       Philadelphia, Pennsylvania  19102
                                       Attention: Michael C. Forman, Esq.

             If to the Company:        AlarmX.com, Inc.
                                       1085 Mission
                                       San Francisco, CA 94103
                                       Attention: President

</TABLE>

                                       20

<PAGE>

Any party hereto (and such party's permitted assigns) may by notice so given
change its address for future notices hereunder. Notice shall conclusively be
deemed to have been given when personally delivered or when deposited in the
mail in the mail in the manner set forth above.

                  7.8 No Finder's Fees. Neither the Investor, the Company, or
any officer, director, or employee of the Investor or the Company (i) employed
any broker or finder, or (ii) incurred any liability whatsoever, for any
brokerage fees, commissions, or finders' fees in connection with the
transactions contemplated hereby. The Investor agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of a finders' or broker's fee (and any asserted liability) for which
the Investor or any of its officers, partners, employees, or representatives is
responsible. The Company agrees to indemnify and hold harmless the Investor from
any liability for any commission or compensation in the nature of a finder's or
broker's fee (and any asserted liability) for which the Company or any of its
officers, employees or representatives is responsible.

                  7.9 Attorneys' Fees. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the Related
Agreements or the Series A Certificate, 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.

                  7.10 Costs, Expenses. The Company shall pay, or reimburse the
Investor, for all costs and out-of pocket expenses of the Investor incurred in
connection with (i) the Investor's due diligence performed in connection with
its proposed investment in the Company; and (ii) the negotiation, preparation,
execution and delivery of this Agreement, the Related Agreements and the Series
A Certificate (including without limitation, the fees and expenses of counsel to
the Investor), such fees and expenses not to exceed $10,000. The Company shall
also pay its own legal and accounting expenses in connection with the investment
up to a maximum of $5,000.

                  7.11 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 Investor.
Any amendment or waiver effected in accordance with this Section 8.10 shall be
binding upon each holder of any Purchased Shares and/or Conversion Shares at the
time outstanding, each future holder of such securities, and the Company.

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

                  7.13 Entire Agreement. This Agreement, together with all
exhibits and schedules hereto, constitutes the entire agreement and
understanding of the parties with respect to the subject

                                       21

<PAGE>

matter hereof and supersedes any and all prior negotiations, correspondence,
agreements, understandings duties or obligations between the parties with
respect to the subject matter hereof.

                  7.14 Further Assurances. From and after the date of this
Agreement, upon the request of the Investor or the Company, the Company and the
Investor shall execute and deliver such instruments, documents or other writings
as may be reasonably necessary or desirable to confirm and carry out and to
effectuate fully the intent and purposes of this Agreement.

                  7.15 Mutual Drafting. This Agreement is the result of the
joint efforts of the Company and the Investor, and each provision hereof has
been subject to the mutual consultation, negotiation and agreement of the
parties and there shall be no construction against any party based on any
presumption of the party's involvement in the drafting thereof.

         IN WITNESS WHEREOF, the parties hereto have executed this Series A
Convertible Preferred Stock Purchase Agreement as of the date first above
written.

                                     THE COMPANY:

                                     ALARMX.COM, INC.,
                                      a Delaware corporation

                                     By:
                                        ----------------------------------
                                           Allison Stollmeyer, President

                                     THE INVESTOR:

                                     NET VALUE HOLDINGS, INC.,
                                     a Delaware corporation

                                     By:
                                        ----------------------------------
                                            Andrew P. Panzo, Chairman

                                       22

<PAGE>

                         LIST OF SCHEDULES AND EXHIBITS

                                    SCHEDULES

Schedule 3.2(c)        Outstanding Warrants, Options and Reserved Shares
Schedule 3.2(d)        Outstanding Security Holders
Schedule 3.7           Litigation
Schedule 3.8           Key Employees
Schedule 3.9(a)        Ownership of Proprietary Assets
Schedule 3.9(b)        Licenses, Other Agreements relating to Proprietary Assets
Schedule 3.11          List of Material Contracts
Schedule 3.15A         Year End Financial Statements
Schedule 3.15B         Interim Financial Statements
Schedule 3.16          Certain Actions
Schedule 3.17          Activities Since Balance Sheet Date
Schedule 3.18          ERISA Plans
Schedule 3.20          Tax Matters
Schedule 3.21(b)       Employee Matters
Schedule 3.24          Use of Proceeds
Schedule 3.25          Business Plan
Schedule 3.30          Employees, Officers, Consultants
Schedule 3.31          Founders

                                EXHIBITS

Exhibit A              Series A Certificate
Exhibit B              Form of Ownership and Nondisclosure Agreement
Exhibit C              Form of Employment Agreement
Exhibit D              Form of Investor Rights Agreement
Exhibit E              Form of Co-Sale Agreement

                                       23<PAGE>

                                                                   Exhibit 10.41

                            INVESTOR RIGHTS AGREEMENT

         THIS INVESTOR RIGHTS AGREEMENT (this "Agreement ") is made and entered
into as of this 14th day of March, 2000, by and between ALARMX.COM, INC., a
Delaware corporation (the "Company") and NET VALUE HOLDINGS, INC., a Delaware
corporation (the "Investor").

                                    RECITALS

         A. The Investor has agreed to purchase from the Company, and the
Company has agreed to sell to the Investor, Four Million (4,000,000) shares of
the Company's Series A Convertible Preferred Stock, par value $0.001 per share
(the "Series A Stock"), on the terms and conditions set forth in that certain
Series A Convertible Preferred Stock Purchase Agreement, of even date herewith,
by and between the Company and the Investor (the "Series A Agreement").
Capitalized terms used herein but not otherwise defined shall have the meaning
given such terms in the Series A Agreement.

         B. The Series A Agreement provides that the Investor shall be granted
certain information, registration rights and rights of first refusal, all as
more fully set forth herein.

                                    AGREEMENT

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

1.  INFORMATION RIGHTS.

         1.1. Financial Information. The Company covenants and agrees that,
commencing on the date of this Agreement, for so long as the Investor holds any
shares of Series A Preferred Stock and/or shares of Common Stock of the Company
issued upon the conversion of such shares of Series A Preferred Stock, the
Company will:

                  (a) Annual Reports. Furnish to the Investor, as soon as
practicable and in any event within sixty (60) days after the end of each fiscal
year of the Company, a Balance Sheet as of the end of such fiscal year, a
Statement of Income and a Statement of Cash Flows of the Company for such year,
setting forth in each case in comparative form the figures from the Company's
previous fiscal year (if any), all prepared in accordance with generally
accepted accounting principles and practices and audited by an independent
certified public accountant selected by the Company and acceptable to the
Investor. Draft copies of the annual Balance Sheet, Statement of Income and
Statement of Cash Flows, if any, shall be furnished to the Investor immediately
following their receipt by the Company.

                                        1

<PAGE>

                  (b) Quarterly Reports. Furnish to the Investor as soon as
practicable, and in any case within thirty (30) days of the end of each fiscal
quarter of the Company (except the last quarter of the Company's fiscal year),
quarterly and year-to-date unaudited financial statements, including an
unaudited Balance Sheet, an unaudited Statement of Income and an unaudited
Statement of Cash Flows, together with a management report thereon. Management
reports shall include a budget variance analysis and a discussion and analysis
of the related financial statements.

                  (c) Monthly Reports. Furnish to the Investor within twenty
(20) days of the end of each calendar month, monthly and year-to-date unaudited
financial statements, including an unaudited Balance Sheet, an unaudited
Statement of Income and an unaudited Statement of Cash Flows, together with an
unaudited management report thereon (including a budget variance analysis and
management's discussion and analysis).

                  (d) Annual Budget and Management Reports . Furnish to the
Investor, as soon as practicable and in any event no later than forty-five (45)
days before the close of each fiscal year of the Company, a management report
and an annual operating plan and budget, prepared on a quarterly basis, for the
next immediate fiscal year, and on a basis consistent with prior periods
(including, among other items, appropriate reserves, accruals and provisions for
income taxes). The Company shall also furnish to the Investor, within a
reasonable time of its preparation, any amendments to the annual budget that
have been prepared at the discretion of or for presentation to the Board. Such
budget shall include underlying assumptions and a qualitative description of the
Company's plan by the Chief Executive Officer, Chief Financial Officer, Chief
Accounting Officer or Controller in support of that budget.

                  (e) Material Events. The Company will notify the Investor, as
soon as possible and in any event within ten (10) days, of (i) the existence and
status of any litigation, pending or threatened, which could, in the event of an
unfavorable outcome, have a material adverse effect upon the financial condition
or results of operations of the Company considered in the aggregate, (ii) any
material change in any material fact or circumstance represented or warranted in
this Agreement and (iii) a default or any event or occurrence which with lapse
of time or notice or both could become a default under the Series A Agreement.
Such notice shall contain a reasonably detailed statement outlining such default
or event, and the Company's proposed response.

                  (f) Confidentiality. The Investor agrees to hold all
information received pursuant to this Agreement in confidence, and not to use or
disclose any of such information to any third party, except to the extent such
information may be made publicly available by the Company; provided, however,
that the Investor may, in the ordinary course of business, provide the financial

                                        2

<PAGE>

results of the Company to third parties in the same manner such information is
provided by the Investor with respect to its portfolio companies.

                  (g) Substitute Financials. In the event the Company fails to
provide the reports required by Section 1.1, the Investor may give the Company
notice requesting immediate delivery of such reports. If the Company fails to
deliver such reports within a two-week period after receipt of such notice from
the Investor, then the Investor, shall have the right and authority, at the
Company's sole expense, to retain the services of attorneys and/or a nationally
recognized accounting firm of its choice (the expense of which shall not exceed
the usual and customary expenses associated with such an audit), to make any
require filings such that the reports are produced to the satisfaction of the
Investor. All fees and costs associated with such actions by Investor shall be
the sole expense of the Company.

                  (h) Other Information. The Company shall provide such other
financial data and operational information as may reasonably be requested in
writing by the Investor within twenty (20) days after the later of (i) the close
of each calendar month and (ii) the date of the Investor's request. The Company
shall provide to the Investor, promptly upon request, such other information as
the Investor shall reasonably request in order for the preparation of annual,
quarterly and other reports filed by the Investor under the Securities Act of
1933 and the Securities Exchange Act of 1934.

                  (i) Variance Reports; Certifications. Each of the financial
statements and other reports described in this Section 1.1 shall be accompanied
by a report of the Chief Financial Officer, Chief Accounting Officer or
Controller of the Company explaining any material variances in such financial
statement or report from the Company's operating plan and budget for the quarter
covered and stating that such financial statement or report fairly presents the
financial position and financial results of the Company for the period covered.

                  (j) Company's Failure to Comply. In the event that the Company
fails to provide any information required by this Section 1.1, it shall
reimburse the Investor for all fees and expenses of attorneys and accountants
incurred in the preparation of such financial statement and management reports
necessary for the Investor to comply with its reporting requirements.

         1.2. Inspection Rights. The Company shall permit a designated
representative of the Investor, at the Investor's expense, to visit and inspect
the Company's properties, to examine its books of account, operational records,
and reports and to discuss the business, operations, and financial affairs of
the Company with its respective officers, all at such reasonable times as may be
requested by the Investor. The Company will provide the Investor's
representatives with any additional information, opinions, certifications, and

                                        3

<PAGE>

documents, in addition to those herein mentioned, relating to the operation of
the Company as may be reasonably requested.

         1.3. Termination of Certain Rights. The Company's obligations under
Sections 1.1 and 1.2 above will terminate upon (a) the consummation of a
Qualifying IPO (as defined in Section 5(b) of the Company's Series A
Certificate) or (b) a consolidation or merger of the Company with or into any
other corporation in which the holders of record of the Company's outstanding
shares of stock immediately before such consolidation or merger hold (by virtue
of securities issued as consideration in such transaction or otherwise) less
than a majority of the voting power of the surviving corporation of such
consolidation or merger, or the sale of all or substantially all of the assets
of the Company (a "Change of Control Event"). After a Qualifying IPO, the
Company shall provide the Investor with all reports normally provided to its
shareholders.

         1.4. Rule 144A Information, PORTAL. At all times during which the
Company is neither subject to the reporting requirements of Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor
exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, provide
in written form, upon the written request of the Investor, or a prospective
purchaser of securities of the Company from the Investor, all information
required by Rule 144A(d)(4)(i) of the Rules and Regulations promulgated under
the Securities Act (the "144A Information"); the Company further agrees, upon
written request, to cooperate with and assist the Investor or any member of the
National Association of Securities Dealers, Inc. system for Private Offerings
Resales and Trading through Automated Linkages ("PORTAL") in applying to
designate and thereafter maintaining the eligibility of the Company's securities
for trading through PORTAL. With respect to each, the Company's obligations
under this Section 1.4 shall at all times be contingent upon the Investor's
obtaining from a prospective purchaser an agreement to use its commercially
reasonable efforts to safeguard the 144A Information from disclosure to anyone
other than employees of the prospective purchaser who require access to the 144A
Information for the sole purpose of evaluating its purchase of the Company's
securities.

2.  REGISTRATION RIGHTS.

         2.1. Definitions. For purposes of this Section 2.1:

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

                  (b) Registrable Securities. The term "Registrable Securities"
means: (i) all the shares of Common Stock of the Company issued or issuable upon
the conversion of any shares of Series A Stock issued under the Series A
Agreement that are now owned or may hereafter be acquired by the Investor or the
Investor's permitted successors and assigns; and (ii) any shares of Common Stock
of the Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of, all such

                                        4

<PAGE>

shares of Common Stock described in clause (i) of this Section 2.1(b), excluding
in all cases, however, any Registrable Securities sold by a person in a
transaction in which rights under this Section 2.1 are not assigned in
accordance with this Agreement or any Registrable Securities sold to the public
or sold pursuant to Rule 144 promulgated under the Securities Act.

                  (c) Registrable Securities Then Outstanding. The number of
shares of "Registrable Securities Then Outstanding" shall mean the number of
shares of Common Stock which are Registrable Securities and are then (i) issued
and outstanding or (ii) issuable pursuant to the exercise or conversion of then
outstanding and then exercisable options, warrants or convertible securities.

                  (d) Holder. The term "Holder" means any person owning of
record Registrable Securities that have not been sold to the public or pursuant
to Rule 144 promulgated under the Securities Act or any assignee of record of
such Registrable Securities to whom rights under this Section 2 have been duly
assigned in accordance with this Agreement; provided, however, that for purposes
of this Agreement, a record holder of shares of Series A Stock convertible into
such Registrable Securities shall be deemed to be the Holder of such Registrable
Securities; provided, further, that the Company shall in no event be obligated
to register shares of Series A Stock, and that Holders of Registrable Securities
will not be required to convert their shares of Series A Stock into Common Stock
in order to exercise the registration rights granted hereunder, until
immediately before the closing of the offering to which the registration
relates.

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

                  (f) Securities Act. The term "Securities Act" means the
Securities Act of 1933, as amended.

                  (g) SEC. The term "SEC" or "Commission" means the U.S.
Securities and Exchange Commission.

         2.2.  Demand Registration.

                  (a) Request by Holders. If the Company shall receive at any
time after ninety (90) days after the effective date of the Company's initial
public offering of its securities pursuant to a registration filed under the
Securities Act, a written request from the Holders of at least a majority of the
Registrable Securities Then Outstanding that the Company file a registration
statement under the Securities Act covering the registration of Registrable
Securities pursuant to this Section 2.2 then the Company shall, within ten (10)
business days of the receipt of such written request, give written notice of
such request ("Request Notice") to all Holders, and effect, as soon as

                                        5

<PAGE>

practicable, the registration under the Securities Act of all Registrable
Securities which Holders request to be registered and included in such
registration by written notice given such Holders to the Company within twenty
(20) days after receipt of the Request Notice, subject only to the limitations
of this Section 2.2.

                  (b) Underwriting. If the Holders initiating the registration
request under this Section 2.2 ("Initiating Holders"), intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
then they shall so advise the Company as a part of their request made pursuant
to this Section 2.2 and the Company shall include such information in the
written notice referred to in Section 2.2(a). In such event, the right of any
Holder to include 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 enter into an
underwriting agreement in customary form with the managing underwriter or
underwriters selected for such underwriting by the Company and a majority in
interest of the Initiating Holders. Notwithstanding any other provision of this
Section 2.2 to the contrary, if the underwriter(s) advise(s) the Company in
writing that marketing factors require a limitation of the number of securities
to be underwritten then the Company shall so advise all Holders of Registrable
Securities which would otherwise be registered and underwritten pursuant hereto,
and the number of Registrable Securities that may be included in the
underwriting shall be reduced as required by the underwriter(s) and allocated
among the Holders of Registrable Securities on a pro rata basis according to the
number of Registrable Securities Then Outstanding held by each Holder requesting
registration (including the Initiating Holders); provided, however, that the
number of shares of Registrable Securities to be included in such underwriting
and registration shall not be reduced unless all other securities of the Company
are first entirely excluded from the underwriting and registration. Any
Registrable Securities excluded and withdrawn from such underwriting shall be
withdrawn from the registration.

                  (c) Maximum Number of Demand Registrations. The Company is
obligated to effect only two (2) Demand Registration pursuant to this Section
2.2.

                  (d) Deferral. Notwithstanding anything to the contrary
contained in the preceding subsection (c), if the Company shall furnish to
Holders requesting the filing of a registration statement pursuant to this
Section 2.2, a certificate signed by the President or 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 registration statement to be filed and it is, therefore,
essential to defer the filing of such registration statement, then the Company
shall have the right to defer such filing for a period of not more than 120 days
after receipt of the request of the Initiating Holders; provided, however, that
the Company may not utilize this right more than once in any twelve (12) month
period.

                                        6

<PAGE>

                  (e) Expenses. All expenses incurred in connection with a
registration pursuant to this Section 2.2, including without limitation all
registration and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements of one counsel for the selling Holders (excluding underwriters'
discounts and commissions), shall be borne by the Company. Each Holder
participating in a registration pursuant to this Section 2.2 shall bear such
Holder's proportionate share (based on the total number of shares sold in such
registration other than for the account of the Company), of all discounts,
commissions or other amounts payable to underwriters or brokers in connection
with such offering. Notwithstanding the foregoing, the Company shall not be
required to pay for any expenses of any registration proceeding begun pursuant
to this Section 2.2 if the registration request is subsequently withdrawn at the
request of the Holders of a majority of the Registrable Securities requested to
be registered; provided however, that if at the time of such withdrawal, the
Holders have learned of a material adverse change in the condition, business, or
prospects of the Company not known to the Holders at the time of their request
for such registration and have withdrawn their request for registration with
reasonable promptness after learning 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 this Section 2.2.

         2.3.     Piggyback Registrations.

                  (a) Registration Rights. The Company shall notify all Holders
of Registrable Securities in writing at least thirty (30) days prior to filing
any registration statement under the Securities Act for purposes of effecting a
public offering of securities of the Company, including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but specifically excluding registration statements relating to: (i) any
registration under Section 2.2 or Section 2.4 of this Agreement; or (ii) any
employee benefit plan, corporate reorganization or acquisition or other
transactions under Rule 145 of the Securities Act of 1933, and will afford each
such Holder an opportunity to include in such registration statement all or any
part of the Registrable Securities then held by such Holder. Each Holder
desiring to include in any such registration statement all or any part of the
Registrable Securities held by such Holder shall, within twenty (20) days after
receipt of the above-described notice from the Company, so notify the Company in
writing, and in such notice shall inform the Company of the number of
Registrable Securities such Holder wishes to include in such registration
statement. If a Holder decides not to include all of its Registrable Securities
in any registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.

                  (b) Underwriting. If a registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering,
then the Company shall so advise the Holders of Registrable Securities. In such
event, the right of any such Holder's Registrable Securities to be included in a
registration pursuant to this Section 2.3 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All

                                        7

<PAGE>

Holders proposing to distribute their Registrable Securities through such
underwriting shall enter into an underwriting agreement in customary form with
the managing underwriter or underwriter(s) selected for such underwriting.
Notwithstanding any other provision of this Agreement, if the managing
underwriter determines in good faith that marketing factors require a limitation
of the number of shares to be underwritten, then the managing underwriter may
exclude shares (including Registrable Securities) from the registration and the
underwriting, and the number of shares that may be included in the registration
and the underwriting shall be allocated, first, to any holders of registration
rights who exercised such rights to cause the Company to file the registration
statement; second, to the Company, and third, to each of the Holders and any
other holders of similar "piggyback" registration rights ("Other Holders")
requesting inclusion of their Registrable Securities in such registration
statement on a pro rata basis based on the total number of Registrable
Securities then held by each such Holder and Other Holders; provided, however,
that the right of the underwriters to exclude shares (including Registrable
Securities) from the registration and underwriting as described above shall be
restricted so that (i) the number of Registrable Securities included in any such
registration is not reduced below ten percent (10%) of the shares included in
the registration, except for a registration relating to the Company's initial
public offering from which all Registrable Securities shall be excluded; and
(ii) all shares that are not Registrable Securities and are held by persons who
are employees or directors of the Company (or any subsidiary of the Company)
shall first be excluded from such registration and underwriting before any
Registrable Securities are so excluded. If any Holder disapproves of the terms
of any such underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company and the underwriter, delivered at least ten (10) business
days prior to the effective date of the registration statement. Any Registrable
Securities excluded or withdrawn from such underwriting shall be excluded and
withdrawn from the registration. For any Holder which 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 "Holder", and any pro rata reduction with respect to such "Holder" shall
be based upon the aggregate amount of shares carrying registration rights owned
by all entities and individuals included in such "Holder", as defined in this
sentence.

                  (c) Expenses. All expenses incurred in connection with a
registration pursuant to this Section 2.3 (excluding underwriters' and brokers'
discounts and commissions), including, without limitation all federal and ""blue
sky"" registration and qualification fees, printers' and accounting fees, fees
and disbursements of counsel for the Company and reasonable fees and
disbursements of one counsel for the selling Holders shall be borne by the
Company.

         2.4. Form S-3 Registration. In case the Company shall receive from any
Holder or Holders a written request or requests that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, then the Company will:

                                        8

<PAGE>

                  (a) Notice. Promptly give written notice of the proposed
registration and the Holder's or Holders' request therefor, and any related
qualification or compliance, to all other Holders of Registrable Securities; and

                  (b) Registration. As soon as practicable, effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Holder's or Holders' Registrable Securities as are specified in
such request, together with all or such portion of the Registrable Securities of
any other Holder or Holders joining in such request as are specified in a
written request given within twenty (20) days after receipt of such written
notice from the Company; provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance pursuant
to this Section 2.4:

                           (i) if Form S-3 is not available for such offering by
the Holders; or

                           (ii) 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) Expenses. Subject to the foregoing, the Company shall file
a Form S-3 registration statement covering the Registrable Securities and other
securities so requested to be registered pursuant to this Section 2.4 as soon as
practicable after receipt of the request or requests of the Holders for such
registration. The Company shall pay all expenses incurred in connection with
each registration requested pursuant to this Section 2.4, (excluding
underwriters' or brokers' discounts and commissions), including without
limitation all filing, registration and qualification, printers' and accounting
fees and the reasonable fees and disbursements of one counsel for the selling
Holder or Holders and counsel for the Company.

                  (d) Not Demand Registration. Form S-3 registrations shall not
be deemed to be a demand registration as described in Section 2.2 above.

         2.5. Obligations of the Company. Whenever required, upon request in
accordance with this Section 2.5, to effect the registration of any Registrable
Securities under this Agreement, the Company shall, as expeditiously and as
reasonably as possible:

                  (a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its reasonable efforts to
cause such registration statement to become effective, and, upon the request of
the Holders of a majority of the Registrable Securities registered thereunder,
keep such registration statement effective for up to ninety (90) days.

                  (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

                                        9

<PAGE>

provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement for the period set forth in
paragraph (a) above.

                  (c) Furnish to the Holders such number of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by them that are included in such registration.

                  (d) Use its reasonable 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(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

                  (f) 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 Securities Act of 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 material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.

                  (g) Furnish, at the request of any Holder requesting
registration of Registrable Securities, on the date that such Registrable
Securities are delivered to the underwriters for sale, 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 as of 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 and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a
"comfort" letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities.

         2.6. Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 2.2, 2.3 or
2.4 that the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them, and

                                       10

<PAGE>

the intended method of disposition of such securities as shall be required to
timely effect the registration of their Registrable Securities.

         2.7. Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 2.

         2.8. Indemnification. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:

                  (a) By the Company. To the extent permitted by law, the
Company will indemnify and hold harmless each Holder, the partners, officers and
directors of each Holder, any underwriter (as defined in the Securities Act) for
such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
as amended, (the "1934 Act"), against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
Securities Act, the 1934 Act or other federal or state law, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or
violations (collectively a "Violation"):

                           (i) any untrue statement or alleged untrue statement
of a material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto;

                           (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to make the
statements therein not misleading, or

                           (iii) any violation or alleged violation by the
Company of the Securities Act, the 1934 Act, any federal or state securities law
or any rule or regulation promulgated under the Securities Act, the 1934 Act or
any federal or state securities law in connection with the offering covered by
such registration statement; and the Company will reimburse each such Holder,
partner, officer or director, underwriter or controlling person for any legal or
other expenses reasonably incurred by them, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 2.8(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), 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 upon a Violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by such Holder, partner,
officer, director, underwriter or controlling person of such Holder, including
without limitation, any information furnished by any Holder of the Company
pursuant to Section 2.6 hereof.

                                       11

<PAGE>

                  (b) By Selling Holders . 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 have signed the registration statement, each
person, if any, who controls the Company within the meaning of the Securities
Act, any underwriter and any other Holder selling securities under such
registration statement or any of such other Holder's partners, directors or
officers or any person who controls such Holder within the meaning of the
Securities Act or the 1934 Act (collectively "Company Indemnitee"), against any
losses, claims, damages or liabilities (joint or several) to which the Company
or any such Company Indemnitee may become subject under the Securities Act, the
1934 Act or other federal or state law, insofar as such losses, claims, damages
or liabilities (or actions in respect thereto) arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such registration;
and each such Holder will reimburse any legal or other expenses reasonably
incurred by the Company or any such Company Indemnitee in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 2.8(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Holder, which consent shall not be unreasonably withheld; and provided, further,
that the total amounts payable in indemnity by a Holder under this Section
2.8(b) in respect of any Violation shall not exceed the gross proceeds received
by such Holder in the registered offering out of which such Violation arises.

                  (c) Notice. Promptly after receipt by an indemnified party
under this Section 2.8 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 2.8,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own 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 conflict of interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 2.8, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it
may have to any indemnified party otherwise than under this Section 2.8.

                  (d) Defect Eliminated in Final Prospectus. The foregoing
indemnity agreement of the Holders is subject to the conditions that, insofar as
it relates to: (i) any Violation made in a prospectus in which the Company is
selling securities; and (ii) any Violation made in a preliminary prospectus but
eliminated or remedied in the amended prospectus on file with the SEC at the
time the registration statement in question becomes effective or the amended
prospectus filed with the SEC pursuant to SEC Rule 424(b) (the "Final

                                       12

<PAGE>

Prospectus"), such indemnity agreement shall not inure to the benefit of the
Company if a copy of the Final Prospectus was furnished to the Holders and was
not furnished by the Company to the person asserting the loss, liability, claim
or damage at or prior to the time such action is required by the Securities Act.

                  (e) Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either (i) any Holder exercising rights under this Agreement, or any controlling
person of any such Holder, makes a claim for indemnification pursuant to this
Section 2.8, but it is judicially determined (by the entry of a final judgment
or decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification may
not be enforced in such case notwithstanding the fact that this Section 2.8
provides for indemnification in such case, or (ii) contribution under the
Securities Act may be required on the part of any such selling Holder or any
such controlling person in circumstances for which indemnification is provided
under this Section 2.8; then, and in each such case, the Company and such Holder
will contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion so that
such Holder is responsible for the portion represented by the percentage that
the public offering price of its Registrable Securities offered by and sold
under the registration statement bears to the public offering price of all
securities offered by and sold under such registration statement, and the
Company and other selling Holders are responsible for the remaining portion;
provided, however, that, in any such case, (a) no such Holder will be required
to contribute any amount in excess of the public offering price of all such
Registrable Securities offered and sold by such Holder pursuant to such
registration statement; and (b) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.

                  (f) Survival. The obligations of the Company and Holders under
this Section 2.8 shall survive the completion of any offering of Registrable
Securities in a registration statement, and otherwise.

         2.9. "Lock-up" Agreement. Each Holder hereby agrees that it shall not,
to the extent requested by the Company or an underwriter of securities of the
Company, sell or otherwise transfer or dispose of any Registrable Securities or
other shares of stock of the Company then owned by such Holder (other than to
donees or partners of the Holder who agree to be similarly bound) for up to one
hundred eighty (180) days following the effective date of a registration
statement of the Company filed under the Securities Act; provided, however,
that:

                  (a) such agreement shall be applicable only to the first such
registration statement of the Company which covers securities to be sold on its
behalf to the public in an underwritten offering but not to Registrable
Securities sold pursuant to such registration statement; and

                  (b) all officers, directors then holding Common Stock and all
holders of more than one percent (1%) of the outstanding capital stock of the
Company enter into similar agreements.

                                       13

<PAGE>

In order to enforce the foregoing covenant, the Company shall have the right to
place restrictive legends on the certificates representing the shares subject to
this Section and to impose stop transfer instructions with respect to the
Registrable Securities and such other shares of stock of each Holder (and the
shares or securities of every other person subject to the foregoing restriction)
until the end of such period.

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

                  (a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act, at all times
after the effective date of the first registration under the Securities Act
filed by the Company for an offering of its securities to the general public;

                  (b) Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the 1934 Act (at any time after it has become subject to such
reporting requirements); and

                  (c) So long as a Holder owns any Registrable Securities,
furnish to the Holder forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements of said Rule 144 (at any
time after 90 days after the effective date of the first registration statement
filed by the Company for an offering of its securities to the general public),
and of the Securities Act and the 1934 Act (at any time after it has become
subject to the reporting requirements of the 1934 Act), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company as a Holder may reasonably request in availing itself
of any rule or regulation of the Commission allowing a Holder to sell any such
securities without registration (at any time after the Company has become
subject to the reporting requirements of the 1934 Act).

         2.11. Termination of the Company's Obligations. The Company shall have
no obligations pursuant to Sections 2.2 through 2.4 with respect to: (a) any
request or requests for registration made by any Holder on a date more than five
(5) years after the closing date of a Qualifying IPO; (b) any Registrable
Securities proposed to be sold by a Holder in a registration pursuant to Section
2.2, 2.3 or 2.4 if, in the opinion of counsel to the Company, all such
Registrable Securities proposed to be sold by a Holder may be sold in a three
(3) month period without registration under the Securities Act pursuant to Rule
144 under the Securities Act, or under any replacement rule promulgated by the
SEC permitting the resale of restricted securities without the necessity of a
registration statement; or (c), in connection with any particular registration
undertaken by the Company, any Holder who fails to provide promptly the Company
such information as the Company may reasonably request at any time to enable the
Company to comply with any applicable law or regulation or to facilitate
preparation and filing of said registration.

                                       14

<PAGE>

         2.12. Limitations on Subsequent Registration Rights. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of the Holders of at least sixty-six and two-thirds percent (66-2/3%) of the
Registrable Securities Then Outstanding, enter into any agreement with any
holder or prospective holder of any securities of the Company which would allow
such holder or prospective holder (a) to include such securities in any
registration filed under Section 2.2 hereof, unless under the terms of such
agreement, such holder or prospective holder may include such securities in any
such registration only to the extent that the inclusion of his securities will
not reduce the amount of the Registrable Securities of the Holders which is
included, or (b) to make a demand registration which could result in such
registration statement being declared effective prior to the earlier of either
of the dates set forth in Section 2.2(a), or within one hundred twenty (120)
days of the effective date of any registration effected pursuant to Section 2.2.

3.  PREEMPTIVE RIGHT.

         3.1. General. Each Holder and any party to whom such Holder's rights
under this Section 3.1 have been duly assigned in accordance with Section 4.1(b)
(each such Holder or assignee being hereinafter referred to as a "Rights
Holder") shall have the right of first refusal to purchase such Rights Holder's
Pro Rata Share (as defined below), of all (or any part) of any "New Securities"
(as defined in Section 3.2) that the Company may from time to time issue after
the date of this Agreement. A Rights Holder's "Pro Rata Share" for purposes of
this right of first refusal shall mean a fraction, the numerator of which is (a)
the number of Registrable Securities as to which such Rights Holder is the
Holder (or is deemed to be the Holder under Section 2.1(d)), and the denominator
of which is (b) the number of shares of common stock of the Company equal to the
sum of (i) the total number of shares of common stock of the Company then
outstanding plus (ii) the total number of shares of common stock of the Company
into which all then outstanding shares of Series A Stock of the Company are then
convertible plus (iii) the total number of shares of common stock of the Company
issuable upon the conversion of any other capital stock of the Company then
convertible and upon the exercise of any outstanding options, warrants or rights
issued by the Company.

         3.2. New Securities. "New Securities" shall mean any common stock or
preferred stock of the Company, whether now authorized or not, and rights,
options or warrants to purchase such common stock or preferred stock, and
securities of any type whatsoever that are, or may become, convertible or
exchangeable into such common stock or preferred Stock; provided, however, that
the term "New Securities" does not include:

                  (a) up to 4,200,000 shares of the Company's Common Stock (or
options or warrants therefore) issued to employees, officers, directors,
contractors, advisors or consultants of the Company pursuant to incentive
agreements or plans approved by the Board of Directors of the Company, and
including in such number all Warrant Securities (as defined below);

                  (b) any shares of Series A Stock issued under the Series A
Agreement, as such agreement may be amended;

                                       15

<PAGE>

                  (c) any securities issuable upon conversion of or with respect
to any then outstanding shares of Series A Stock of the Company or Common Stock
or other securities issuable upon conversion thereof;

                  (d) any securities issuable upon exercise of any options,
warrants or rights to purchase any securities of the Company outstanding on the
date of this Agreement ("Warrant Securities"), and any securities issuable upon
the conversion of any Warrant Securities;

                  (e) shares of the Company's Common Stock or Series A Stock
issued in connection with any stock split or stock dividend or similar event;

                  (f) securities offered by the Company to the public pursuant
to a registration statement filed under the Securities Act; or

                  (g) securities issued pursuant to the acquisition of another
corporation or entity by the Company by consolidation, merger, purchase of all
or substantially all of the assets, or other reorganization in which the Company
acquires, in a single transaction or series of related transactions, all or
substantially all of the assets of such other corporation or entity or fifty-one
percent (51%), or more of the voting power of such other corporation or entity
or fifty-one percent (51%), or more of the equity ownership of such other
entity, provided that, such acquisition was approved by (i) the Company's
Series A Director (as defined below) or (ii) by holders of a majority of the
outstanding shares of Series A Stock.

         3.3. Procedures. In the event that the Company proposes to undertake an
issuance of New Securities, it shall give to each Rights Holder written notice
of its intention to issue New Securities (the "Notice"), describing the type of
New Securities and the price and the general terms upon which the Company
proposes to issue such New Securities. Each Rights Holder shall have ten (10)
days from the date of mailing of any such Notice to agree in writing to purchase
such Rights Holder's Pro Rata Share of such New Securities for the price and
upon the general terms specified in the Notice by giving written notice to the
Company and stating therein the quantity of New Securities to be purchased (not
to exceed such Rights Holder's Pro Rata Share). If any Rights Holder fails to so
agree in writing within such ten (10) day period to purchase such Rights
Holder's full Pro Rata Share of an offering of New Securities (a "Nonpurchasing
Holder"), then such Nonpurchasing Holder shall forfeit the right hereunder to
purchase that part of his Pro Rata Share of such New Securities that he did not
so agree to purchase and the Company shall promptly give each Rights Holder who
has timely agreed to purchase his full Pro Rata Share of such offering of New
Securities (a "Purchasing Holder") written notice of the failure of any
Nonpurchasing Holder to purchase such Nonpurchasing Rights Holder's full Pro
Rata Share of such offering of New Securities (the "Overallotment Notice"). Each
Purchasing Holder shall have a right of overallotment such that such Purchasing
Holder may agree to purchase a portion of the Nonpurchasing Holders' unpurchased
Pro Rata Shares of such offering on a pro rata basis according to the relative
Pro Rata Shares of the Purchasing Rights Holders, at any time within five (5)
days after receiving the Overallotment Notice.

                                       16

<PAGE>

         3.4. Failure to Exercise. To the extent that the Rights Holders fail to
exercise in full the right of first refusal within such ten (10) plus five (5)
day period, then the Company shall have 120 days thereafter to sell the New
Securities with respect to which the Rights Holders' rights of first refusal
hereunder were not exercised, at a price and upon general terms not materially
more favorable to the purchasers thereof than specified in the Company's Notice
to the Rights Holders. In the event that the Company has not issued and sold the
New Securities within such 120 day period, then the Company shall not thereafter
issue or sell any New Securities without again first offering such New
Securities to the Rights Holders pursuant to this Section 3.4. If any Rights
Holder fails to exercise its right of first refusal with respect to any New
Securities in full (but not including any right of overallotment), and such New
Securities are either purchased by other Rights Holders or issued and sold in
full by the Company under the terms of this Section, such Rights Holder shall
have no further right of first refusal with respect to New Securities.

         3.5. Termination. This right of first refusal shall terminate (a) upon
consummation of a Qualifying IPO, or (b) upon a merger, consolidation or sale of
the stock or substantially all of the assets of the Company in which the
shareholders of the Company immediately prior to such transaction do not retain
a majority of voting power in the surviving entity( a "Change of Control
Event").

4.  ASSIGNMENT AND AMENDMENT.

         4.1. Assignment. Notwithstanding anything herein to the contrary:

                  (a) Information Rights. The rights of the Investor under
Section 1 hereof may be assigned only to (i) a Related Party (as defined below)
or (ii) a party who acquires from the Investor (or the Investor's permitted
assigns) at least ten percent (10%) of the Series A Stock or the equivalent
number (on an as-converted basis) of shares of Common Stock of the Company
issued upon the conversion of such shares of Series A Stock.

                  (b) Registration Rights; Preemptive Rights. The registration
rights of a Holder under Section 2 hereof and the preemptive rights of a Rights
Holder under Section 3 hereof may be assigned only to a party who acquires at
least ten percent (10%), of the Series A Stock or an equivalent number (on an
as-converted basis) of Registrable Securities issued upon conversion thereof;
provided, however, that no party may be assigned any of rights under Section 4.1
unless the Company is given written notice by the assigning party at the time of
such assignment stating the name and address of the assignee and identifying the
securities of the Company as to which the rights in question are being assigned;
and provided, further that any such assignee shall receive such assigned rights
subject to all the terms and conditions of this Agreement, including without
limitation the provisions of this Section 4.1.

         4.2. Amendment of Rights. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and Holders holding shares of Series A Stock or

                                       17

<PAGE>

Conversion Stock representing or convertible into a majority of all the
Investor's Shares (as defined below) as of the date of any proposed amendment.
As used herein, the term "Investor's Shares" shall mean the shares of Common
Stock then issuable upon conversion of all then outstanding shares of Series A
Stock issued under the Series A Agreement plus all then outstanding shares of
Conversion Stock that were issued upon the conversion of any shares of Series A
Stock issued under the Series A Agreement. Any amendment or waiver effected in
accordance with this Section 4.2 shall be binding upon the Investor, each
Holder, each permitted successor or assignee of the Investor or Holder and the
Company.

         4.3. Related Party. As used herein, the term "Related Party" with
respect to any Holder means (i) any person or entity that, directly or
indirectly, through one or more intermediaries, has voting control of, or is
under common voting control with, such Holder; or (ii) a trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners or owners
or persons or entities holding controlling interest of which consist of any
Holder and/or such other persons or entities referred to in the immediately
preceding clause (i); and (iii) any Holders' current partners, stockholders or
members as the case may be, pro rata in accordance with the current distribution
provision of such entities charter documents.

5.  COVENANTS OF THE COMPANY.

         5.1.  Board of Directors; Meetings.

                  (a) So long as the Investor or its assignee holds shares of
Series A Preferred Stock, the Company will use its best efforts to cause
promptly the election to its Board of Directors and maintenance in office two
(2) person designated by the Investor (the "Investor Director"). The Company
shall cause the Board of Directors to meet at least once every fiscal quarter.

                  (b) Special Voting Rights. The Company shall not, without the
approval, by vote or written consent, of the Investor Directors:

                           (i) amend its Certificate of Incorporation in any
manner that would alter or change any of the rights, preferences, privileges or
restrictions of the Series A Preferred Stock;

                           (ii) reclassify any outstanding shares of securities
of the Company into shares having rights, preferences or privileges senior to or
on parity with the Series A Preferred Stock;

                           (iii) authorize or issue any additional shares of
capital stock;

                           (iv) merge or consolidate with or into any
corporation;

                           (v) sell all or substantially all the Company's
assets in a single transaction or series of related transactions;

                                       18

<PAGE>

                           (vi) liquidate or dissolve;

                           (vii) declare or pay any dividends (other than
dividends payable solely in shares of Common Stock) on or declare or make any
other distribution (other than Permitted Repurchases), directly or indirectly,
on account of any shares of Common Stock now or hereafter outstanding;

                           (viii) redeem or repurchase any outstanding shares of
the Company's capital stock (other than Permitted Repurchases);

                           (ix) adopt any annual operating or capital budget or
approve any material modifications thereto;

                           (x) pay any bonuses to officers, directors or
employees of the Company not contemplated in an approved annual operating and
budgets;

                           (xi) award stock options, stock appreciation rights
or similar employee benefits or determine vesting schedules, exercise prices or
similar features; provided that the Company shall have the right to issue or
grant such stock options, stock appreciation rights or similar employee benefits
convertible into up to an aggregate of forty two percent (42%) of the shares of
Common Stock as of the date hereof (including the shares subject to such awards)
on a fully diluted basis;

                           (xii) pledge its assets or guarantee the obligations
of any other individual or entity;

                           (xiii) incur indebtedness (other than trade payables)
in excess of $1,000,000 in the aggregate, including (A) the execution of any
promissory note, loan agreement or other agreement evidencing indebtedness, (B)
drawing upon a line of credit or similar credit facility, or (C) causing a
letter of credit to be issued in the Company's name;

                           (xiv) amend the Company's Bylaws to alter any rights
of the Investor Director or the holders of the Series A Preferred Stock or to
increase the size of the Board to more than five (5) directors;

                           (xv) hire, retain or amend the compensation
arrangements with new executive officers of the Company or modify or extend any
existing arrangement with current executive officers of the Company; or

                           (xvi) enter into a new line of business unrelated to
its contemplated core business as of the date hereof.

                                       19

<PAGE>

         5.2. Minutes. The Company will deliver to the Investor copies of the
complete minutes of all meetings of the Company's Board of Directors (including
all committees thereof) and stockholders no later than the earlier of: (i)
thirty (30) days after any such meeting; or (ii) the next successive board or
stockholder meeting, as applicable.

         5.3. Additional Board Members. Any appointment or nomination of
additional directors, whether outside industry representatives or as a condition
of securing additional financing, must be acceptable to the Investor, such
approval not to be unreasonably withheld.

         5.4. Board Committees. The Investor shall have one (1) Investor
Director appointed to the audit and executive committees of the Board of
Directors.

         5.5. Bylaws. The Company shall at all times cause its By-laws to
provide that, (a) unless otherwise required by the laws of the State of
Delaware, the holders of at least fifty percent (50%) of the Series A Stock then
outstanding shall be entitled to call a special meeting of the Board of
Directors or stockholders of the Company and (b) the number of directors fixed
in accordance therewith shall in no event conflict with any of the terms or
provisions of the Series A Stock as set forth in the Series A Certificate. The
Company shall at all times maintain provisions in its Bylaws or Certificate of
Incorporation indemnifying all directors against liability and absolving all
directors from liability to the Company and its stockholders to the maximum
extent permitted under the laws of the State of Delaware. To the extent that
such coverage is available on commercially reasonable terms, the Company shall
purchase, and at all times maintain, directors and officers liability insurance
with coverage limits customary for similarly situated companies, but in no event
less than $2,000,000 per occurrence.

         5.6. Investor's Expenses. Following the Closing, any reasonable
expenses incurred by the Investor or its representatives on behalf of the
Company, including reasonable expenses associated with attendance at meetings of
the Board of Directors (other than observer expenses if the Investor no longer
has a representative elected to the Board), trade shows or similar meetings or
events, shall be borne by the Company.

         5.7. Subsidiaries or Joint Ventures. The Company will not, without the
prior approval of the Board of Directors, establish or invest in any subsidiary
or joint venture.

         5.8. Conduct of Business. The Company will duly observe and conform to
or cause to be observed or conformed to all valid requirements of all
governmental authorities relative to the conduct of the business of the Company
or to its properties or assets, the failure to observe or conform to which would
have a materially adverse effect on the business of the Company, and will
maintain and keep in full force and effect all licenses and permits necessary to
the proper conduct of the business of the Company.

         5.9. Preservation of Corporate Existence. The Company shall preserve
and maintain its respective corporate existence, rights, franchises and
privileges in its jurisdiction of incorporation,

                                       20

<PAGE>

and will qualify and remain qualified as a foreign corporation in every
jurisdiction in which such qualification is necessary in view of the business
and operations of the Company or the ownership of their respective properties.

         5.10. Performance Under Other Documents. The Company will promptly pay
or perform or cause to be performed all payments and obligations required of it
under the terms, agreements and covenants of the Series A Agreement, the Related
Agreements and the Series A Certificate.

         5.11. Performance of Obligations. The Company will promptly perform or
cause to be performed every commitment, undertaking, agreement or covenant of
the Company with any third person whether or not specifically referred to in
this Agreement, the non-performance of which could cause the acceleration of
indebtedness of the Company; provided, however, that (unless and until
foreclosure, sale or similar proceedings have been commenced) the Company shall
have the right in good faith to contest the obligation to perform any such
commitment, undertaking, agreement or covenant.

         5.12. Payment of Taxes and Accounts. The Company will pay or cause to
be paid all taxes, assessments, and governmental charges or levies imposed upon
the Company or upon its respective income, profits, or properties before the
same shall become delinquent; provided, however, that (unless and until
foreclosure, sale or similar proceedings have been commended) nothing herein
shall require the Company to pay or cause to be paid any such tax, assessment,
charge, levy or account so long as the validity thereof shall be contested in
good faith by appropriate proceedings and the Company has set aside on its books
and maintained adequate reserves with respect thereto.

         5.13. Maintenance of Property. The Company will maintain or cause to be
maintained the real and personal property which is required for the business of
the Company in good repair, working order and condition, and from time to time
will make or cause to be made all repairs, renewals, and replacements that are
necessary and proper.

         5.14. Insurance on Properties. Within a reasonable time from the date
hereof, the Company shall obtain and maintain or cause to be maintained
insurance with reputable insurance companies on such of the properties of the
Company in such amounts and against such risks as is deemed sufficient by the
Company's management and as is satisfactory to the Investor. The Company will
furnish to the Investor, upon request, certificates signed by the President or
the Chief Financial Officer of the Company setting forth a list of all insurance
in force on the properties of the Company and containing a general schedule of
property insured, risks insured against and amount of insurance then in force.

         5.15. Authorized Capital Stock. The Company covenants that it shall at
all times reserve and keep available out of its authorized but unissued Common
Stock, solely for the purpose of effecting the exercise of the Series A Stock,
such number of shares of Common Stock as shall from time to time be issuable
upon the exercise of all of the Series A Stock, as the case may be.

                                       21

<PAGE>

         5.16. Taxes and Costs. The Company shall pay all taxes which may be
imposed with respect to the issuance and delivery of shares of Common Stock upon
conversion of the Series A Stock; provided, however, that the Company shall not
be required, in any event, to pay any transfer or other taxes by reason of
issuance of such shares of Common Stock in a name or names other than the name
of the holder of the Series A Stock surrendered for exchange.

         5.17. Proprietary Assets. The Company shall take all steps reasonably
necessary to preserve and protect all of its intellectual property, including
without limitation all patents, copyrights, trade secrets, trademarks,
tradenames, and servicemarks used in its business.

         5.18. Guarantees. The Company shall not, without the prior approval of
the Board of Directors (including all Series A Directors) at any time become a
guarantor or surety of or pledge its credit on any undertaking of a third party.

         5.19 Liquidation and Dissolution. The Company will take no action to
place the Company or any subsidiary in dissolution, liquidation, or
receivership.

         5.20. New Businesses. The Company will not, without the prior approval
of the Board of Directors (including the Investor Director), directly or
indirectly, engage in any business other than the business in which it is
presently engaged.

         5.21. Fiscal Year and Accounting Methods. The Company will not change
its fiscal year or method of accounting (other than immaterial changes in
methods), except to the extent necessary to comply with generally accepted
accounting principles.

         5.22. Loans, Advances and Investments. The Company will not, without
the prior approval of the Board of Directors (including the Investor Director),
directly or indirectly, make any loan or advance to, or invest in, any person
who is a stockholder, director, or officer (or a relative of any such person) of
the Company, other than advances to employees for travel and other expenses
incurred in the ordinary course of business.

         5.23. Pension Reform Act. The Company will not permit (a) the funding
requirements under ERISA with respect to any employee benefit plan established
or maintained by the Company or any subsidiary to be less than the minimum
required by ERISA or the regulations thereunder, or (b) any employee benefit
plan established or maintained by the Company to be subject to involuntary
termination proceedings.

         5.24. Restrictive Assignments. The Company will not, without the prior
approval of the Board of Directors (including the Investor Director), enter into
or become obligated under any agreement or contract, including (without
limitation) any loan agreement, promissory note (or other evidence of
indebtedness), mortgage, security agreement, or lease, which either (a)
precludes or prevents the Investor from curing (on behalf of the Company)
defaults, breaches or failures to perform, or (b) by its terms prevents or

                                       22

<PAGE>

restricts the Company from performing its obligations under the Series A
Agreement.

         5.25. Termination. The covenants in this Section 5 shall terminate (a)
upon consummation of a Qualifying IPO, or (b) Change of Control Event.

         5.26. Professional Advisors. The Investor shall have the right to
approve (which shall not be unreasonably withheld or delayed) all of the
Company's professional advisors, including but not limited to, the Company's
accountants, attorneys, investment bankers and public relations consultants. The
Company agrees that KPMG Peat Marwick is hereby approved to provide any and all
accounting services.

6.  GENERAL PROVISIONS.

         6.1. Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid, as follows:
<TABLE>
<CAPTION>

<S>               <C>      <C>                       <C>
                  (a)      if to the Investor, at:   Net Value Holdings, Inc.
                                                     2 Penn Center Plaza
                                                     Suite 605
                                                     Philadelphia, PA 19103
                                                     Attention: President

                           with a copy (which shall not constitute notice hereunder) to:

                                                     Klehr, Harrison, Harvey, Branzburg & Ellers LLP
                                                     260 S. Broad Street
                                                     Philadelphia, PA 19102
                                                     Attention: Michael C. Forman, Esquire

                  (b)      if to the Company, at:    AlarmX.com, Inc.
                                                     1085 Mission
                                                     San Francisco, CA 94103
                                                     Attention: President
</TABLE>

Any party hereto (and such party's permitted assigns) may by notice so given
change its address for future notices hereunder. Notice shall conclusively be
deemed to have been given when personally delivered or when deposited in the
mail in the manner set forth above.

                                       23

<PAGE>

         6.2. Entire Agreement. This Agreement, together with all the Exhibits
hereto, constitutes and contains the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings, duties or
obligations between the parties respecting the subject matter hereof.

         6.3. Governing Law; Jurisdiction. This Agreement shall be governed by a
construed exclusively in accordance with the internal laws of the State of
Delaware, excluding that body of law relating to conflict of laws and choice of
law. The parties consent to the exclusive jurisdiction of either Delaware and
California in which to bring a cause of action.

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

         6.5. Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and assigns, any rights or remedies under or by reason of this
Agreement.

         6.6. Successors and Assigns. Subject to the provisions of Section 4.1,
the provisions of this Agreement shall inure to the benefit of, and shall be
binding upon, the successors and permitted assigns of the parties hereto.

         6.7. Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.

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

         6.9. Costs and Attorneys' Fees. In the event that any action, suit or
other proceeding is instituted concerning or arising out of this Agreement or
any transaction contemplated hereunder, the prevailing party shall recover all
of such party's costs and attorneys' fees incurred in each such action, suit or
other proceeding, including any and all appeals or petitions therefrom.

         6.10. Adjustments for Stock Splits, Etc. Wherever in this Agreement
there is a reference to a specific number of shares of Common Stock or Series A
Stock of the Company of any class or series, then, upon the occurrence of any
subdivision, combination or stock dividend of such class or series of stock, the
specific number of shares so referenced in this Agreement shall automatically be
proportionally adjusted to reflect the affect on the outstanding shares of such
class or series of stock by such subdivision, combination or stock dividend.

                                       24

<PAGE>

         6.11. Aggregation of Stock. All shares 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.

         IN WITNESS WHEREOF, the parties hereto have executed this Investor
Rights Agreement as of the date and year first above written.

THE COMPANY:                                   THE INVESTOR:
-----------                                    ------------

ALARMX.COM, INC.                               NET VALUE HOLDINGS, INC.,

         Delaware corporation

By:                                            By:
    --------------------------------              ------------------------------
       Allison Stollmeyer, President                 Andrew P. Panzo, Chairman

                                       25

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