Document:

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                                WAIVER AGREEMENT

         WAIVER AGREEMENT (the "AGREEMENT"), dated as of February 2, 2001, by
and between Worldwide Xceed Group, Inc. (f/k/a Xceed Inc.), a Delaware
corporation, with its principal place of business located at 233 Broadway, New
York, New York 10279, (the "COMPANY"), and the investor listed on the SCHEDULE
attached hereto (the "INVESTOR").

         WHEREAS:

         A.    The Company, the Investor and certain other entities (the "OTHER
INVESTORS") have entered into that certain Subscription Agreement, dated as of
January 13, 2000 (the "SUBSCRIPTION AGREEMENT"), pursuant to which the Investor
purchased from the Company shares of the Company's Series A Cumulative
Convertible Preferred Stock (the "PREFERRED SHARES") which are convertible into
shares (the "CONVERSION SHARES") of the Company's common stock, par value $0.01
per share (the "COMMON STOCK"), in accordance with the terms of the Company's
Certificate of Designation, Preferences and Rights of Series A Cumulative
Convertible Preferred Stock filed with the Secretary of State of the State of
Delaware on January 13, 2000 (the "CERTIFICATE OF DESIGNATION") and warrants
(the "OLD WARRANTS") to purchase shares of Common Stock.

         B.    On April 4, 2000, the Company issued additional warrants,
substantially in the form of the Old Warrants, to the Investor and the Other
Investors (the "ADDITIONAL WARRANTS" and, collectively with the Old Warrants,
the "WARRANTS");

         C.    The Company, the Investor and the Other Investors have entered
into that certain Registration Rights Agreement, dated as of January 13, 2000,
(the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company agreed to
provide certain registration rights under the Securities Act of 1933, as amended
(the "1933 ACT") and the rules and regulations promulgated thereunder; and

         D.    The Investor wishes to limit conversions under the Certificate of
Designations and to waive, upon the terms and conditions stated in this
Agreement, certain rights with respect to, and provisions of, the Certificate of
Designation, the Subscription Agreement and the Registration Rights Agreement.

         NOW THEREFORE, the Company and the Investor hereby agree as follows:

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1.       WAIVER

         1.1        WAIVER EFFECTIVENESS DATE. The effectiveness (the
               "EFFECTIVENESS") of the waivers, covenants, releases and other
               agreements in Sections 5 and 14 shall be on a date which is five
               (5) business days after the date hereof or such later date as may
               be mutually agreed to in writing by the Company and the Investor
               (the "EFFECTIVENESS DATE"); provided that all conditions
               precedent to the obligations of the Investor and the Company to
               the Effectiveness set forth herein shall have been satisfied or
               waived in writing. In addition, on the Effectiveness Date, the
               Investor shall deliver to the Company and the Company shall
               redeem all Warrants held by the Investor for cash in the
               aggregate equal to $1.00. Assuming that pursuant to the
               Subscription Agreement the Company issued the Investor the
               Warrants held by the Investor free and clear of any taxes,
               security interest, liens, encumbrances, claims and demands of any
               kind whatsoever, the Investor shall transfer such Warrants to the
               Company, free and clear of any restrictions on transfer, taxes,
               security interest, liens, encumbrances and demands of any kind
               whatsoever.

         1.2        CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY AT
               EFFECTIVENESS. The obligations of the Company in Sections 5 and
               14 are subject to the satisfaction at or before the Effectiveness
               of each of the conditions set forth below. Each of these
               conditions are for the Company's sole benefit and may be waived
               in writing by the Company with respect to the Investor at any
               time in its sole discretion.

               (a)  ACCURACY OF THE INVESTOR'S REPRESENTATIONS AND WARRANTIES.
                    The representations and warranties of the Investor shall be
                    true and correct in all material respects as of the date
                    when made and in all material respects as of the
                    Effectiveness Date as though made at each such time.

               (b)  PERFORMANCE BY THE INVESTOR. The Investor shall have
                    performed, satisfied and complied in all material respects
                    with all covenants, agreements and conditions required by
                    this Agreement to be performed, satisfied or complied with
                    by the Investor at or prior to the Effectiveness.

               (c)  NO INJUNCTION. No statute, rule, regulation, executive
                    order, decree, ruling or injunction shall have been enacted,
                    entered, promulgated or endorsed by any court or
                    governmental authority of competent jurisdiction which
                    prohibits or adversely affects any of the transactions
                    contemplated by this Agreement, and no proceeding shall have
                    been commenced which may have the effect of prohibiting or
                    adversely affecting any of the transactions contemplated
                    hereby and thereby.

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               (d)  WAIVER BY OTHER INVESTORS. Each of the Other Investors shall
                    have agreed to limit conversions and waive their rights with
                    respect to the Subscription Agreement, the Registration
                    Rights Agreement and the Certificate of Designations (the
                    "TRANSACTIONS DOCUMENTS") on terms substantially similar to
                    this Agreement.

               (e)  OFFICER'S CERTIFICATE. The Company shall have received a
                    certificate, executed by an authorized signatory of the
                    Investor, dated as of the Effectiveness Date, to the effect
                    that the conditions set forth in Sections 1.2(a) and 1.2(b)
                    above are satisfied.

         1.3        CONDITIONS PRECEDENT TO THE OBLIGATION OF THE INVESTOR AT
               EFFECTIVENESS. The obligations of the Investor in Section 14 are
               subject to the satisfaction at or before the Effectiveness of
               each of the conditions set forth below. Each of these conditions
               is for the Investor's sole benefit and may be waived in writing
               by the Investor at any time in its sole discretion.

               (a)  ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
                    The representations and warranties of the Company shall be
                    true and correct in all material respects as of the date
                    when made and in all material respects as of the
                    Effectiveness Date as though made at such time.

               (b)  PERFORMANCE BY THE COMPANY. The Company shall have
                    performed, satisfied and complied in all material respects
                    with all covenants, agreements and conditions required by
                    this Agreement to be performed, satisfied or complied with
                    by the Company at or prior to the Effectiveness.

               (c)  NO INJUNCTION. No statute, rule, regulation, executive
                    order, decree, ruling or injunction shall have been enacted,
                    entered, promulgated or endorsed by any court or
                    governmental authority of competent jurisdiction which
                    prohibits or adversely affects any of the transactions
                    contemplated by this Agreement, and no proceeding shall have
                    been commenced which may have the effect of prohibiting or
                    adversely affecting any of the transactions contemplated
                    hereby and thereby.

               (d)  LEGAL OPINION. The Company shall have delivered to the
                    Investor an opinion of Hale and Dorr LLP, counsel to the
                    Company, substantially in the form of EXHIBIT C annexed
                    hereto, dated the Effectiveness Date.

               (e)  OFFICER'S CERTIFICATE. The Investor shall have received a
                    certificate, executed by the Chief Executive Officer of the
                    Company, dated as of the Effectiveness Date, to the effect
                    that the conditions set forth in Sections 1.3(a) and 1.3(b)
                    above are satisfied.

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               (f)  RESERVATION OF SHARES. On or prior to the Effectiveness
                    Date, the Company shall have duly reserved a number of
                    Conversion Shares equal to the Maximum Conversion Share
                    Number (as defined in Section 4.1) to be reserved for
                    issuance upon conversion of the Preferred Shares.

               (g)  SECRETARY'S CERTIFICATE. The Company shall have delivered to
                    the Investor a certificate in form and substance reasonably
                    satisfactory to the Investor, executed by the secretary of
                    the Company, certifying as to the truth and accuracy of the
                    certificate of incorporation of the Company (the
                    "CERTIFICATE OF INCORPORATION"), as in effect on the
                    Effectiveness Date, the Bylaws of the Company, as in effect
                    on the Effectiveness Date, and the resolutions duly adopted
                    by the Board of Directors authorizing and approving the
                    execution and delivery of this Agreement and the
                    consummation of the transactions contemplated hereby.

               (h)  GOOD STANDING. On or prior to the Effectiveness Date, the
                    Company shall have delivered to the Investor a long-form
                    certificate of good standing and tax status of the Company,
                    certified as of a recent date by the Secretary of State of
                    the State of Delaware.

2.       REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

         The Investor represents and warrants to the Company that:

         2.1        AUTHORITY. This Agreement has been duly authorized and
               validly executed and delivered by the Investor and is a legal,
               valid and binding obligation of the Investor, enforceable against
               the Investor in accordance with its terms, except as such
               enforceability may be limited by applicable bankruptcy,
               insolvency, or similar laws relating to, or affecting generally
               the enforcement of, creditors' rights and remedies or by other
               equitable principles of general application.

         2.2        NO BROKERS. The Investor has taken no action which would
               give rise to any claim by any person for brokerage commissions,
               finder's fees or similar payments by the Company relating to this
               Agreement or the transactions contemplated hereby.

         2.3        OWNERSHIP OF PREFERRED SHARES AND WARRANTS. The Investor is
               the sole record and beneficial owner of the number of Preferred
               Shares and Warrants set forth opposite the Investor's name on the
               Schedule.

3.       REPRESENTATIONS AND WARRANTIES OF COMPANY

         The Company represents and warrants to the Investor that:

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         3.1        EXCHANGE ACT FILINGS. The Company has registered its Common
               Stock pursuant to Section 12(b) or 12(g) of the Exchange Act and
               is in full compliance with all reporting requirements of the
               Exchange Act.

         3.2        VALID ISSUANCE OF CAPITAL STOCK.

               (a)  The Company has an authorized capitalization consisting of
                    100,000,000 shares of Common Stock and 1,000,000 shares of
                    preferred stock, par value $0.05 per share. The Company has
                    issued and outstanding on the date hereof 48,299,054 shares
                    of Common Stock, of which 20,000 shares are held in
                    treasury, and 23,115 shares of Series A Preferred Stock. As
                    of the date hereof, the Company has outstanding the
                    following securities convertible into (other than its Series
                    A Preferred Stock) or exercisable or exchangeable for Common
                    Stock (the "DERIVATIVE SECURITIES"): (i) options to purchase
                    8,204,861 shares of Common Stock; and (ii) other than the
                    Warrants, warrants to purchase 4,726,562 shares of Common
                    Stock.

               (b)  All of the issued shares of capital stock of the Company
                    have been duly and validly authorized and issued and are
                    fully paid and non-assessable. Upon conversion of the
                    Preferred Shares, in accordance with its terms, the
                    Conversion Shares will be validly issued, fully paid and
                    nonassessable and free from all taxes, liens and charges
                    with respect to the issuance thereof, with the holders
                    thereof being entitled to all rights accorded to holders of
                    Common Stock. The holders of outstanding shares of capital
                    stock of the Company are not and shall not be entitled to
                    preemptive or other rights afforded by the Company to
                    subscribe for the capital stock or other securities of the
                    Company as a result of the issuance of Conversion Shares
                    upon the conversion or exercise thereof.

               (c)  Other than as set forth in Section 3.2(a) and options and
                    shares that may be issued pursuant to the Company's stock
                    option plans as in effect on the date hereof: (i) no shares
                    of the Company's capital stock are subject to preemptive
                    rights or any other similar rights or any liens or
                    encumbrances created or imposed by the Company other than
                    issued and outstanding shares of Common Stock held in escrow
                    in connection with the Company's acquisition of each of
                    Catalyst Consulting Services, Inc., Distributed Systems
                    Solutions, Inc. and Big Theory LLC ; (ii) there are no
                    outstanding debt securities issued by the Company which are
                    convertible into Common Stock; (iii) there are no
                    outstanding options, warrants, scrip, rights to subscribe
                    to, calls or commitments of any character whatsoever
                    relating to, or securities or rights convertible into, any
                    shares of capital

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                    stock of the Company (or any subsidiary of the Company (each
                    hereinafter referred to as a "SUBSIDIARY" and collectively,
                    the "SUBSIDIARIES"), or contracts, commitments,
                    understandings or arrangements by which the Company or any
                    Subsidiary is or may become bound to issue additional shares
                    of capital stock of the Company or any Subsidiary or
                    options, warrants, scrip, rights to subscribe to, calls or
                    commitments of any character whatsoever relating to, or
                    securities or rights convertible into, any shares of capital
                    stock of the Company or any Subsidiary other than shares
                    that may be issuable in connection with the acquisition of
                    the Company's subsidiary, Pulse Interactive B.V., based on
                    financial performance; (iv) there are no agreements or
                    arrangements under which the Company (or any Subsidiary) has
                    any outstanding obligation to register the sale of any of
                    their securities under the 1933 Act (except the Registration
                    Rights Agreement, the registration rights agreement among
                    the Company and certain shareholders of Zabit & Associates,
                    Inc., the Subscription Agreement between the Company and
                    Spherion Corporation dated as of April 27, 2000, the Warrant
                    Agreement between the Company and Spherion Corporation dated
                    as of November 15, 2000, the Warrant issued to Hilton Hotels
                    Corporation dated as of October 6, 2000 and pursuant to
                    certain employee stock option agreements); (v) there are no
                    outstanding securities of the Company or any Subsidiary
                    which contain any redemption or similar provisions, and
                    there are no contracts, commitments, understandings or
                    arrangements by which the Company or any Subsidiary is or
                    may become bound to redeem a security of the Company or any
                    Subsidiary; (vi) there are no securities or instruments
                    containing anti-dilution or similar provisions that will be
                    triggered by the issuance of the Conversion Shares as
                    described in this Agreement; and (vii) the Company does not
                    have any stock appreciation rights or "phantom stock" plans
                    or agreements or any similar plan or agreement.

               (d)  All of the authorized shares of capital stock of each
                    Subsidiary are owned by the Company, free and clear of any
                    lien, charge, security interest, encumbrance, adverse claim
                    or other restriction, and all the issued and outstanding
                    shares of capital stock of the Subsidiaries are validly
                    issued and are fully paid, non-assessable and free of
                    preemptive and similar rights. Except as otherwise set forth
                    in this Section 3.3 hereto, there are no outstanding
                    agreements or commitments requiring the Company or any
                    Subsidiary to issue capital stock or Derivative Securities.

         3.3        ORGANIZATION 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 the requisite corporate
               power to own its properties and assets and to carry on its
               business as now being conducted. Each Subsidiary is a

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               corporation duly organized, validly existing and in good standing
               under the laws of its respective state of organization, with the
               requisite corporate power to own its properties and assets and to
               carry on its business as now being conducted. The Company and
               each Subsidiary is duly qualified as a foreign corporation to do
               business and is in good standing in every jurisdiction in which
               the nature of the business conducted or property owned by it
               makes such qualification necessary other than those jurisdictions
               in which the failure so to qualify would not have a Material
               Adverse Effect. "MATERIAL ADVERSE EFFECT" means any material
               adverse effect on the business, operations, properties, cash
               flows, prospects or condition (financial or otherwise) of the
               Company and the Subsidiaries taken as a whole and any condition
               or situation which would prohibit or otherwise materially
               adversely interfere with the ability of the Company to enter into
               and perform its obligations under the Transaction Documents.

         3.4        AUTHORIZATION; ENFORCEMENT. (a) The Company has the
               requisite corporate power and authority to enter into and perform
               this Agreement, to issue the Conversion Shares in accordance with
               the terms hereof and to perform its obligations under the
               Certificate of Designation and its Certificate of Incorporation;
               (b) the execution and delivery of this Agreement and the
               consummation by the Company of the transactions contemplated
               hereby have been duly authorized by all necessary corporate
               action, and no further consent or authorization of the Company or
               its Board of Directors or stockholders is required; (c) this
               Agreement has been duly executed and delivered by the Company;
               and (d) this Agreement constitutes legal, valid and binding
               obligations of the Company enforceable against the Company in
               accordance with its terms.

         3.5        NO BROKERS. The Company has not taken any action which would
               give rise to a claim by any person for brokerage commissions,
               finder's fees or similar payments by the Investor relating to
               this Agreement or the transactions contemplated hereby.

         3.6        NO CONFLICTS. The execution, delivery and performance of
               this Agreement and consummation of the transactions contemplated
               hereby (including the conversion of the Preferred Shares and the
               issuance of the Conversion Shares upon conversion of the
               Preferred Shares) do not and will not: (i) result in a violation
               of the Certificate of Incorporation, as in effect on the date
               hereof, and the Company's Bylaws, as in effect on the date hereof
               (the Certificate of Incorporation and the Company's Bylaws are
               collectively referred to herein as the "CHARTER DOCUMENTS"); or
               (ii) result in the creation of any lien, charge, security
               interest or encumbrance upon any of the assets of the Company or
               any Subsidiary pursuant to the terms or provisions of or,
               conflict with, or constitute a default (or an event which with
               notice or lapse of time or both would become a default) under, or
               give to others any rights of termination, amendment, acceleration
               or

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               cancellation of, any agreement, indenture, credit facility or
               instrument to which the Company or any Subsidiary is a party, or
               result in a violation of any federal, state, local or foreign
               law, rule, regulation, order, judgment or decree (including
               federal and state securities laws and regulations) applicable to
               the Company or any Subsidiary or by which any property or asset
               of the Company or any Subsidiary is bound or affected, except, in
               the case of clause (ii) for such conflicts, defaults,
               terminations, amendments, accelerations, cancellations and
               violations as would not, individually or in the aggregate, have a
               Material Adverse Effect. The Company is not required under
               federal, state or local law, rule or regulation in the United
               States to obtain any consent, authorization or order of, or make
               any filing or registration with, any court or governmental or
               self-regulatory agency in order for it to execute, deliver or
               perform any of its obligations under this Agreement in accordance
               with the terms hereof .

         3.7        EXCHANGE ACT REPORTS. The Company has filed all reports
               required to be filed by it under the Exchange Act, including
               pursuant to Section 13(a) or 15(d) thereof, since August 31, 1995
               (the foregoing materials being collectively referred to herein as
               the "EXCHANGE ACT REPORTS"). Except for this Agreement and
               similar transactions between the Company and the Other Investors,
               which information will be publicly disclosed by the Company on or
               before 8:30 a.m. Eastern Time, on the second business day
               following the date of execution of this Agreement, but not later
               than the Company's first public announcement of the execution of
               this Agreement or the transactions contemplated by this
               Agreement, by means of the filing of a Form 8-K pursuant to
               Section 5.3 hereof, the Company has not provided to the Investor
               any information which, according to applicable law, rule or
               regulation, should have been disclosed publicly by the Company
               but which has not been so disclosed. As of their respective
               dates, the Exchange Act Reports complied in all material respects
               with the requirements of the Exchange Act and the rules and
               regulations of the SEC promulgated thereunder and other
               applicable federal, state and local laws, rules and regulations,
               and none of the Exchange Act Reports contained any untrue
               statement of a material fact or omitted to state a material fact
               required to be stated therein or necessary in order to make the
               statements therein, in light of the circumstances under which
               they were made, not misleading. The Company has filed (including
               filing such documents by incorporation by reference) all
               agreements or documents to which the Company is a party that are
               required to be filed as exhibits to the Exchange Act Reports.

         3.8        EFFECTIVENESS OF SEC FILINGS. The SEC has not issued any
               stop order or other order suspending the effectiveness of any
               registration statement filed by the Company or the Subsidiary
               under the Exchange Act or the 1933 Act.

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         3.9        COMPLIANCE WITH INSTRUMENTS, ETC. The Company (or the manner
               in which it conducts its business) is not in breach or violation
               of, or in default under, any term or provision of its Charter
               Documents.

4.       COVENANTS OF THE INVESTOR

         4.1        CONVERSION OF PREFERRED SHARES. The Investor shall not
               submit conversion notices for, and the Company shall not have the
               obligation to issue shares of Common Stock for the conversion of,
               Preferred Shares in excess of that number of Preferred Shares
               which, in the aggregate, would result in the issuance of more
               than 7,900,000 shares of Common Stock (the "MAXIMUM CONVERSION
               SHARE NUMBER"); provided, however, that this limitation shall not
               apply in the event that the Effectiveness shall not have occurred
               on or before the date which is five (5) business days after the
               date of this Agreement (or such later date as mutually agreed in
               writing by the Company and the Investor). The Investor shall not
               transfer any of the Preferred Shares or Warrants or any rights in
               the Preferred Shares or Warrants to any person or entity unless
               such transferee shall first have agreed in writing to be bound by
               the provisions of this Agreement as if such transferee were a
               party hereto and any assignment in violation of this sentence
               shall be null and void; provided, however, that this limitation
               shall not apply in the event that the Effectiveness shall not
               have occurred on or before the date which is five (5) business
               days after the date of this Agreement (or such later date as
               mutually agreed in writing by the Company and the Investor). If
               the Company shall at any time subdivide or combine (by stock
               split, stock dividend, recapitalization or otherwise) its
               outstanding shares of Common Stock into a greater or lesser
               number of shares, the Maximum Conversion Share Number in effect
               immediately prior to such subdivision or combination shall be
               proportionately adjusted to reflect such subdivision or
               combination, as the case may be. Upon delivery by the Company to
               the Investor of an aggregate number of shares of Common Stock
               equal to the Maximum Conversion Price upon conversion of
               Preferred Shares by the Investor after the date of this Agreement
               and if the Effectiveness has occurred on or before the date which
               is five (5) business days after the date of this Agreement (or
               such later date as mutually agreed in writing by the Company and
               the Investor), the Investor shall promptly deliver to the Company
               all stock certificates representing the remaining Preferred
               Shares (the "REMAINING PREFERRED SHARES"). Assuming that pursuant
               to the Subscription Agreement the Company issued the Investor the
               Remaining Preferred Shares held by the Investor free and clear of
               any taxes, security interest, liens, encumbrances, claims or
               demands of any kind whatsoever, at the time the Remaining
               Preferred Shares are delivered to the Company pursuant to this
               Section 4.1, the Investor shall hold the Remaining Preferred
               Shares, and shall transfer such Remaining Preferred Shares, duly
               endorsed in blank, to the

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               Company, free and clear of any restrictions on transfer, taxes,
               security interest, liens, encumbrances and demands of any kind
               whatsoever.

5.       COVENANTS OF THE COMPANY

         5.1        EXCHANGE ACT REGISTRATION. The Company will use its best
               efforts: (a) to cause its Common Stock to continue to be
               registered under Section 12(b) or 12(g) of the Exchange Act; (b)
               to comply in all material respects with its reporting and filing
               obligations under the Exchange Act; and (c) not to take any
               action or file any document (whether or not permitted by the
               Exchange Act or the rules and regulations thereunder) to
               terminate or suspend such registration or to terminate or suspend
               its reporting and filing obligations under the Exchange Act.

         5.2        FILING OF CURRENT REPORT ON FORM 8-K. On or before
               8:30 a.m., Eastern Time, on the second business day following the
               date of execution of this Agreement, but not later than the
               Company's first public announcement of the execution of this
               Agreement or the transactions contemplated by this Agreement, the
               Company shall file with the SEC a Current Report on Form 8-K in a
               form reasonably acceptable to the Investor describing the terms
               of this Agreement, including, without limitation, by including as
               exhibits to such Form 8-K this Agreement. In addition, on or
               before 8:30 a.m., Eastern Time, on the second business day
               following the Effectiveness Date, but not later than the
               Company's first public announcement thereof, the Company shall
               file with the SEC a Current Report on Form 8-K in a form
               reasonably acceptable to the Investor describing the terms of the
               transaction consummated at the Effectiveness or that the
               Effectiveness did not occur, as the case may be.

6.       PAYMENT SET ASIDE

         To the extent that the Company makes a payment or payments to the
Investor hereunder or pursuant to the Subscription Agreement, Registration
Rights Agreement or the Certificate of Designation or the Investor enforces or
exercises its rights hereunder or thereunder, and such payment or payments or
the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action) by the court of competent jurisdiction in a
final non-appealable judgment, then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force or effect as if such payment had not been made or
such enforcement or set-off had not occurred.

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7.       WAIVER OF CERTAIN RIGHTS UNDER THE REGISTRATION RIGHTS AGREEMENT

         Provided that the Effectiveness Date occurs on or before the date which
is five (5) business days after the date of this Agreement (or such later date
as may be mutually agreed in writing by the Company and the Investor), the
Investor waives any right it may have (i) to receive any payments pursuant to
Section 2(c) of the Registration Rights Agreement and (ii) to receive a
reduction in the Conversion Price (as defined in the Certificate of
Designations) of the Preferred Shares in the event of an Excess Blocking Period
(as defined in the Registration Rights Agreement) pursuant to Section 5A(b) of
the Registration Rights Agreement. Notwithstanding the foregoing, the waiver
contained in this Section 7 shall be void and of no further force or effect on
or after the first date after the Effectiveness Date on which there occurs a
Conversion Default (as defined below).

         For purposes of this Agreement, a "CONVERSION DEFAULT" shall be deemed
to have occurred in the event that the Company (1) notifies the Investor
directly in writing or pursuant to a public disclosure, including but not
limited to a press release, that the Company cannot or does not intent to issue
shares of Common Stock upon conversion of the Preferred Shares tendered in
accordance with the Certificate of Designation; or (2) fails to issue shares of
Common Stock for any reason to the Investor prior to the tenth (10th) business
day after the date of receipt by the Company of a Conversion Notice (as defined
in the Certificate of Designation) delivered by the Investor in accordance with
the Series A Certificate of Incorporation or, in the case of a Merger Conversion
Election Conversion pursuant to Section 10 on the Merger Transaction Closing
Date, including, without limitation, because the Company (x) does not have a
sufficient number of shares of Common Stock or other securities authorized and
available or (y) is otherwise prohibited by applicable law or by the rules and
regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization with jurisdiction over the Company or its
securities from issuing all of the Common Stock which is to be issued to the
Investor.

8.       WAIVER OF CERTAIN RIGHTS UNDER THE CERTIFICATE OF DESIGNATIONS

         8.1        RIGHTS TO DIVIDENDS AND OTHER DISTRIBUTIONS. Provided that
               the Effectiveness Date occurs on or before the date which is five
               (5) business days after the date of this Agreement (or such later
               date as may be mutually agreed in writing by the Company and the
               Investor), the Investor agrees to waive its right (a) to receive
               dividends on the Preferred Shares pursuant to Section 2 of the
               Certificate of Designation and (b) to any adjustment for
               dividends and other distributions pursuant to Section 9(c) of the
               Certificate of Designation; provided, however, that the Investor
               who holds Preferred Shares shall be entitled to any dividends or
               other distributions by the Company to the same extent as if the
               Investor had converted its Preferred Shares into Common Stock
               (except as may be limited by Section 4.1) on the record date for
               such dividend or other distribution, and payments thereof shall
               be made concurrently with the dividend or other

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               distribution to the holders of Common Stock. Notwithstanding the
               foregoing, the waiver contained in this Section 8.1 shall be void
               and of no further force or effect on and after the first day
               after the Effectiveness Date on which there occurs a Conversion
               Default.

         8.2        RIGHTS TO PREVENT THE ISSUANCE OF PARITY SECURITIES.
               Provided that the Effectiveness Date occurs on or before the date
               which is five (5) business days after the date of this Agreement
               (or such later date as may be mutually agreed in writing by the
               Company and the Investor), the Investor agrees to waive its right
               to prevent the issuance of (a) any Parity Securities (as defined
               in the Certificate of Designations) or (b) any capital stock that
               ranks senior to the Preferred Shares in respect of dividends,
               each as provided in clause (iii) of Section 3(b) of the
               Certificate of Designation. Notwithstanding the foregoing, the
               waiver contained in this Section 8.2 shall be void and of no
               further force or effect on or after the first date after the
               Effectiveness Date on which there occurs a Conversion Default.

         8.3        RIGHTS TO REDEMPTION UPON AN EXTRAORDINARY TRANSACTION.
               Provided that the Effectiveness Date occurs on or before the date
               which is five (5) business days after the date of this Agreement
               (or such later date as may be mutually agreed in writing by the
               Company and the Investor), the Investor agrees not to exercise
               its right to (a) redeem the Preferred Shares pursuant to Section
               5(a) of the Certificate of Designation as of the effective date
               of an Extraordinary Transaction (as defined in Section 4 of the
               Certificate of Designation), except with respect to an
               Extraordinary Transaction described in clause (i) of Section 4 of
               the Certificate of Designation or (b) an adjustment of the
               Ceiling Price (as defined in the Certificate of Designation)
               pursuant to clause (iii) of Section 5(d) of the Certificate of
               Designation; provided, however, that the Investor shall not have
               the right to require the redemption of the Preferred Shares if,
               with respect to such Extraordinary Transaction, the Company has
               delivered a Notice of Merger Conversion in accordance with
               Section 10 and complies with its obligations under Section 10.
               Notwithstanding the foregoing, the waiver contained in this
               Section 8.3 shall be void and of no further force or effect on
               and after the first date after the Effectiveness Date on which
               there occurs a Conversion Default.

         8.4        RIGHTS TO ADJUSTMENT UPON THE ISSUANCE OF DERIVATIVE
               SECURITIES. Provided that the Effectiveness Date occurs on or
               before the date which is five (5) business days after the date of
               this Agreement (or such later date as may be mutually agreed in
               writing by the Company and the Investor), the Investor agrees not
               to exercise its right to adjust the Conversion Period or
               Conversion Price (each as defined in the Certificate of
               Designation) of the Preferred Shares upon the issuance of
               Derivative Securities (as defined in the Certificate of
               Designation), as set forth in Section 9(c) of the Certificate of
               Designation. Notwithstanding the foregoing, the waiver contained
               in this Section 8.4 shall be void and of no further

                                       12

<PAGE>

               force or effect on and after the first date after the
               Effectiveness Date on which there occurs a Conversion Default.

         8.5        RIGHTS TO PENALTIES UNDER SECTION 11 OF THE CERTIFICATE OF
               DESIGNATION. Provided that the Effectiveness Date occurs on or
               before the date which is five (5) business days after the date of
               this Agreement (or such later date as may be mutually agreed in
               writing by the Company and the Investor), the Investor agrees not
               to exercise its right to redeem its Preferred Shares or receive
               penalties pursuant to Section 11(c) or Section 11(d) of the
               Certificate of Designation. Notwithstanding the foregoing, the
               waiver contained in the immediate preceding sentence of this
               Section 8.5 shall be void and of no further force or effect on
               and after the first date after the Effectiveness Date on which
               there occurs a Conversion Default. Provided that the
               Effectiveness Date occurs on or before the date which is five (5)
               business days after the date of this Agreement (or such later
               date as may be mutually agreed in writing by the Company and the
               Investor), the Company waives the Investor's compliance with the
               last sentence of Section 11(b) of the Certificate of Designation.

         8.6        RIGHTS TO EXTEND THE MATURITY DATE UPON SUSPENSION OF
               REGISTRATION STATEMENT. Provided that the Effectiveness Date
               occurs on or before the date which is five (5) business days
               after the date of this Agreement (or such later date as may be
               mutually agreed in writing by the Company and the Investor), the
               Investor agrees not to exercise its right to extend the Maturity
               Date (as defined in the Certificate of Designation) of the
               Preferred Shares as provided in Section 17 of the Certificate of
               Designation. Notwithstanding the foregoing, the waiver contained
               in this Section 8.6 shall be void and of no further force or
               effect on and after the first date after the Effectiveness Date
               on which there occurs a Conversion Default.

         8.7        RIGHT UPON A TRIGGERING EVENT. Provided that the
               Effectiveness Date occurs on or before the date which is five (5)
               business days after the date of this Agreement (or such later
               date as may be mutually agreed in writing by the Company and the
               Investor), the Investor (i) agrees not to exercise its right to
               redeem its Preferred Shares pursuant to Section 5(b) upon the
               occurrence of a Triggering Event (as defined in the Certificate
               of Designation), except with respect to a Triggering Event
               described in clause (c) or clause (e) of the definition of
               "Triggering Event" in Section 19 of the Certificate of
               Designation with respect to which the Investor has complied with
               Section 4.1 of this Agreement, and (ii) waives its right to
               receive any adjustment pursuant to the last sentence of Section
               5(b) of the Certificate of Designation. Notwithstanding the
               foregoing, the waiver contained this Section 8.7 shall be void
               and of no further force or effect on and after the first date
               after the Effectiveness Date on which there occurs a Conversion
               Default.

                                       13

<PAGE>

         8.8        RIGHT TO REQUEST ISSUANCE OF SHARES IN ELECTRONIC
               FORMAT (I.E., DWAC). Provided that the Effectiveness Date occurs
               on or before the date which is five (5) business days after the
               date of this Agreement (or such later date as may be mutually
               agreed in writing by the Company and the Investor), the Investor
               agrees to waive its right to request that shares be issued in
               electronic format (i.e., DWAC) upon the conversion of Preferred
               Shares in the event that the Company's transfer agent does not
               offer or does not promptly make available service for such
               electronic delivery of shares. If the Investor requests that the
               Company cause shares to be issued in electronic format (i.e.,
               DWAC), then the delivery of the Conversion Notice (as defined in
               the Certificate of Designation) shall be deemed to be a
               representation by the Investor that it has complied with Section
               4.1. Notwithstanding the foregoing, the waiver contained in this
               Section 8.8 shall be void and of no further force or effect on
               and after the first date after the Effectiveness Date on which
               there occurs a Conversion Default

9.       WAIVER OF CERTAIN RIGHTS UNDER THE SUBSCRIPTION AGREEMENT

         Provided that the Effectiveness Date occurs on or before the date which
is five (5) business days after the date of this Agreement (or such later date
as may be mutually agreed in writing by the Company and the Investor), the
Investor (i) agrees not to exercise its right to prevent the Company from
declaring a dividend or other distribution as provided in Section 5.10 of the
Subscription Agreement , (ii) agrees to waive the Company's compliance with
Sections 5.1 and 5.2 of the Subscription Agreement , but solely with respect to
the number of shares in excess of the number of shares of Common Stock the
Investor is entitled to receive upon conversion of the Preferred Shares in
accordance with Section 4.1 of this Agreement, and (iii) agrees to waive the
Company's compliance with Sections 5.5 and 5.9 of the Subscription Agreement.
Notwithstanding the foregoing, the waiver contained in this Section 9 shall be
void and of no further force or effect on and after the first date after the
Effectiveness Date on which there occurs a Conversion Default.

10.      AGREEMENT WITH RESPECT TO MANDATORY CONVERSION OF THE PREFERRED SHARES

         ACCELERATION OF MANDATORY CONVERSION UPON MERGER TRANSACTION COMPANY'S
OPTION. Provided that the Effectiveness Date has occurred on or prior to the
date which is five (5) business days after the date of this Agreement (or such
later date as may be mutually agreed in writing by the Company and the
Investor), at any time on or after the date the Company discloses a pending,
proposed or intended Merger Transaction (as defined below), the Company shall
have the right, in its sole discretion, to require that the Investor convert its
Preferred Shares up to the limitation set forth in Section 4.1 ("MERGER
CONVERSION ELECTION"); provided that the Conditions to Merger Conversion (set
forth below) are satisfied or waived by the Investor. The Company shall exercise
its right to make a Merger Conversion Election by providing the

                                       14

<PAGE>

Investor written notice ("NOTICE OF MERGER Conversion") by facsimile and
overnight courier, after the public disclosure of such proposed, pending or
intended Merger Transaction and at least 25 trading days prior to the date of
consummation of the Merger Transaction ("MERGER TRANSACTION CLOSING DATE"). The
Notice of Merger Conversion shall state the anticipated Merger Transaction
Closing Date. If the Company makes a Merger Conversion Election in compliance
with this Section 10.1 and the Conditions to Merger Conversion are satisfied or
waived by the Investor, except to the extent restricted by Section 15 of the
Certificate of Designation or Section 4.1 of this Agreement, on the Merger
Transaction Closing Date the Investor will be deemed to have submitted a
Conversion Notice (as defined in the Certificate of Designation) in accordance
with Section 6 of the Certificate of Designation for a number of Preferred
Shares equal to the lesser of (I) all the Preferred Shares held by the Investor
which remain outstanding on such date, and (II) the maximum number of Preferred
Shares which such holder could convert on the Merger Transaction Closing Date
taking into account the restrictions in Section 15 of the Certificate of
Designation and Section 4.1 of this Agreement. The Investor shall promptly after
the Merger Transaction Closing Date surrender all stock certificates
representing the Preferred Shares, duly endorsed for cancellation, to the
Company. If the Company fails to provide Conversion Shares with respect to any
Preferred Shares in accordance with Section 6 of the Certificate of Designation,
then the Merger Conversion Election shall be null and void with respect to such
Preferred Shares and the holder of such Preferred Shares shall be entitled to
all the rights of a holder of outstanding Preferred Shares set forth in this
Certificate of Designations. "CONDITIONS TO MERGER CONVERSION" shall mean the
following conditions: (i) on each day during the period beginning on and
including the date the Company delivers a Notice of Merger Conversion and ending
on and including the Merger Transaction Closing Date, the Registration Statement
(as defined in each Registration Rights Agreement) is effective and available
for the sale of all the Registrable Securities (as defined in each Registration
Rights Agreement) (subject to the limitation in Section 4.1 of this Agreement)
or all the shares of Common Stock issuable upon conversion of the Preferred
Shares (subject to the limitation in Section 4.1 of this Agreement) then
outstanding are immediately available for resale by the Investor pursuant to
Rule 144(k) under the 1933 Act; (ii) during the period beginning on the date on
which the Company delivers a Notice of Merger Conversion and ending on and
including the Merger Transaction Closing Date, there shall not have occurred an
event constituting a Conversion Default; (iii) during the period beginning on
the date on which the Company delivers a Notice of Merger Conversion and ending
on and including the Merger Transaction Closing Date, the Company shall have
delivered the required number of shares of Common Stock (as set forth in Section
6 of the Certificate of Designation) upon conversion of Preferred Shares
(subject to the limitation set forth in Section 4.1 of this Agreement) to the
Investor within five (5) business days after the Company's receipt of any
Conversion Notice and, if required by Section 6(b)(iii) of the Certificate of
Designation, certificate(s) evidencing the Preferred Shares being converted, or
after receipt of the affidavit, agreement and indemnification as set forth in
Section 17 of the Certificate of Designation; (iv) the Company shall have
delivered notice of the conversion to the Other Investors of their Preferred
Shares on terms and conditions substantially similar to those contained in this
Section 10; and (v) the Company has satisfied all conditions to the conversions
with the Other Investors as set forth in the Company's agreements

                                       15

<PAGE>

with such Other Investors, which are substantially similar to the conditions in
this Section 10. Notwithstanding the above, the Investor may convert its
Preferred Shares (including Preferred Shares selected for conversion), subject
to the limitation set forth in Section 4.1 of this Agreement, into Common Stock
pursuant to Section 6 of the Certificate of Designation on or prior to the date
immediately preceding the Merger Transaction Closing Date. For purposes of this
agreement "MERGER TRANSACTION" shall mean any merger, consolidation or other
business combination of the Company, with or into any other corporation, entity
or person (whether or not the Company is the surviving corporation) or there
occurs any other corporate reorganization or transaction or series of related
transactions, and as a result thereof the shareholders of the Company pursuant
to such merger, consolidation, reorganization or other transaction own in the
aggregate less than 50% of the voting power and common equity of the ultimate
parent corporation or other entity surviving or resulting from such merger,
consolidation, reorganization or other transaction.

11.      GOVERNING LAW; JURISDICTION

         This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, without regard to principles
of conflicts of law or choice of law, except for matters arising under the 1933
Act or the Exchange Act which matters shall be construed and interpreted in
accordance with such laws. Each of the Company and the Investor hereby agrees
that all actions or proceedings arising directly or indirectly from or in
connection with this Agreement shall be litigated only in the state or federal
courts located in the City of Wilmington, County of New Castle, State of
Delaware. The Company and the Investor consents to the jurisdiction and venue of
the foregoing courts and consent that any process or notice of motion or other
application to either of said courts or a judge thereof may be served inside or
outside the State of Delaware by registered mail, return receipt requested,
directed to the such party at its address set forth in this Agreement (and
service so made shall be deemed complete five (5) days after the same has been
posted as aforesaid) or by personal service or in such other manner as may be
permissible under the rules of said courts. The parties hereto hereby waive any
right to a trial by jury in connection with any litigation pursuant to this
Agreement and the transactions contemplated hereby.

12.      ASSIGNMENT; ENTIRE AGREEMENT; AMENDMENT

         12.1       ASSIGNMENT. Neither this Agreement nor any rights hereunder
               may be assigned by either party without the prior written consent
               of the other party hereto; provided, however, that the Company
               may assign its rights and obligations under this Agreement in
               connection with a transaction described in Section 4(i) of the
               Certificate of Designation and the Investor may assign its rights
               under this Agreement to an affiliate of the Investor who agrees
               to be bound by the terms hereof. To the extent that any party
               assigns this Agreement with the prior written consent of the
               other or the Investor assigns this Agreement as permitted herein
               to

                                       16

<PAGE>

               an affiliate of the Investor, the provisions of this Agreement,
               the Subscription Agreement, the Certificate of Designation and
               the Registration Rights Agreement shall inure to the benefit of,
               be binding upon, and be enforceable by and against any such
               assignee. Notwithstanding anything to the contrary contained
               herein or any other Transaction Document, the Investor shall be
               entitled to pledge the Securities in connection with a bona fide
               margin account or other loan secured by the Securities.

         12.2       Except for the Subscription Agreement, the Registration
               Rights Agreement and the Certificate of Designation, this
               Agreement supersedes all other prior oral or written agreements
               between the Investor, the Company, their affiliates and persons
               acting on their behalf with respect to the matters discussed
               herein, and this Agreement and the instruments referenced herein
               contain the entire understanding of the parties with respect to
               the matters covered herein and therein and, except as
               specifically set forth herein or therein, neither the Company nor
               the Investor makes any representation, warranty, covenant or
               undertaking with respect to such matters.

         12.3       No provision of this Agreement may be amended other than by
               an instrument in writing signed by the Company and the holders of
               at least a majority of the Preferred Shares then outstanding, and
               no provision hereof may be waived other than by an instrument in
               writing signed by the party against whom enforcement is sought.
               No such amendment shall be effective to the extent that it
               applies to less than all of the holders of the Preferred Shares
               then outstanding.

         12.4       The Company has not, directly or indirectly, made any
               agreements with the Investor relating to the terms or conditions
               of the transactions contemplated by this Agreement except as set
               forth in this Agreement.

13.      PUBLICITY

         The Company and the Investor shall consult with each other in issuing
any press releases or otherwise making public statements with respect to the
transactions contemplated hereby and no party shall issue any such press release
or otherwise make any such public statement without the prior written consent of
the others, which consent shall not be unreasonably withheld or delayed, except
that no prior consent shall be required if such disclosure is required by law or
applicable law, to the extent a party determines in good faith that it is
legally obligated to do so, in which such case the disclosing party shall
provide the other parties with prior notice of such public statement. The
Company shall not publicly or otherwise disclose the name of the Investor or any
of its affiliates without the Investor's prior written consent unless otherwise
required by law, in which case the Company shall inform the Investor of such
disclosure in writing prior to making such disclosure.

                                       17

<PAGE>

14.      MUTUAL GENERAL RELEASE

         14.1       In consideration of the Company entering into this Agreement
               and the release set forth in Section 14.2, effective as of the
               Effectiveness (the "EFFECTIVE TIME") the Investor, on behalf of
               itself and its heirs, executors, administrators, devisees,
               trustees, partners, directors, officers, shareholders, employees,
               consultants, representatives, predecessors, principals, agents,
               parents, associates, affiliates, subsidiaries, attorneys,
               accountants, successors, successors-in-interest and assignees
               (collectively, the "INVESTOR RELEASING PERSONS"), hereby waives
               and releases, to the fullest extent permitted by law, but subject
               to Section 14.3 below, any and all claims, rights and causes of
               action, whether known or unknown (collectively, the "INVESTOR
               CLAIMS"), that any of the Investor Releasing Persons had or
               currently has as of the Effective Time against (i) the Company,
               (ii) any of the Company's current or former parents,
               shareholders, affiliates, subsidiaries, predecessors or assigns,
               or (iii) any of the Company's or such other persons' or entities'
               current or former officers, directors, employees, agents,
               principals, investors, signatories, advisors, consultants,
               spouses, heirs, estates, executors, attorneys, auditors and
               associates and members of their immediate families other than any
               attorney or law firm that delivered an opinion in connection with
               the Closing (as defined in the Subscription Agreement)
               (collectively, the "COMPANY RELEASED PERSONS"), including,
               without limitation, Investor Claims arising out of or relating to
               the Subscription Agreement, the Registration Rights Agreement,
               the Warrants and the Certificate of Designation (collectively,
               the "RELEASED DOCUMENTS").

         14.2       In further consideration of the Investor's entering into
               this Agreement and the release set forth in Section 14.1,
               effective as of the Effective Time, the Company on behalf of
               itself and its heirs, executors, administrators, devisees,
               trustees, partners, directors, officers, shareholders, employees,
               consultants, representatives, predecessors, principals, agents,
               parents, associates, affiliates, subsidiaries, attorneys,
               accountants, successors, successors-in-interest and assignees
               (collectively, the "COMPANY RELEASING PERSONS"), hereby waives
               and releases, to the fullest extent permitted by law, but subject
               to Section 14.3 below, any and all claims, rights and causes of
               action, whether known or unknown (collectively, the "COMPANY
               CLAIMS"), that any of the Company Releasing Persons had or
               currently has as of the Effective Time against (i) the Investor,
               (ii) any of the Investor's respective current or former parents,
               shareholders, affiliates, subsidiaries, predecessors or assigns,
               or (iii) any of the Investor's or such other persons' or
               entities' current or former officers, directors, employees,
               agents, principals, investors, signatories, advisors,
               consultants, spouses, heirs, estates, executors, attorneys,
               auditors and associates and members of their immediate families
               (collectively, the "INVESTOR RELEASED PERSONS"), including,
               without

                                       18

<PAGE>

               limitation, any Company Claims arising out of or relating to the
               Released Documents.

         14.3       The Company and the Investor acknowledge that each of the
               releases set forth in Sections 14.1 and 14.2 above does not
               affect (a) any claim which any Company Releasing Person or
               Investor Releasing Person may have under this Agreement and
               Section 6 or Section 7 of the Registration Rights Agreement; (b)
               any claim which any Company Releasing Person may have under
               Section 4.1 of the Subscription Agreement; (c) any claim which an
               Investor Releasing Person may have with respect to (i) Section 6A
               of the Subscription Agreement, (ii) any breach by the Company of
               any of its representations and warranties set forth in any of
               Sections 3.3, 3.4(a), 3.4(b), 3.5, 3.7 or 3.14 or the first
               sentence of Section 3.9 of the Subscription Agreement or (iii)
               Section 10.3 of the Subscription Agreement with respect to the
               matters described in the immediately preceding clauses (i) and
               (ii); (d) subject to waivers contained in Sections 7, 8 and 9,
               any continuing or future obligation under the Certificate of
               Designation, Registration Rights Agreement and the following
               Sections of the Subscription Agreement: 5, 6, 6A, 7, 8, 9, 10.1,
               12 and 13; and (e) any matter set forth in the Acknowledgment
               Letter, dated as of the date of this Agreement, delivered by the
               Chief Executive Officer of the Company to the Investor.

15.      TERMINATION

         In the event that the Effectiveness shall not have occurred with
respect to the Investor on or before the date which is five (5) business days
after the date of this Agreement (or such later date as may be mutually agreed
in writing by the Company and the Investor) (the "TERMINATION DATE") due to the
Company's or the Investor's failure to satisfy the conditions set forth in
Sections 1.1, 1.2 and 1.3 above (and the nonbreaching party's failure to waive
such unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party. Subject
to the terms and conditions of this Agreement, each of the Company and the
Investor will use its best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary or desirable to satisfy the
conditions to the other party's obligation to cause the Effectiveness to occur
on or before the Termination Date.

16.      NOTICES, ETC.; INDEMNITY

         16.1       NOTICES. Any notice, demand or request required or permitted
               to be given by either the Company or the Investor pursuant to the
               terms of this Agreement shall be in writing and will be deemed to
               have been delivered (i) upon receipt, when delivered personally;
               (ii) upon receipt, when sent by facsimile (provided confirmation
               of transmission is mechanically or electronically generated and
               kept

                                       19

<PAGE>

               on file by the sending party); or (iii) upon delivery by a
               nationally recognized delivery service, in each case properly
               addressed to the party to receive the same. The addresses and
               facsimile numbers for such communications shall be:

               If to the Company:

                    Worldwide Xceed Group, Inc.
                    640 North LaSalle Street
                    Suite 590
                    Chicago, Illinois 60610
                    Telephone:     (312) 360-6587
                    Facsimile:     (312) 360-6575
                    Attention:     Richard R. Dennerline,
                                   Chief Legal Officer

               With a copy to:

                    Hale and Dorr LLP
                    60 State Street
                    Boston, Massachusetts 02109
                    Telephone:    (617) 526-6000
                    Facsimile:    (617) 526-5000
                    Attention:    Thomas S. Ward

                    If to the Investor, to it at the address and facsimile
               number set forth on the Schedule, with copies to Investor's
               representatives as set forth on the Schedule, or at such other
               address and/or facsimile number and/or to the attention of such
               other person as the recipient party has specified by written
               notice given to each other party five days prior to the
               effectiveness of such change. Written confirmation of receipt (A)
               given by the recipient of such notice, consent, waiver or other
               communications, (B) mechanically or electronically generated by
               the sender's facsimile machine containing the time, date,
               recipient facsimile number and an image of the first page of such
               transmission or (C) provided by a nationally recognized overnight
               delivery service shall be rebuttable evidence of personal
               service, receipt by facsimile or receipt from a nationally
               recognized overnight delivery service in accordance with clause
               (i), (ii) or (iii) above, respectively.

         16.2       INDEMNIFICATION. Each party shall indemnify the other
               against any loss, cost or damages (including reasonable
               attorney's fees and expenses) incurred as a result of such
               parties' breach of any representation, warranty, covenant or
               agreement in this Agreement.

17.      COUNTERPARTS

                                       20

<PAGE>

         This Agreement may be executed in any number of counterparts, each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.

18.      SURVIVAL; SEVERABILITY

         The representations, warranties, covenants and agreements of the
parties hereto shall survive the Effectiveness notwithstanding any due diligence
investigation conducted by or on behalf of the Investor. In the event that any
provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force or effect without said provision; provided that no such
severability shall be effective if it materially changes the economic benefit of
this Agreement to any party.

19.      TITLES AND SUBTITLES

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

                  [Remainder of Page Intentionally Left Blank]

                                       21

<PAGE>

         IN WITNESS WHEREOF, the Company and the Investor have caused this
Waiver Agreement to be duly executed as of the date first written above.

COMPANY:                               INVESTOR:

WORLDWIDE XCEED GROUP, INC.            PECONIC FUND, LTD.

By: /s/ Howard A. Tullman              By:    Ramius Capital Group, LLC
   ----------------------------
Name:   Howard A. Tullman              Its:   Investment Advisor
Title:  Chief Executive Officer
                                       By: /s/ Jeffrey M. Solomon
                                          ------------------------------------
                                       Name :  Jeffrey M. Solomon
                                       Title:  Managing Officer

                                       22

<PAGE>

                                    SCHEDULE

<TABLE>
<CAPTION>

                                       INVESTOR'S ADDRESS AND         NUMBER OF           NUMBER OF
         INVESTOR'S NAME                  FACSIMILE NUMBER         PREFERRED SHARES       WARRANTS
-----------------------------------------------------------------------------------------------------
<S>                                <C>                             <C>                    <C>
Peconic Fund, Ltd.                 c/o Ramius Capital Group, LLC              7,615            61,091
                                   666 Third Avenue                                           300,000
                                   New York, New York,  10017
                                   Attention:  Jeffrey M. Solomon
                                               Jeffrey Smith
                                               Marran Oglivie
                                   Telephone:  (212) 845-7919
                                   Facsimile:  (212) 845-7999
                                   Residence:  Cayman Islands

                                   (REPRESENTATIVES)
                                   Ramius Capital Group, LLC
                                   666 Third Avenue
                                   New York, New York,  10017
                                   Attention:  Jeffrey M. Solomon
                                               Jeffrey Smith
                                                Marran Oglivie
                                   Telephone:  (212) 845-7919
                                   Facsimile:  (212) 845-7999
                                   Residence:  Cayman Islands
</TABLE><PAGE>

                                                                   Exhibit 10.3

                                WAIVER AGREEMENT

     WAIVER AGREEMENT (the "AGREEMENT"), dated as of February 2, 2001, by and
between Worldwide Xceed Group, Inc. (f/k/a Xceed Inc.), a Delaware corporation,
with its principal place of business located at 233 Broadway, New York, New York
10279, (the "COMPANY"), and the investor listed on the SCHEDULE attached hereto
(the "INVESTOR").

     WHEREAS:

     A. The Company, the Investor and certain other entities (the "OTHER
INVESTORS") have entered into that certain Subscription Agreement, dated as of
January 13, 2000 (the "SUBSCRIPTION AGREEMENT"), pursuant to which the Investor
purchased from the Company shares of the Company's Series A Cumulative
Convertible Preferred Stock (the "PREFERRED SHARES") which are convertible into
shares (the "CONVERSION SHARES") of the Company's common stock, par value $0.01
per share (the "COMMON STOCK"), in accordance with the terms of the Company's
Certificate of Designation, Preferences and Rights of Series A Cumulative
Convertible Preferred Stock filed with the Secretary of State of the State of
Delaware on January 13, 2000 (the "CERTIFICATE OF DESIGNATION") and warrants
(the "OLD WARRANTS") to purchase shares of Common Stock.

     B. On April 4, 2000, the Company issued additional warrants, substantially
in the form of the Old Warrants, to the Investor and the Other Investors (the
"ADDITIONAL WARRANTS" and, collectively with the Old Warrants, the "WARRANTS");

     C. The Company, the Investor and the Other Investors have entered into that
certain Registration Rights Agreement, dated as of January 13, 2000, (the
"REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company agreed to
provide certain registration rights under the Securities Act of 1933, as amended
(the "1933 ACT") and the rules and regulations promulgated thereunder;

     D. The Company wishes to redeem and the Investor wishes to allow the
Company to redeem, upon the terms and conditions stated in this Agreement, 550
of the Investor's Preferred Shares (the "REDEMPTION SHARES") and all of the
Investor's Warrants for an aggregate of $550,010 in cash (the "REDEMPTION
PRICE"); and

     E. The Investor wishes to limit conversions under the Certificate of
Designations and to waive, upon the terms and conditions stated in this
Agreement, certain rights with respect to, and provisions of, the Certificate of
Designation, the Subscription Agreement and the Registration Rights Agreement.

     NOW, THEREFORE, the Company and the Investor hereby agree as follows:

<PAGE>

1.   REDEMPTION AND WAIVER

         1.1        REDEMPTION OF REDEMPTION SHARES AND WARRANTS; WAIVER. On the
               basis of the representations and warranties contained in this
               Agreement and subject to the terms and conditions hereinafter set
               forth, the Company shall redeem from the Investor and the
               Investor shall allow the Company to redeem from it the Redemption
               Shares and all of the Investor's Warrants for the Redemption
               Price. The closing of the redemption of the Redemption Shares and
               the Warrants (the "CLOSING") and the effectiveness (the
               "EFFECTIVENESS") of the waivers, covenants, releases and other
               agreements in Sections 5 and 14 shall be on a date which is five
               (5) business days after the date hereof or such later date as may
               be mutually agreed to in writing by the Company and the Investor
               (the "CLOSING DATE"); provided that all conditions precedent to
               the obligations of the Investor and the Company to the Closing
               and the Effectiveness set forth herein shall have been satisfied
               or waived in writing. Assuming that pursuant to the Subscription
               Agreement the Company issued the Investor the Warrants held by
               the Investor free and clear of any taxes, security interest,
               liens, encumbrances, claims and demands of any kind whatsoever,
               the Investor shall transfer such Warrants to the Company, free
               and clear of any restrictions on transfer, taxes, security
               interest, liens, encumbrances and demands of any kind whatsoever.

         1.2        CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY AT
               CLOSING AND EFFECTIVENESS. The obligations of the Company to
               redeem the Redemption Shares and the Warrants and the obligations
               of the Company in Sections 5 and 14 are subject to the
               satisfaction at or before the Closing and the Effectiveness of
               each of the conditions set forth below. Each of these conditions
               are for the Company's sole benefit and may be waived in writing
               by the Company with respect to the Investor at any time in its
               sole discretion.

               (a)  ACCURACY OF THE INVESTOR'S REPRESENTATIONS AND WARRANTIES.
                    The representations and warranties of the Investor shall be
                    true and correct in all material respects as of the date
                    when made and in all material respects as of the Closing
                    Date as though made at each such time.

               (b)  PERFORMANCE BY THE INVESTOR. The Investor shall have
                    performed, satisfied and complied in all material respects
                    with all covenants, agreements and conditions required by
                    this Agreement to be performed, satisfied or complied with
                    by the Investor at or prior to the Closing and the
                    Effectiveness.

               (c)  NO INJUNCTION. No statute, rule, regulation, executive
                    order, decree, ruling or injunction shall have been enacted,
                    entered, promulgated or endorsed by any court or
                    governmental authority of competent jurisdiction which

                                       2
<PAGE>

                    prohibits or adversely affects any of the transactions
                    contemplated by this Agreement, and no proceeding shall have
                    been commenced which may have the effect of prohibiting or
                    adversely affecting any of the transactions contemplated
                    hereby.

               (d)  WAIVER BY OTHER INVESTORS. Each of the Other Investors shall
                    have agreed to limit conversions and waive their rights with
                    respect to the Subscription Agreement, the Registration
                    Rights Agreement and the Certificate of Designations (the
                    "TRANSACTIONS DOCUMENTS") on terms substantially similar to
                    this Agreement.

               (e)  OFFICER'S CERTIFICATE. The Company shall have received a
                    certificate, executed by an authorized signatory of the
                    Investor, dated as of the Closing Date, to the effect that
                    the conditions set forth in Sections 1.2(a) and 1.2(b) above
                    are satisfied.

         1.3        CONDITIONS PRECEDENT TO THE OBLIGATION OF THE INVESTOR AT
               CLOSING AND EFFECTIVENESS. The obligations of the Investor to
               permit the redemption of the Redemption Shares and Warrants and
               the obligations of the Investor in Section 14 are subject to the
               satisfaction at or before the Closing and the Effectiveness of
               each of the conditions set forth below. Each of these conditions
               is for the Investor's sole benefit and may be waived in writing
               by the Investor at any time in its sole discretion.

               (a)  ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
                    The representations and warranties of the Company shall be
                    true and correct in all material respects as of the date
                    when made and in all material respects as of the Closing
                    Date as though made at such time.

               (b)  PERFORMANCE BY THE COMPANY. The Company shall have
                    performed, satisfied and complied in all material respects
                    with all covenants, agreements and conditions required by
                    this Agreement to be performed, satisfied or complied with
                    by the Company at or prior to the Closing and the
                    Effectiveness.

               (c)  NO INJUNCTION. No statute, rule, regulation, executive
                    order, decree, ruling or injunction shall have been enacted,
                    entered, promulgated or endorsed by any court or
                    governmental authority of competent jurisdiction which
                    prohibits or adversely affects any of the transactions
                    contemplated by this Agreement, and no proceeding shall have
                    been commenced which may have the effect of prohibiting or
                    adversely affecting any of the transactions contemplated
                    hereby.

                                       3
<PAGE>

               (d)  LEGAL OPINION. The Company shall have delivered to the
                    Investor an opinion of Hale and Dorr LLP, counsel to the
                    Company, substantially in the form of EXHIBIT C annexed
                    hereto, dated the Closing Date.

               (e)  OFFICER'S CERTIFICATE. The Investor shall have received a
                    certificate, executed by the Chief Executive Officer of the
                    Company, dated as of the Closing Date, to the effect that
                    the conditions set forth in Sections 1.3(a) and 1.3(b) above
                    are satisfied.

               (f)  RESERVATION OF SHARES. On or prior to the Closing Date, the
                    Company shall have duly reserved a number of Conversion
                    Shares equal to the Maximum Conversion Share Number (as
                    defined in Section 4.1) to be reserved for issuance upon
                    conversion of the Preferred Shares.

               (g)  SECRETARY'S CERTIFICATE. The Company shall have delivered to
                    the Investor a certificate in form and substance reasonably
                    satisfactory to the Investor, executed by the secretary of
                    the Company, certifying as to the truth and accuracy of the
                    certificate of incorporation of the Company (the
                    "CERTIFICATE OF INCORPORATION"), as in effect on the Closing
                    Date, the Bylaws of the Company, as in effect on the Closing
                    Date, and the resolutions duly adopted by the Board of
                    Directors authorizing and approving the execution and
                    delivery of this Agreement and the consummation of the
                    transactions contemplated hereby.

               (h)  GOOD STANDING. On or prior to the Closing Date, the Company
                    shall have delivered to the Investor a long-form certificate
                    of good standing and tax status of the Company, certified as
                    of a recent date by the Secretary of State of the State of
                    Delaware.

2.   REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

     The Investor represents and warrants to the Company that:

     2.1  AUTHORITY. This Agreement has been duly authorized and validly
          executed and delivered by the Investor and is a legal, valid and
          binding obligation of the Investor, enforceable against the Investor
          in accordance with its terms, except as such enforceability may be
          limited by applicable bankruptcy, insolvency, or similar laws relating
          to, or affecting generally the enforcement of, creditors' rights and
          remedies or by other equitable principles of general application.

     2.2  NO BROKERS. The Investor has taken no action which would give rise to
          any claim by any person for brokerage commissions, finder's fees or
          similar payments by the Company relating to this Agreement or the
          transactions contemplated hereby.

                                       4
<PAGE>

     2.3  OWNERSHIP OF PREFERRED SHARES AND WARRANTS. The Investor is the sole
          record and beneficial owner of the number of Preferred Shares and
          Warrants set forth opposite the Investor's name on the Schedule.

3.   REPRESENTATIONS AND WARRANTIES OF COMPANY

     The Company represents and warrants to the Investor that:

     3.1       EXCHANGE ACT FILINGS. The Company has registered its Common Stock
          pursuant to Section 12(b) or 12(g) of the Exchange Act and is in full
          compliance with all reporting requirements of the Exchange Act.

     3.2       VALID ISSUANCE OF CAPITAL STOCK.

          (a)  The Company has an authorized capitalization consisting of
               100,000,000 shares of Common Stock and 1,000,000 shares of
               preferred stock, par value $0.05 per share. The Company has
               issued and outstanding on the date hereof 48,299,054 shares of
               Common Stock, of which 20,000 shares are held in treasury, and
               23,115 shares of Series A Preferred Stock. As of the date hereof,
               the Company has outstanding the following securities convertible
               into (other than its Series A Preferred Stock) or exercisable or
               exchangeable for Common Stock (the "DERIVATIVE SECURITIES"): (i)
               options to purchase 8,204,861 shares of Common Stock; and (ii)
               other than the Warrants, warrants to purchase 4,726,562 shares of
               Common Stock.

          (b)  All of the issued shares of capital stock of the Company have
               been duly and validly authorized and issued and are fully paid
               and non-assessable. Upon conversion of the Preferred Shares, in
               accordance with its terms, the Conversion Shares will be validly
               issued, fully paid and nonassessable and free from all taxes,
               liens and charges with respect to the issuance thereof, with the
               holders thereof being entitled to all rights accorded to holders
               of Common Stock. The holders of outstanding shares of capital
               stock of the Company are not and shall not be entitled to
               preemptive or other rights afforded by the Company to subscribe
               for the capital stock or other securities of the Company as a
               result of the issuance of Conversion Shares upon the conversion
               or exercise thereof.

          (c)  Other than as set forth in Section 3.2(a) and options and shares
               that may be issued pursuant to the Company's stock option plans
               as in effect on the date hereof: (i) no shares of the Company's
               capital stock are subject to preemptive rights or any other
               similar rights or any liens or encumbrances

                                       5
<PAGE>

               created or imposed by the Company other than issued and
               outstanding shares of Common Stock held in escrow in connection
               with the Company's acquisition of each of Catalyst Consulting
               Services, Inc., Distributed Systems Solutions, Inc. and Big
               Theory LLC ; (ii) there are no outstanding debt securities issued
               by the Company which are convertible into Common Stock; (iii)
               there are no outstanding options, warrants, scrip, rights to
               subscribe to, calls or commitments of any character whatsoever
               relating to, or securities or rights convertible into, any shares
               of capital stock of the Company (or any subsidiary of the Company
               (each hereinafter referred to as a "SUBSIDIARY" and collectively,
               the "SUBSIDIARIES"), or contracts, commitments, understandings or
               arrangements by which the Company or any Subsidiary is or may
               become bound to issue additional shares of capital stock of the
               Company or any Subsidiary or options, warrants, scrip, rights to
               subscribe to, calls or commitments of any character whatsoever
               relating to, or securities or rights convertible into, any shares
               of capital stock of the Company or any Subsidiary other than
               shares that may be issuable in connection with the acquisition of
               the Company's subsidiary, Pulse Interactive B.V., based on
               financial performance; (iv) there are no agreements or
               arrangements under which the Company (or any Subsidiary) has any
               outstanding obligation to register the sale of any of their
               securities under the 1933 Act (except the Registration Rights
               Agreement, the registration rights agreement among the Company
               and certain shareholders of Zabit & Associates, Inc., the
               Subscription Agreement between the Company and Spherion
               Corporation dated as of April 27, 2000, the Warrant Agreement
               between the Company and Spherion Corporation dated as of November
               15, 2000, the Warrant issued to Hilton Hotels Corporation dated
               as of October 6, 2000 and pursuant to certain employee stock
               option agreements); (v) there are no outstanding securities of
               the Company or any Subsidiary which contain any redemption or
               similar provisions, and there are no contracts, commitments,
               understandings or arrangements by which the Company or any
               Subsidiary is or may become bound to redeem a security of the
               Company or any Subsidiary; (vi) there are no securities or
               instruments containing anti-dilution or similar provisions that
               will be triggered by the issuance of the Conversion Shares as
               described in this Agreement; and (vii) the Company does not have
               any stock appreciation rights or "phantom stock" plans or
               agreements or any similar plan or agreement.

          (d)  All of the authorized shares of capital stock of each Subsidiary
               are owned by the Company, free and clear of any lien, charge,
               security interest, encumbrance, adverse claim or other
               restriction, and all the issued and outstanding shares of capital
               stock of the Subsidiaries are validly issued and are fully paid,
               non-assessable and free of preemptive and similar

                                       6
<PAGE>

               rights. Except as otherwise set forth in this Section 3.3 hereto,
               there are no outstanding agreements or commitments requiring the
               Company or any Subsidiary to issue capital stock or Derivative
               Securities.

         3.3        ORGANIZATION 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 the requisite corporate
               power to own its properties and assets and to carry on its
               business as now being conducted. Each Subsidiary is a corporation
               duly organized, validly existing and in good standing under the
               laws of its respective state of organization, with the requisite
               corporate power to own its properties and assets and to carry on
               its business as now being conducted. The Company and each
               Subsidiary is duly qualified as a foreign corporation to do
               business and is in good standing in every jurisdiction in which
               the nature of the business conducted or property owned by it
               makes such qualification necessary other than those jurisdictions
               in which the failure so to qualify would not have a Material
               Adverse Effect. "MATERIAL ADVERSE EFFECT" means any material
               adverse effect on the business, operations, properties, cash
               flows, prospects or condition (financial or otherwise) of the
               Company and the Subsidiaries taken as a whole and any condition
               or situation which would prohibit or otherwise materially
               adversely interfere with the ability of the Company to enter into
               and perform its obligations under the Transaction Documents.

         3.4        AUTHORIZATION; ENFORCEMENT. (a) The Company has the
               requisite corporate power and authority to enter into and perform
               this Agreement, to redeem the Redemption Shares, to issue the
               Conversion Shares in accordance with the terms hereof and to
               perform its obligations under the Certificate of Designation and
               its Certificate of Incorporation; (b) the execution and delivery
               of this Agreement and the consummation by the Company of the
               transactions contemplated hereby (including the redemption of the
               Redemption Shares) have been duly authorized by all necessary
               corporate action, and no further consent or authorization of the
               Company or its Board of Directors or stockholders is required;
               (c) this Agreement has been duly executed and delivered by the
               Company; and (d) this Agreement constitutes legal, valid and
               binding obligations of the Company enforceable against the
               Company in accordance with its terms.

         3.5        NO BROKERS. The Company has not taken any action which would
               give rise to a claim by any person for brokerage commissions,
               finder's fees or similar payments by the Investor relating to
               this Agreement or the transactions contemplated hereby.

         3.6        NO CONFLICTS. The execution, delivery and performance of
               this Agreement and consummation of the transactions contemplated
               hereby (including the redemption of the Redemption Shares, the
               conversion of the Preferred Shares and

                                       7
<PAGE>

               the issuance of the Conversion Shares upon conversion of the
               Preferred Shares) do not and will not: (i) result in a violation
               of the Certificate of Incorporation, as in effect on the date
               hereof, and the Company's Bylaws, as in effect on the date hereof
               (the Certificate of Incorporation and the Company's Bylaws are
               collectively referred to herein as the "CHARTER DOCUMENTS"); or
               (ii) result in the creation of any lien, charge, security
               interest or encumbrance upon any of the assets of the Company or
               any Subsidiary pursuant to the terms or provisions of or,
               conflict with, or constitute a default (or an event which with
               notice or lapse of time or both would become a default) under, or
               give to others any rights of termination, amendment, acceleration
               or cancellation of, any agreement, indenture, credit facility or
               instrument to which the Company or any Subsidiary is a party, or
               result in a violation of any federal, state, local or foreign
               law, rule, regulation, order, judgment or decree (including
               federal and state securities laws and regulations) applicable to
               the Company or any Subsidiary or by which any property or asset
               of the Company or any Subsidiary is bound or affected, except, in
               the case of clause (ii) for such conflicts, defaults,
               terminations, amendments, accelerations, cancellations and
               violations as would not, individually or in the aggregate, have a
               Material Adverse Effect. The Company is not required under
               federal, state or local law, rule or regulation in the United
               States to obtain any consent, authorization or order of, or make
               any filing or registration with, any court or governmental or
               self-regulatory agency in order for it to execute, deliver or
               perform any of its obligations under this Agreement in accordance
               with the terms hereof.

         3.7        EXCHANGE ACT REPORTS. The Company has filed all reports
               required to be filed by it under the Exchange Act, including
               pursuant to Section 13(a) or 15(d) thereof, since August 31, 1995
               (the foregoing materials being collectively referred to herein as
               the "EXCHANGE ACT REPORTS"). Except for this Agreement and
               similar transactions between the Company and the Other Investors,
               which information will be publicly disclosed by the Company on or
               before 8:30 a.m. Eastern Time, on the second business day
               following the date of execution of this Agreement, but not later
               than the Company's first public announcement of the execution of
               this Agreement or the transactions contemplated by this
               Agreement, by means of the filing of a Form 8-K pursuant to
               Section 5.3 hereof, the Company has not provided to the Investor
               any information which, according to applicable law, rule or
               regulation, should have been disclosed publicly by the Company
               but which has not been so disclosed. As of their respective
               dates, the Exchange Act Reports complied in all material respects
               with the requirements of the Exchange Act and the rules and
               regulations of the SEC promulgated thereunder and other
               applicable federal, state and local laws, rules and regulations,
               and none of the Exchange Act Reports contained any untrue
               statement of a material fact or omitted to state a material fact
               required to be stated therein or necessary in order to make the
               statements therein, in light of the circumstances under which
               they

                                       8
<PAGE>

               were made, not misleading. The Company has filed (including
               filing such documents by incorporation by reference) all
               agreements or documents to which the Company is a party that are
               required to be filed as exhibits to the Exchange Act Reports.

         3.8        EFFECTIVENESS OF SEC FILINGS. The SEC has not issued any
               stop order or other order suspending the effectiveness of any
               registration statement filed by the Company or the Subsidiary
               under the Exchange Act or the 1933 Act.

         3.9        COMPLIANCE WITH INSTRUMENTS, ETC. The Company (or the manner
               in which it conducts its business) is not in breach or violation
               of, or in default under, any term or provision of its Charter
               Documents.

4.       COVENANTS OF THE INVESTOR

         4.1        CONVERSION OF PREFERRED SHARES. The Investor shall not
               submit conversion notices for, and the Company shall not have the
               obligation to issue shares of Common Stock for the conversion of,
               Preferred Shares in excess of that number of Preferred Shares
               which, in the aggregate, would result in the issuance of more
               than 7,900,000 shares of Common Stock (the "MAXIMUM CONVERSION
               SHARE NUMBER"); provided, however, that this limitation shall not
               apply in the event that the Closing and the Effectiveness shall
               not have occurred on or before the date which is five (5)
               business days after the date of this Agreement (or such later
               date as mutually agreed in writing by the Company and the
               Investor). The Investor shall not transfer any of the Preferred
               Shares or Warrants or any rights in the Preferred Shares or
               Warrants to any person or entity unless such transferee shall
               first have agreed in writing to be bound by the provisions of
               this Agreement as if such transferee were a party hereto and any
               assignment in violation of this sentence shall be null and void;
               provided, however, that this limitation shall not apply in the
               event that the Closing and the Effectiveness shall not have
               occurred on or before the date which is five (5) business days
               after the date of this Agreement (or such later date as mutually
               agreed in writing by the Company and the Investor). If the
               Company shall at any time subdivide or combine (by stock split,
               stock dividend, recapitalization or otherwise) its outstanding
               shares of Common Stock into a greater or lesser number of shares,
               the Maximum Conversion Share Number in effect immediately prior
               to such subdivision or combination shall be proportionately
               adjusted to reflect such subdivision or combination, as the case
               may be. Upon delivery by the Company to the Investor of an
               aggregate number of shares of Common Stock equal to the
               Maximum Conversion Share Number upon conversion of Preferred
               Shares by the Investor after the date of this Agreement and if
               the Closing and the Effectiveness have occurred on or before the
               date which is five (5) business days after the date of this
               Agreement (or such later date as mutually agreed in writing by
               the Company and

                                       9
<PAGE>

               the Investor), the Investor shall promptly deliver to the
               Company all stock certificates representing the remaining
               Preferred Shares (the "REMAINING PREFERRED SHARES"). Assuming
               that pursuant to the Subscription Agreement the Company
               issued the Investor the Remaining Preferred Shares held by the
               Investor free and clear of any taxes, security interest, liens,
               encumbrances, claims or demands of any kind whatsoever, at the
               time the Remaining Preferred Shares are delivered to the Company
               pursuant to this Section 4.1, the Investor shall hold the
               Remaining Preferred Shares, and shall transfer such Remaining
               Preferred Shares, duly endorsed in blank, to the Company, free
               and clear of any restrictions on transfer, taxes, security
               interest, liens, encumbrances and demands of any kind whatsoever.

5.       COVENANTS OF THE COMPANY

         5.1        EXCHANGE ACT REGISTRATION. The Company will use its best
               efforts: (a) to cause its Common Stock to continue to be
               registered under Section 12(b) or 12(g) of the Exchange Act; (b)
               to comply in all material respects with its reporting and filing
               obligations under the Exchange Act; and (c) not to take any
               action or file any document (whether or not permitted by the
               Exchange Act or the rules and regulations thereunder) to
               terminate or suspend such registration or to terminate or suspend
               its reporting and filing obligations under the Exchange Act.

         5.2        FILING OF CURRENT REPORT ON FORM 8-K. On or before 8:30
               a.m., Eastern Time, on the second business day following the date
               of this Agreement, but not later than the Company's first public
               announcement of the execution of this Agreement or the
               transactions contemplated by this Agreement, the Company shall
               file with the SEC a Current Report on Form 8-K in a form
               reasonably acceptable to the Investor describing the terms of
               this Agreement, including, without limitation, by including as
               exhibits to such Form 8-K this Agreement. In addition, on or
               before 8:30 a.m., Eastern Time, on the second business day
               following the Closing Date, but not later than the Company's
               first public announcement thereof, the Company shall file with
               the SEC a Current Report on Form 8-K in a form reasonably
               acceptable to the Investor describing the terms of the
               transaction consummated at the Closing and the Effectiveness or
               that the Closing and the Effectiveness did not occur, as the case
               may be.

         5.3        EXPENSES; FEES. Subject to Section 8 below, at the Closing
               and the Effectiveness, the Company shall pay a nonaccountable
               expense allowance of $3,000 to the Investor or its designee(s) by
               wire transfer of immediately available funds in accordance with
               the Investor's written wire instructions.

6.       PAYMENT SET ASIDE

                                       10
<PAGE>

     To the extent that the Company makes a payment or payments to the Investor
hereunder or pursuant to the Subscription Agreement, the Registration Rights
Agreement or the Certificate of Designation or the Investor enforces or
exercises its rights hereunder or thereunder, and such payment or payments or
the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action) by the court of competent jurisdiction in a
final non-appealable judgment, then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force or effect as if such payment had not been made or
such enforcement or set-off had not occurred.

7.   WAIVER OF CERTAIN RIGHTS UNDER THE REGISTRATION RIGHTS AGREEMENT

     Provided that the Closing Date occurs on or before the date which is five
(5) business days after the date of this Agreement (or such later date as may be
mutually agreed in writing by the Company and the Investor), the Investor waives
any right it may have (i) to receive any payments pursuant to Section 2(c) of
the Registration Rights Agreement and (ii) to receive a reduction in the
Conversion Price (as defined in the Certificate of Designations) of the
Preferred Shares in the event of an Excess Blocking Period (as defined in the
Registration Rights Agreement) pursuant to Section 5A(b) of the Registration
Rights Agreement. Notwithstanding the foregoing, the waiver contained in this
Section 7 shall be void and of no further force or effect on or after the first
date after the Closing Date on which there occurs a Conversion Default (as
defined below).

     For purposes of this Agreement, a "CONVERSION DEFAULT" shall be deemed to
have occurred in the event that the Company (1) notifies any holder of Preferred
Shares (including the Investor) directly in writing or pursuant to a public
disclosure, including but not limited to a press release, that the Company
cannot or does not intent to issue shares of Common Stock upon conversion of the
Preferred Shares tendered in accordance with the Certificate of Designation; or
(2) fails to issue shares of Common Stock for any reason to any holder of
Preferred Shares (including the Investor) prior to the tenth (10th) business day
after the date of receipt by the Company of a Conversion Notice (as defined in
the Certificate of Designation) delivered by a holder of Preferred Shares
Investor in accordance with the Series A Certificate of Incorporation or, in the
case of a Merger Conversion Election Conversion pursuant to Section 10 on the
Merger Transaction Closing Date, including, without limitation, because the
Company (x) does not have a sufficient number of shares of Common Stock or other
securities authorized and available or (y) is otherwise prohibited by applicable
law or by the rules and regulations of any stock exchange, interdealer quotation
system or other self-regulatory organization with jurisdiction over the Company
or its securities from issuing all of the Common Stock which is to be issued to
a holder of Preferred Shares.

                                       11
<PAGE>

8.   WAIVER OF CERTAIN RIGHTS UNDER THE CERTIFICATE OF DESIGNATIONS

     8.1       RIGHTS TO DIVIDENDS AND OTHER DISTRIBUTIONS. Provided that the
          Closing Date occurs on or before the date which is five (5) business
          days after the date of this Agreement (or such later date as may be
          mutually agreed in writing by the Company and the Investor), the
          Investor agrees to waive its right (a) to receive dividends on the
          Preferred Shares pursuant to Section 2 of the Certificate of
          Designation and (b) to any adjustment for dividends and other
          distributions pursuant to Section 9(c) of the Certificate of
          Designation; provided, however, that any holder of Preferred Shares
          shall be entitled to any dividends or other distributions by the
          Company to the same extent as if such holder had converted its
          Preferred Shares into Common Stock (except as may be limited by
          Section 4.1) on the record date for such dividend or other
          distribution, and payments thereof shall be made concurrently with the
          dividend or other distribution to the holders of Common Stock.
          Notwithstanding the foregoing, the waiver contained in this Section
          8.1 shall be void and of no further force or effect on and after the
          first day after the Closing Date on which there occurs a Conversion
          Default.

     8.2       RIGHTS TO PREVENT THE ISSUANCE OF PARITY SECURITIES. Provided
          that the Closing Date occurs on or before the date which is five (5)
          business days after the date of this Agreement (or such later date as
          may be mutually agreed in writing by the Company and the Investor),
          the Investor agrees to waive its right to prevent the issuance of (a)
          any Parity Securities (as defined in the Certificate of Designations)
          or (b) any capital stock that ranks senior to the Preferred Shares in
          respect of dividends, each as provided in clause (iii) of Section 3(b)
          of the Certificate of Designation. Notwithstanding the foregoing, the
          waiver contained in this Section 8.2 shall be void and of no further
          force or effect on or after the first date after the Closing Date on
          which there occurs a Conversion Default.

     8.3       RIGHTS TO REDEMPTION UPON AN EXTRAORDINARY TRANSACTION. Provided
          that the Closing Date occurs on or before the date which is five (5)
          business days after the date of this Agreement (or such later date as
          may be mutually agreed in writing by the Company and the Investor),
          the Investor agrees not to exercise its right to (a) redeem the
          Preferred Shares pursuant to Section 5(a) of the Certificate of
          Designation as of the effective date of an Extraordinary Transaction
          (as defined in Section 4 of the Certificate of Designation), except
          with respect to an Extraordinary Transaction described in clause (i)
          of Section 4 of the Certificate of Designation or (b) an adjustment of
          the Ceiling Price (as defined in the Certificate of Designation)
          pursuant to clause (iii) of Section 5(d) of the Certificate of
          Designation; provided, however, that the Investor shall not have the
          right to require the redemption of the Preferred Shares if, with
          respect to such

                                       12
<PAGE>

          Extraordinary Transaction, the Company has delivered a Notice of
          Merger Conversion in accordance with Section 10 and complies with its
          obligations under Section 10. Notwithstanding the foregoing, the
          waiver contained in this Section 8.3 shall be void and of no further
          force or effect on and after the first date after the Closing Date on
          which there occurs a Conversion Default.

     8.4       RIGHTS TO ADJUSTMENT UPON THE ISSUANCE OF DERIVATIVE SECURITIES.
          Provided that the Closing Date occurs on or before the date which is
          five (5) business days after the date of this Agreement (or such later
          date as may be mutually agreed in writing by the Company and the
          Investor), the Investor agrees not to exercise its right to adjust the
          Conversion Period or Conversion Price (each as defined in the
          Certificate of Designation) of the Preferred Shares upon the issuance
          of Derivative Securities (as defined in the Certificate of
          Designation), as set forth in Section 9(c) of the Certificate of
          Designation. Notwithstanding the foregoing, the waiver contained in
          this Section 8.4 shall be void and of no further force or effect on
          and after the first date after the Closing Date on which there occurs
          a Conversion Default.

     8.5       RIGHTS TO PENALTIES UNDER SECTION 11 OF THE CERTIFICATE OF
          DESIGNATION. Provided that the Closing Date occurs on or before the
          date which is five (5) business days after the date of this Agreement
          (or such later date as may be mutually agreed in writing by the
          Company and the Investor), the Investor agrees not to exercise its
          right to redeem its Preferred Shares or receive penalties pursuant to
          Section 11(c) or Section 11(d) of the Certificate of Designation.
          Notwithstanding the foregoing, the waiver contained in the immediate
          preceding sentence of this Section 8.5 shall be void and of no further
          force or effect on and after the first date after the Closing Date on
          which there occurs a Conversion Default. Provided that the Closing
          Date occurs on or before the date which is five (5) business days
          after the date of this Agreement (or such later date as may be
          mutually agreed in writing by the Company and the Investor), the
          Company waives the Investor's compliance with the last sentence of
          Section 11(b) of the Certificate of Designation.

     8.6       RIGHTS TO EXTEND THE MATURITY DATE UPON SUSPENSION OF
          REGISTRATION STATEMENT. Provided that the Closing Date occurs on or
          before the date which is five (5) business days after the date of this
          Agreement (or such later date as may be mutually agreed in writing by
          the Company and the Investor), the Investor agrees not to exercise its
          right to extend the Maturity Date (as defined in the Certificate of
          Designation) of the Preferred Shares as provided in Section 17 of the
          Certificate of Designation. Notwithstanding the foregoing, the waiver
          contained in this Section 8.6 shall be void and of no further force or
          effect on and after the first date after the Closing Date on which
          there occurs a Conversion Default.

                                       13
<PAGE>

     8.7       RIGHT UPON A TRIGGERING EVENT. Provided that the Closing Date
          occurs on or before the date which is five (5) business days after the
          date of this Agreement (or such later date as may be mutually agreed
          in writing by the Company and the Investor), the Investor (i) agrees
          not to exercise its right to redeem its Preferred Shares pursuant to
          Section 5(b) upon the occurrence of a Triggering Event (as defined in
          the Certificate of Designation), except with respect to a Triggering
          Event described in clause (c) or clause (e) of the definition of
          "Triggering Event" in Section 19 of the Certificate of Designation
          with respect to which the Investor has complied with Section 4.1 of
          this Agreement, and (ii) waives its right to receive any adjustment
          pursuant to the last sentence of Section 5(b) of the Certificate of
          Designation. Notwithstanding the foregoing, the waiver contained this
          Section 8.7 shall be void and of no further force or effect on and
          after the first date after the Closing Date on which there occurs a
          Conversion Default.

     8.8       RIGHT TO REQUEST ISSUANCE OF SHARES IN ELECTRONIC FORMAT (I.E.,
          DWAC). Provided that the Closing Date occurs on or before the date
          which is five (5) business days after the date of this Agreement (or
          such later date as may be mutually agreed in writing by the Company
          and the Investor), the Investor agrees to waive its right to request
          that shares be issued in electronic format (i.e., DWAC) upon the
          conversion of Preferred Shares in the event that the Company's
          transfer agent does not offer or does not promptly make available
          service for such electronic delivery of shares. If the Investor
          requests that the Company cause shares to be issued in electronic
          format (i.e., DWAC), then the delivery of the Conversion Notice (as
          defined in the Certificate of Designation) shall be deemed to be a
          representation by the Investor that it has complied with Section 4.1.
          Notwithstanding the foregoing, the waiver contained in this Section
          8.8 shall be void and of no further force or effect on and after the
          first date after the Closing Date on which there occurs a Conversion
          Default

9.   WAIVER OF CERTAIN RIGHTS UNDER THE SUBSCRIPTION AGREEMENT

     Provided that the Closing Date occurs on or before the date which is five
(5) business days after the date of this Agreement (or such later date as may be
mutually agreed in writing by the Company and the Investor), the Investor (i)
agrees not to exercise its right to prevent the Company from declaring a
dividend or other distribution as provided in Section 5.10 of the Subscription
Agreement , (ii) agrees to waive the Company's compliance with Sections 5.1 and
5.2 of the Subscription Agreement , but solely with respect to the number of
shares in excess of the number of shares of Common Stock the Investor is
entitled to receive upon conversion of the Preferred Shares in accordance with
Section 4.1 of this Agreement, and (iii) agrees to waive the Company's
compliance with Sections 5.5 and 5.9 of the Subscription Agreement.
Notwithstanding the foregoing, the waiver contained in this Section 9 shall be
void and of no

                                       14
<PAGE>

further force or effect on and after the first date after the Closing Date on
which there occurs a Conversion Default.

10.  AGREEMENT WITH RESPECT TO MANDATORY CONVERSION OF THE PREFERRED SHARES

     ACCELERATION OF MANDATORY CONVERSION UPON MERGER TRANSACTION COMPANY'S
OPTION. Provided that the Closing Date has occurred on or prior to the date
which is five (5) business days after the date of this Agreement (or such later
date as may be mutually agreed in writing by the Company and the Investor), at
any time on or after the date the Company discloses a pending, proposed or
intended Merger Transaction (as defined below), the Company shall have the
right, in its sole discretion, to require that the Investor convert its
Preferred Shares up to the limitation set forth in Section 4.1 ("MERGER
CONVERSION ELECTION"); provided that the Conditions to Merger Conversion (set
forth below) are satisfied or waived by the Investor. The Company shall exercise
its right to make a Merger Conversion Election by providing the Investor written
notice ("NOTICE OF MERGER CONVERSION") by facsimile and overnight courier, after
the public disclosure of such proposed, pending or intended Merger Transaction
and at least 25 trading days prior to the date of consummation of the Merger
Transaction ("MERGER TRANSACTION CLOSING DATE"). The Notice of Merger Conversion
shall state the anticipated Merger Transaction Closing Date. If the Company
makes a Merger Conversion Election in compliance with this Section 10.1 and the
Conditions to Merger Conversion are satisfied or waived by the Investor, except
to the extent restricted by Section 15 of the Certificate of Designation or
Section 4.1 of this Agreement, on the Merger Transaction Closing Date the
Investor will be deemed to have submitted a Conversion Notice (as defined in the
Certificate of Designation) in accordance with Section 6 of the Certificate of
Designation for a number of Preferred Shares equal to the lesser of (I) all the
Preferred Shares held by the Investor which remain outstanding on such date, and
(II) the maximum number of Preferred Shares which such holder could convert on
the Merger Transaction Closing Date taking into account the restrictions in
Section 15 of the Certificate of Designation and Section 4.1 of this Agreement.
The Investor shall promptly after the Merger Transaction Closing Date surrender
all stock certificates representing the Preferred Shares, duly endorsed for
cancellation, to the Company. If the Company fails to provide Conversion Shares
with respect to any Preferred Shares in accordance with Section 6 of the
Certificate of Designation, then the Merger Conversion Election shall be null
and void with respect to such Preferred Shares and the holder of such Preferred
Shares shall be entitled to all the rights of a holder of outstanding Preferred
Shares set forth in this Certificate of Designations. "CONDITIONS TO MERGER
CONVERSION" shall mean the following conditions: (i) on each day during the
period beginning on and including the date the Company delivers a Notice of
Merger Conversion and ending on and including the Merger Transaction Closing
Date, the Registration Statement (as defined in each Registration Rights
Agreement) is effective and available for the sale of all the Registrable
Securities (as defined in each Registration Rights Agreement) (subject to the
limitation in Section 4.1 of this Agreement) or all the shares of Common Stock
issuable upon conversion of the Preferred Shares (subject to the limitation in
Section 4.1 of this Agreement) then outstanding are immediately available for
resale by the

                                       15
<PAGE>

Investor pursuant to Rule 144(k) under the 1933 Act; (ii) during the period
beginning on the date on which the Company delivers a Notice of Merger
Conversion and ending on and including the Merger Transaction Closing Date,
there shall not have occurred an event constituting a Conversion Default; (iii)
during the period beginning on the date on which the Company delivers a Notice
of Merger Conversion and ending on and including the Merger Transaction Closing
Date, the Company shall have delivered the required number of shares of Common
Stock (as set forth in Section 6 of the Certificate of Designation) upon
conversion of Preferred Shares (subject to the limitation set forth in Section
4.1 of this Agreement) to the Investor within five (5) business days after the
Company's receipt of any Conversion Notice and, if required by Section 6(b)(iii)
of the Certificate of Designation, certificate(s) evidencing the Preferred
Shares being converted, or after receipt of the affidavit, agreement and
indemnification as set forth in Section 17 of the Certificate of Designation;
(iv) the Company shall have delivered notice of the conversion to the Other
Investors of their Preferred Shares on terms and conditions substantially
similar to those contained in this Section 10; and (v) the Company has satisfied
all conditions to the conversions with the Other Investors as set forth in the
Company's agreements with such Other Investors, which are substantially similar
to the conditions in this Section 10. Notwithstanding the above, the Investor
may convert its Preferred Shares (including Preferred Shares selected for
conversion), subject to the limitation set forth in Section 4.1 of this
Agreement, into Common Stock pursuant to Section 6 of the Certificate of
Designation on or prior to the date immediately preceding the Merger Transaction
Closing Date. For purposes of this agreement "MERGER TRANSACTION" shall mean any
merger, consolidation or other business combination of the Company, with or into
any other corporation, entity or person (whether or not the Company is the
surviving corporation) or there occurs any other corporate reorganization or
transaction or series of related transactions, and as a result thereof the
shareholders of the Company pursuant to such merger, consolidation,
reorganization or other transaction own in the aggregate less than 50% of the
voting power and common equity of the ultimate parent corporation or other
entity surviving or resulting from such merger, consolidation, reorganization or
other transaction.

11.      GOVERNING LAW; JURISDICTION

         This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, without regard to principles
of conflicts of law or choice of law, except for matters arising under the 1933
Act or the Exchange Act which matters shall be construed and interpreted in
accordance with such laws. Each of the Company and the Investor hereby agrees
that all actions or proceedings arising directly or indirectly from or in
connection with this Agreement shall be litigated only in the state or federal
courts located in the City of Wilmington, County of New Castle, State of
Delaware. The Company and the Investor consents to the jurisdiction and venue of
the foregoing courts and consent that any process or notice of motion or other
application to either of said courts or a judge thereof may be served inside or
outside the State of Delaware by registered mail, return receipt requested,
directed to the such party at its address set forth in this Agreement (and
service so made shall be deemed complete five (5) days after the same has been
posted as aforesaid) or by personal service or in such other

                                       16
<PAGE>

manner as may be permissible under the rules of said courts. The parties hereto
hereby waive any right to a trial by jury in connection with any litigation
pursuant to this Agreement and the transactions contemplated hereby.

12.  ASSIGNMENT; ENTIRE AGREEMENT; AMENDMENT

     12.1      ASSIGNMENT. Neither this Agreement nor any rights hereunder may
          be assigned by either party without the prior written consent of the
          other party hereto; provided, however, that the Company may assign its
          rights and obligations under this Agreement in connection with a
          transaction described in Section 4(i) of the Certificate of
          Designation and the Investor may assign its rights under this
          Agreement to an affiliate of the Investor who agrees to be bound by
          the terms hereof. To the extent that any party assigns this Agreement
          with the prior written consent of the other or the Investor assigns
          this Agreement as permitted herein to an affiliate of the Investor,
          the provisions of this Agreement, the Subscription Agreement, the
          Certificate of Designation and the Registration Rights Agreement shall
          inure to the benefit of, be binding upon, and be enforceable by and
          against any such assignee. Notwithstanding anything to the contrary
          contained herein or any other Transaction Document, the Investor shall
          be entitled to pledge the Securities in connection with a bona fide
          margin account or other loan secured by the Securities.

     12.2      Except for the Subscription Agreement, the Registration Rights
          Agreement and the Certificate of Designation, this Agreement
          supersedes all other prior oral or written agreements between the
          Investor, the Company, their affiliates and persons acting on their
          behalf with respect to the matters discussed herein, and this
          Agreement and the instruments referenced herein contain the entire
          understanding of the parties with respect to the matters covered
          herein and therein and, except as specifically set forth herein or
          therein, neither the Company nor the Investor makes any
          representation, warranty, covenant or undertaking with respect to such
          matters.

     12.3      No provision of this Agreement may be amended other than by an
          instrument in writing signed by the Company and the holders of at
          least a majority of the Preferred Shares then outstanding, and no
          provision hereof may be waived other than by an instrument in writing
          signed by the party against whom enforcement is sought. No such
          amendment shall be effective to the extent that it applies to less
          than all of the holders of the Preferred Shares then outstanding.

     12.4      The Company has not, directly or indirectly, made any agreements
          with the Investor relating to the terms or conditions of the
          transactions contemplated by this Agreement except as set forth in
          this Agreement.

                                       17
<PAGE>

13.  PUBLICITY

     The Company and the Investor shall consult with each other in issuing any
press releases or otherwise making public statements with respect to the
transactions contemplated hereby and no party shall issue any such press release
or otherwise make any such public statement without the prior written consent of
the others, which consent shall not be unreasonably withheld or delayed, except
that no prior consent shall be required if such disclosure is required by law or
applicable law, to the extent a party determines in good faith that it is
legally obligated to do so, in which such case the disclosing party shall
provide the other parties with prior notice of such public statement. The
Company shall not publicly or otherwise disclose the name of the Investor or any
of its affiliates without the Investor's prior written consent unless otherwise
required by law, in which case the Company shall inform the Investor of such
disclosure in writing prior to making such disclosure.

14.  MUTUAL GENERAL RELEASE

     14.1      In consideration of the Company entering into this Agreement and
          the release set forth in Section 14.2, effective as of the Closing and
          the Effectiveness (the "EFFECTIVE TIME") the Investor, on behalf of
          itself and its heirs, executors, administrators, devisees, trustees,
          partners, directors, officers, shareholders, employees, consultants,
          representatives, predecessors, principals, agents, parents,
          associates, affiliates, subsidiaries, attorneys, accountants,
          successors, successors-in-interest and assignees (collectively, the
          "INVESTOR RELEASING PERSONS"), hereby waives and releases, to the
          fullest extent permitted by law, but subject to Section 14.3 below,
          any and all claims, rights and causes of action, whether known or
          unknown (collectively, the "INVESTOR CLAIMS"), that any of the
          Investor Releasing Persons had or currently has as of the Effective
          Time against (i) the Company, (ii) any of the Company's current or
          former parents, shareholders, affiliates, subsidiaries, predecessors
          or assigns, or (iii) any of the Company's or such other persons' or
          entities' current or former officers, directors, employees, agents,
          principals, investors, signatories, advisors, consultants, spouses,
          heirs, estates, executors, attorneys, auditors and associates and
          members of their immediate families other than any attorney or law
          firm that delivered an opinion in connection with the Closing (as
          defined in the Subscription Agreement) (collectively, the "COMPANY
          RELEASED PERSONS"), including, without limitation, Investor Claims
          arising out of or relating to the Subscription Agreement, the
          Registration Rights Agreement, the Warrants and the Certificate of
          Designation (collectively, the "RELEASED DOCUMENTS").

     14.2      In further consideration of the Investor's entering into this
          Agreement and the release set forth in Section 14.1, effective as of
          the Effective Time, the

                                       18
<PAGE>

          Company on behalf of itself and its heirs, executors, administrators,
          devisees, trustees, partners, directors, officers, shareholders,
          employees, consultants, representatives, predecessors, principals,
          agents, parents, associates, affiliates, subsidiaries, attorneys,
          accountants, successors, successors-in-interest and assignees
          (collectively, the "COMPANY RELEASING PERSONS"), hereby waives and
          releases, to the fullest extent permitted by law, but subject to
          Section 14.3 below, any and all claims, rights and causes of action,
          whether known or unknown (collectively, the "COMPANY CLAIMS"), that
          any of the Company Releasing Persons had or currently has as of the
          Effective Time against (i) the Investor, (ii) any of the Investor's
          respective current or former parents, shareholders, affiliates,
          subsidiaries, predecessors or assigns, or (iii) any of the Investor's
          or such other persons' or entities' current or former officers,
          directors, employees, agents, principals, investors, signatories,
          advisors, consultants, spouses, heirs, estates, executors, attorneys,
          auditors and associates and members of their immediate families
          (collectively, the "INVESTOR RELEASED PERSONS"), including, without
          limitation, any Company Claims arising out of or relating to the
          Released Documents.

     14.3      The Company and the Investor acknowledge that each of the
          releases set forth in Sections 14.1 and 14.2 above does not affect (a)
          any claim which any Company Releasing Person or Investor Releasing
          Person may have under this Agreement and Section 6 or Section 7 of the
          Registration Rights Agreement; (b) any claim which any Company
          Releasing Person may have under Section 4.1 of the Subscription
          Agreement; (c) any claim which an Investor Releasing Person may have
          with respect to (i) Section 6A of the Subscription Agreement, (ii) any
          breach by the Company of any of its representations and warranties set
          forth in any of Sections 3.3, 3.4(a), 3.4(b), 3.5, 3.7 or 3.14 or the
          first sentence of Section 3.9 of the Subscription Agreement or (iii)
          Section 10.3 of the Subscription Agreement with respect to the matters
          described in the immediately preceding clauses (i) and (ii); (d)
          subject to waivers contained in Sections 7, 8 and 9, any continuing or
          future obligation under the Certificate of Designation, Registration
          Rights Agreement and the following Sections of the Subscription
          Agreement: 5, 6, 6A, 7, 8, 9, 10.1, 12 and 13; and (e) any matter set
          forth in the Acknowledgment Letter, dated as of the date of this
          Agreement, delivered by the Chief Executive Officer of the Company to
          the Investor.

15.  TERMINATION

     In the event that the Closing shall not have occurred with respect to the
Investor on or before the date which is five (5) business days after the date of
this Agreement (or such later date as may be mutually agreed in writing by the
Company and the Investor) (the "TERMINATION DATE") due to the Company's or the
Investor's failure to satisfy the conditions set forth in

                                       19
<PAGE>

Sections 1.1, 1.2 and 1.3 above (and the nonbreaching party's failure to waive
such unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party;
provided, however, that if this Agreement is terminated pursuant to this Section
15, the Company shall remain obligated to reimburse the Investor (provided that
it is not a breaching party) for the expenses described in Section 5.3 above.
Subject to the terms and conditions of this Agreement, each of the Company and
the Investor will use its best efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary or desirable to
satisfy the conditions to the other party's obligation to cause the Closing and
the Effectiveness to occur on or before the Termination Date.

16.  NOTICES, ETC.; INDEMNITY

     16.1      NOTICES. Any notice, demand or request required or permitted to
          be given by either the Company or the Investor pursuant to the terms
          of this Agreement shall be in writing and will be deemed to have been
          delivered (i) upon receipt, when delivered personally; (ii) upon
          receipt, when sent by facsimile (provided confirmation of transmission
          is mechanically or electronically generated and kept on file by the
          sending party); or (iii) upon delivery by a nationally recognized
          delivery service, in each case properly addressed to the party to
          receive the same. The addresses and facsimile numbers for such
          communications shall be:

          If to the Company:

               Worldwide Xceed Group, Inc.
               640 North LaSalle Street
               Suite 590
               Chicago, Illinois 60610
               Telephone:       (312) 360-6587
               Facsimile:       (312) 360-6575
               Attention:       Richard R. Dennerline,
                                Chief Legal Officer

          With a copy to:

               Hale and Dorr LLP
               60 State Street
               Boston, Massachusetts 02109
               Telephone:       (617) 526-6000
               Facsimile:       (617) 526-5000
               Attention:       Thomas S. Ward

                                       20
<PAGE>

               If to the Investor, to it at the address and facsimile number set
          forth on the Schedule, with copies to Investor's representatives as
          set forth on the Schedule, or at such other address and/or facsimile
          number and/or to the attention of such other person as the recipient
          party has specified by written notice given to each other party five
          days prior to the effectiveness of such change. Written confirmation
          of receipt (A) given by the recipient of such notice, consent, waiver
          or other communications, (B) mechanically or electronically generated
          by the sender's facsimile machine containing the time, date, recipient
          facsimile number and an image of the first page of such transmission
          or (C) provided by a nationally recognized overnight delivery service
          shall be rebuttable evidence of personal service, receipt by facsimile
          or receipt from a nationally recognized overnight delivery service in
          accordance with clause (i), (ii) or (iii) above, respectively.

     16.2      INDEMNIFICATION. Each party shall indemnify the other against any
          loss, cost or damages (including reasonable attorney's fees and
          expenses) incurred as a result of such parties' breach of any
          representation, warranty, covenant or agreement in this Agreement.

17.  COUNTERPARTS

     This Agreement may be executed in any number of counterparts, each of which
shall be enforceable against the parties actually executing such counterparts,
and all of which together shall constitute one instrument.

18.  SURVIVAL; SEVERABILITY

     The representations, warranties, covenants and agreements of the parties
hereto shall survive the Closing and the Effectiveness notwithstanding any due
diligence investigation conducted by or on behalf of the Investor. In the event
that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force or effect without said provision; provided that no
such severability shall be effective if it materially changes the economic
benefit of this Agreement to any party.

19.  TITLES AND SUBTITLES

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

                  [Remainder of Page Intentionally Left Blank]

                                       21
<PAGE>

         IN WITNESS WHEREOF, the Company and the Investor have caused this
Waiver Agreement to be duly executed as of the date first written above.

COMPANY:                                    INVESTOR:

WORLDWIDE XCEED GROUP, INC.                 LEONARDO, L.P.

By: /s/ Howard A. Tullman                   By:    Angelo, Gordon & Co., L.P.
   ---------------------------------
Name:   Howard A. Tullman                   Its:   General Partner
     -------------------------------
Title: Chief Executive Officer
                                       By: /s/  Michael L. Gordon
                                         ---------------------------------------
                                         Name:  Michael L. Gordon
                                         Title: Chief Operating Officer

                                       22
<PAGE>

                                    SCHEDULE

<TABLE>
<CAPTION>

                                       INVESTOR'S ADDRESS AND         NUMBER OF         NUMBER OF
         INVESTOR'S NAME                  FACSIMILE NUMBER         PREFERRED SHARES      WARRANTS
---------------------------------- ------------------------------- ----------------- -----------------
<S>                                <C>                             <C>               <C>
Leonardo, L.P.                     C/o Angelo, Gordon & Co., L.P.       8,259              61,091
                                   245 Park Avenue, 26th Floor                            450,000
                                   New York, New York  10167
                                   Attention:  Ari J. Storch
                                               Adam J. Chill
                                   Telephone: (212) 692-2000
                                   Facsimile:  (212) 867-6449
                                   Residence:  Cayman Islands

                                   (REPRESENTATIVES)
                                   C/o Angelo, Gordon & Co., L.P.
                                   245 Park Avenue, 26th Floor
                                   New York, New York  10167
                                   Attention:  Ari J. Storch
                                               Adam J. Chill
                                   Telephone: (212) 692-2000
                                   Facsimile:  (212) 867-6449
                                   Residence:  Cayman Islands
</TABLE>

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