Document:

EXHIBIT 10.2

                   AGREEMENT WITH BAC CONSULTING CORPORATION

         AGREEMENT  between  BAC  CONSULTING   CORPORATION  ("BAC")  and  EXODUS
ACQUISITION CORPORATION (the "Company").

         WHEREAS the Company is a development stage company that has no specific
business  plan and  intends  to merge,  acquire  or  otherwise  combine  with an
unidentified company (the "Business Combination");

         WHEREAS  BAC is a  shareholder  of the  Company  and  desires  that the
Company locate a suitable target company for a Business Combination;

         WHEREAS the Company  desires  that BAC assist it in locating a suitable
target company for a Business Combination;

         NOW THEREFORE, it is agreed:

         1.00     ACTIONS BY BAC.  BAC agrees to assist in:

         1.01     The  preparation  and filing with the  Securities and Exchange
Commission of a registration statement on Form 10-SB for the common stock of the
Company;

         1.02     The location and review of potential  target  companies  for a
business  combination  and  the  introduction  of  potential  candidates  to the
Company;

         1.03     The  preparation  and filing with the  Securities and Exchange
Commission  of all required  filings under the  Securities  Exchange Act of 1934
until the Company enters into a business combination;

         2.00     PAYMENT OF THE COMPANY  EXPENSES.  BAC agrees to pay on behalf
of the Company all corporate, organizational and other costs incurred or accrued
by the Company until  effectiveness of a business  combination.  BAC understands
and agrees that it will not be reimbursed  for any payments made by it on behalf
of the Company.

         3.00     INDEPENDENT  CONSULTANT.  BAC is not now,  and  shall  not be,
authorized to enter into any agreements,  contracts or  understandings on behalf
of the  Company  and BAC is not,  and shall not be deemed to be, an agent of the
Company.

         4.00     USE OF OTHER CONSULTANTS.  The Company  understands and agrees
that BAC intends to work with consultants, brokers, bankers, or others to assist
it in locating business  entities  suitable for a business  combination and that
BAC may share with such consultants or others,  in its sole  discretion,  all or
any  portion  of its  stock  in the  Company  and  may  make  payments  to  such
consultants from its own resources for their services. The Company shall have no
responsibility for all or any portion of such payments.

         5.00     BAC  EXPENSES.  BAC will  bear its own  expenses  incurred  in
regard to its actions under this agreement.

         6.00     ARBITRATION.  The parties hereby agree that any and all claims
(except only for requests for  injunctive  or other  equitable  relief)  whether
existing  now,  in the past or in the  future  as to which  the  parties  or any
affiliates may be adverse parties,  and whether arising out of this agreement or
from any other  cause,  will be  resolved  by  arbitration  before the  American
Arbitration Association within the State of California.

                                       45

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         7.00     COVENANT OF FURTHER ASSURANCES.  The parties agree to take any
further actions and to execute any further documents which may from time to time
be necessary or appropriate to carry out the purposes of this agreement.

         8.00     EFFECTIVE  DATE. The effective date of this agreement is as of
February 21,2000.

         IN WITNESS  WHEREOF,  the  parties  have  approved  and  executed  this
agreement.

BAC Consulting Corporation
/s/Tim C. Chang
---------------
Tim C. Chang, President

EXODUS ACQUISITION CORPORATION
/s/Tim C. Chang
---------------
Tim C. Chang, President

                                       46EXHIBIT 4.8

                                XIOX CORPORATION

                  STOCK PURCHASE AND INVESTOR RIGHTS AGREEMENT

         This Stock Purchase and Investor Rights Agreement (this "Agreement") is
made and entered into as of February 7, 2000, by and between Xiox Corporation, a
Delaware corporation (the "Company"),  and each of the persons listed on Exhibit
A hereto, each of which is herein referred to as an "Investor."

                                    RECITALS

         WHEREAS,  the  Company  desires  to  sell to each  Investor,  and  each
Investor  desires to  purchase  from the  Company,  shares of Series B Preferred
Stock,  par value  $.01 per  share,  of the  Company  (the  "Series B  Preferred
Stock"), on the terms and conditions set forth in this Agreement;

         WHEREAS,  such Series B Preferred Stock will be convertible into shares
of the Common  Stock,  par value $.01 per share,  of the  Company  (the  "Common
Stock");

         NOW, THEREFORE,  in consideration of the foregoing recitals, the mutual
promises hereinafter set forth, and other good and valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:

     1.  AGREEMENT TO PURCHASE AND SELL STOCK.

         (a)  Authorization.  As of the first  Closing (as defined  below),  the
Company's Board of Directors (the "Board") will have authorized the issuance and
sale, pursuant to the terms and conditions of this Agreement, of up to 1,020,000
shares of Series B Preferred Stock, in one or more closings,  having the rights,
preferences,  privileges  and  restrictions  set  forth  in the  Certificate  of
Designations,  Preferences  and Other Rights of Series B Preferred  Stock in the
form attached hereto as Exhibit B (the "Certificate of Designations")  and up to
1,020,000  shares of Common Stock for issuance  upon  conversion of the Series B
Preferred Stock.

         (b) Agreement to Purchase and Sell Securities. Subject to the terms and
conditions  hereof, the Company hereby agrees to issue and sell to each Investor
and each  Investor  hereby  agrees to acquire  from the  Company,  the number of
shares of Series B Preferred  Stock  specified  opposite each Investor's name on
Exhibit A hereto (collectively,  the "Purchased Shares") at a price per share in
cash equal to the Per Share Purchase Price (as defined below),  for an aggregate
cash  consideration  equal to such number of shares of Series B Preferred Stock,
multiplied by the Per Share Purchase Price. As used in this Agreement,  the "Per
Share Purchase Price" shall be equal to twenty dollars ($20.00). Exhibit A shall
be revised with respect to each Closing to reflect the identity of the Investors
and the  number of shares  purchased  by each  Investor  at each  Closing.  Each
Investor  participating in a Closing under this agreement shall be an "Investor"
within the meaning of this Agreement, and the shares of Series B Preferred Stock
purchased by such  Investors  shall be "Purchased  Shares" within the meaning of
this Agreement.

                                      -1-

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         (c) Use of  Proceeds.  The  Company  intends  to, and will  (subject to
modification  by Board  approval)  apply the net  proceeds  from the sale of the
Purchased  Shares for  corporate  purposes  disclosed  to the  Investors  by the
Company prior to the date hereof.

     2. CLOSING.

         (a) The purchase and sale of the  Purchased  Shares shall take place at
one or more  closings  (each a  "Closing").  At each  Closing,  the Company will
deliver to each Investor certificates  representing the Purchased Shares against
delivery  to the  Company by each  Investor  of the  consideration  set forth in
Section 1(b) paid by wire  transfer of funds to the Company.  Closing  documents
may be delivered by facsimile  with original  signature  pages sent by overnight
courier.

         (b) The Closings shall occur at the offices of Wilson Sonsini  Goodrich
&  Rosati,  650 Page Mill  Road,  Palo  Alto,  California  at 2:00 p.m.  Pacific
Daylight Time,  within three (3) business days after the conditions set forth in
Section 5 have been  satisfied,  or at such other time and place as the  Company
and each Investor  mutually  agree upon.  All Closings  shall occur on or before
February 29, 2000.

     3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     The  Company  hereby  represents  and  warrants to each  Investor  that the
statements  in this Section 3 are true and  correct,  except as set forth in the
Disclosure  Letter  from the  Company  of even date  herewith  (the  "Disclosure
Letter") or disclosed in the SEC Documents (as defined below):

         (a)  Organization  Good  Standing and  Qualification.  The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all corporate  power and authority  required to
(a) carry on its  business  as  presently  conducted,  and (b)  enter  into this
Agreement  and the other  agreements,  instruments  and  documents  contemplated
hereby, and to consummate the transactions  contemplated hereby and thereby. The
Company is qualified to do business and is in good standing in each jurisdiction
in which the failure to so qualify would have a Material Adverse Effect. As used
in this Agreement, "Material Adverse Effect" means a material adverse effect on,
or a material  adverse  change in, or a group of such  effects on or changes in,
the business, operations, financial condition, results of operations, prospects,
assets or liabilities of the applicable party and its  subsidiaries,  taken as a
whole.

         (b) Capitalization.  The capitalization of the Company,  without giving
effect to the transactions  contemplated by this Agreement,  is as follows.  The
authorized  stock of the Company  consists of 50,000,000  shares of Common Stock
and 10,000,000  shares of Preferred  Stock, of which 1,907,989  shares have been
designated  Series A  Preferred  Stock,  and  1,020,000  shares  will  have been
designated  Series B Preferred Stock prior to the first Closing.  As of November
30, 1999,  there were issued and outstanding  3,403,564  shares of Common Stock,
1,727,989  shares  of  Series A  Preferred  Stock,  and no  shares  of  Series B
Preferred  Stock.  All such shares of Common Stock and Preferred Stock have been
duly authorized,  and all such issued and outstanding shares of Common Stock and
Preferred Stock have been validly issued,  are fully paid and  nonassessable and
are free and clear of all liens, claims and encumbrances,  other than any liens,
claims or  encumbrances

                                       -2-

<PAGE>

created by or imposed upon the holders  thereof.  As of November  30, 1999,  the
Company has also  reserved  900,000  shares of Common  Stock for  issuance  upon
exercise of options  granted to officers,  directors,  employees or  independent
contractors or affiliates of the Company under the Company's Restated 1984 Stock
Option Plan and the  Company's  1994 Stock Plan. As of November 30, 1999, of the
900,000  shares of Common Stock  reserved for issuance upon exercise of options,
848,677 shares remained  subject to outstanding  options with a weighted average
exercise  price of  approximately  $11.21 per  share,  and  37,464  shares  were
reserved for future  grant.  All shares of Common  Stock  subject to issuance as
aforesaid,   upon  issuance  on  the  terms  and  conditions  specified  in  the
instruments  pursuant  to which  they  are  issuable,  will be duly  authorized,
validly  issued,  fully  paid  and  nonassessable.  There  are no  other  equity
securities,  options,  warrants, calls, rights, commitments or agreements of any
character to which the Company is a party or by which it is bound obligating the
Company to issue,  deliver,  sell,  repurchase or redeem, or cause to be issued,
delivered, sold, repurchased or redeemed, any shares of the capital stock of the
Company or obligating the Company to grant, extend or enter into any such equity
security,  option,  warrant, call, right,  commitment or agreement.  The Company
does not have any  subsidiaries,  nor does the Company  own any  capital  stock,
assets  comprising  the  business  of,  obligations  of, or any  other  interest
(including,  without limitation,  any equity or partnership interest) in, or any
outstanding loan or advance to or from, any person or entity.

         (c) Due Authorization. All corporate action on the part of the Company,
its  officers,  directors  and  stockholders  necessary  for the  authorization,
execution,  delivery of, and the  performance of all  obligations of the Company
under this Agreement, and the authorization,  issuance, reservation for issuance
and delivery of all of the Purchased Shares being sold under this Agreement, has
been  taken,  and this  Agreement  constitutes  the  legal,  valid  and  binding
obligation of the Company,  enforceable  against the Company in accordance  with
its  terms,  except  (a)  as  may  be  limited  by  (i)  applicable  bankruptcy,
insolvency,  reorganization or others laws of general application relating to or
affecting the enforcement of creditors'  rights generally and (ii) the effect of
rules of law governing the availability of equitable  remedies and (b) as rights
to indemnity or  contribution  may be limited under federal or state  securities
laws or by principles of public policy thereunder.

         (d) Valid Issuance of Stock.

                  (i) Valid Issuance.  The shares of Series B Preferred Stock to
be issued  pursuant to this  Agreement,  and the shares of Common Stock issuable
upon  conversion  thereof,  will be, upon payment  therefor by each  Investor in
accordance with this Agreement, or conversion in accordance with the Certificate
of Designations, duly authorized, validly issued, fully paid and non-assessable.

                  (ii) Compliance with Securities Laws. Assuming the correctness
of the representations  made by each Investor in Section 4 hereof, the Purchased
Shares will be issued to each Investor in compliance with applicable  exemptions
from (i) the registration and prospectus delivery requirements of the Securities
Act of 1933, as amended (the  "Securities  Act") and (ii) the  registration  and
qualification  requirements  of all applicable  securities laws of the states of
the United States.

                                      -3-

<PAGE>

         (e) Governmental Consents. No consent, approval, order or authorization
of, or registration qualification,  designation, declaration or filing with, any
federal,  state or local  governmental  authority  on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement, except for: (i) compliance with the HSR Requirements (as defined
below)  that  may be  required  for the  voluntary  conversion  of the  Series B
Preferred Stock;  (ii) the filing of a Form 8-K with the Securities and Exchange
Commission   ("SEC")   following   the   Closing;   (iii)  the  filing  of  such
qualifications   or  filings  under  the  Securities  Act  and  the  regulations
thereunder  and all  applicable  state  securities  laws as may be  required  in
connection  with  the  transactions  contemplated  by this  Agreement;  (iv) the
listing of the Common Stock  issuable upon  conversion of the Series B Preferred
Stock on the Nasdaq  SmallCap  Market and (v) the filing of the  Certificate  of
Designations  with the  Secretary  of State of the State of  Delaware.  All such
qualifications and filings will, in the case of qualifications,  be effective on
the Closing and will, in the case of filings, be made within the time prescribed
by law. As used herein,  the term "HSR  Requirements"  means compliance with the
filing and other requirements of the  Hart-Scott-Rodino  Antitrust  Improvements
Act of 1976, as amended (the "HSR Act").

         (f) Non-Contravention.  The execution, delivery and performance of this
Agreement  by  the  Company,   and  the  consummation  by  the  Company  of  the
transactions contemplated hereby, do not and will not (i) contravene or conflict
with the Certificate of Incorporation or Bylaws of the Company;  (ii) constitute
a violation of any provision of any federal, state, local or foreign law binding
upon or applicable to the Company;  or (iii) constitute a default or require any
consent  under,  give  rise  to  any  right  of  termination,   cancellation  or
acceleration  of, or to a loss of any  benefit to which the  Company is entitled
under, or result in the creation or imposition of any lien, claim or encumbrance
on any assets of the Company under, any contract to which the Company is a party
or any permit,  license or similar right relating to the Company or by which the
Company may be bound or affected  in such a manner as,  together  with all other
such matters, would have Material Adverse Effect.

         (g)  Litigation.   There  is  no  action,  suit,   proceeding,   claim,
arbitration or investigation ("Action") pending or, to the best of the Company's
knowledge,  threatened:  (i) against the Company, its activities,  properties or
assets,  or any officer,  director or employee of the Company in connection with
such officer's,  director's or employee's relationship with, or actions taken on
behalf of, the Company,  that is  reasonably  likely to have a Material  Adverse
Effect, or (ii) that seeks to prevent,  enjoin,  alter or delay the transactions
contemplated by this Agreement.  The Company is not a party to or subject to the
provisions of any order,  writ,  injunction,  judgment or decree of any court or
government  agency or  instrumentality.  No Action by the  Company is  currently
pending nor does the Company  intend to initiate  any Action that is  reasonably
likely to have a Material  Adverse  Effect.

         (h) Compliance  with Law and Charter  Documents.  The Company is not in
violation or default of any provisions of its  Certificate of  Incorporation  or
Bylaws, both as amended.  The Company has complied and is in compliance with all
applicable statutes, laws, rules, regulations and orders of the United States of
America and all states thereof,  foreign countries and other governmental bodies
and agencies  having  jurisdiction  over the Company's  business or  properties,

                                      -4-

<PAGE>

except  for  any  violations  that  would  not,  either  individually  or in the
aggregate, have a Material Adverse Effect.

         (i) SEC Documents.

                  (i) Reports.  The Company has furnished to each Investor prior
to the date  hereof  copies of its Annual  Report on Form 10-K SB for the fiscal
year ended December 31, 1998 ("Form 10-K"),  its Quarterly  Reports on Form 10-Q
SB for the fiscal  quarters ended March 31, June 30, and September 30, 1999 (the
"Form  10-Q's"),  and all  other  registration  statements,  reports  and  proxy
statements  filed by the Company with the SEC on or after December 31, 1998 (the
Form 10-K, the Form 10-Q's and such registration  statements,  reports and proxy
statements are collectively referred to herein as the "SEC Documents").  Each of
the  SEC  Documents,  as of  the  respective  date  thereof  (or if  amended  or
superseded by a filing prior to the closing date of this Agreement,  then on the
date of such filing), did not, and each of the registration statements,  reports
and proxy statements filed by the Company with the SEC after the date hereof and
prior  to the  Closing  will  not,  as of the date  thereof  (or if  amended  or
superseded by a filing prior to the date of this Agreement,  then on the date of
such filing), contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements  made therein,  in light
of the circumstances under which they were made, not misleading.  The Company is
not a party to any material  contract,  agreement or other  arrangement that was
required to have been filed as an Exhibit to the SEC  Documents  that was not so
filed.

                  (ii)  Financial  Statements.  The  Company has  provided  each
Investor with copies of its audited financial statements (the "Audited Financial
Statements")  for the fiscal year ended  December  31, 1998,  and its  unaudited
financial  statements  for the nine-month  period ended  September 30, 1999 (the
"Balance Sheet Date").  Since the Balance Sheet Date, the Company has duly filed
with the SEC all registration statements,  reports and proxy statements required
to be filed by it under the  Securities  Exchange  Act of 1934,  as amended (the
"Exchange Act"), and the Securities Act. The audited and unaudited  consolidated
financial statements of the Company included in the SEC Documents filed prior to
the date hereof fairly present, in conformity with generally accepted accounting
principles ("GAAP") (except, in the case of the Form 10-Q's, as may otherwise be
permitted by Form 10-Q)  applied on a consistent  basis (except as otherwise may
be stated in the notes  thereto),  the  consolidated  financial  position of the
Company  and its  consolidated  subsidiaries  as at the  dates  thereof  and the
consolidated  results of their  operations  and cash flows for the periods  then
ended  (subject to normal  year-end  audit  adjustments in the case of unaudited
interim financial statements).

         (j) Absence of Certain  Changes  Since  Balance  Sheet Date.  Since the
Balance  Sheet Date,  the  business  and  operations  of the  Company  have been
conducted in the ordinary course  consistent  with past practice,  and there has
not been:

                  (i) any declaration,  setting aside or payment of any dividend
or other distribution of the assets of the Company with respect to any shares of
capital stock of the Company or any repurchase,  redemption or other acquisition
by the Company or any subsidiary of the Company of any outstanding shares of the
Company's  capital stock;

                                      -5-

<PAGE>

                  (ii) any damage,  destruction or loss,  whether or not covered
by insurance, except for such occurrences,  individually and collectively,  that
have not resulted, and are not expected to result, in a Material Adverse Effect;

                  (iii) any waiver by the  Company  of a valuable  right or of a
material  debt  owed  to  it,  except  for  such   waivers,   individually   and
collectively,  that have not  resulted  and are not  expected  to  result,  in a
Material Adverse Effect;

                  (iv) any material change or amendment to, or any waiver of any
material right under a material  contract or arrangement by which the Company or
any of its  assets  or  properties  is bound or  subject,  except  for  changes,
amendments  or  waivers,  individually  and  collectively,  that  are  expressly
provided for or disclosed in this  Agreement or that have not resulted,  and are
not expected to result, in a Material Adverse Effect;

                  (v) any change by the  Company in its  accounting  principles,
methods or practices or in the manner it keeps its accounting books and records,
except any such change  required by a change in GAAP; or

                  (vi) any other event or condition of any character, except for
such  events and  conditions  that have not  resulted,  and are not  expected to
result, either individually or collectively, in a Material Adverse Effect.

         (k) Invention Assignment and Confidentiality  Agreement.  Each employee
and consultant or independent contractor of the Company whose duties include the
development of products or Intellectual  Property (as defined  below),  and each
former employee and consultant or independent  contractor  whose duties included
the  development  of products or  Intellectual  Property,  has entered  into and
executed an invention assignment and confidentiality agreement in customary form
or an employment or consulting agreement containing substantially similar terms.

         (l) Intellectual Property.

                  (i)  Ownership  or Right to Use. To the best of the  Company's
knowledge,  the Company has sole title to and owns,  or is licensed or otherwise
possesses legally enforceable rights to use, all patents or patent applications,
software, know-how,  registered or unregistered trademarks and service marks and
any applications therefor,  registered or unregistered copyrights,  trade names,
and  any  applications   therefor,   trade  secrets  or  other  confidential  or
proprietary  information  ("Intellectual  Property")  necessary  to  enable  the
Company  to carry on its  business  as  currently  conducted,  except  where any
deficiency, or group of deficiencies, would not have a Material Adverse Effect.

                  (ii) Licenses; Other Agreements.  The Company is not currently
the  licensee  of any  material  portion  of the  Intellectual  Property  of the
Company.  There are not  outstanding  any  licenses  or  agreements  of any kind
relating  to  any  Intellectual  Property  owned  by  the  Company,  except  for
agreements  with customers of the Company entered into in the ordinary course of
the Company's business and other licenses and agreements that, collectively, are
not

                                      -6-

<PAGE>

material. The Company is not obligated to pay any royalties or other payments to
third parties with respect to the marketing,  sale,  distribution,  manufacture,
license or use of any  Intellectual  Property,  except as the  Company may be so
obligated in the ordinary course of its business,  as disclosed in the Company's
SEC Documents (as defined below) or where the aggregate  amount of such payments
could not reasonably be expected to be material.

                  (iii) No Infringement. To the best of the Company's knowledge,
the Company has not  violated or  infringed  and is not  currently  violating or
infringing,  and the Company has not received any  communications  alleging that
the Company (or any of its employees or consultants)  has violated or infringed,
any Intellectual  Property of any other person or entity, to the extent that any
such violation or infringement,  either  individually or together with all other
such violations and infringements, would have a Material Adverse Effect.

                  (iv) Employees and  Consultants.  To the best of the Company's
knowledge,  no employee of or  consultant to the Company is in default under any
term  of  any  employment   contract,   agreement  or  arrangement  relating  to
Intellectual Property of the Company or any non-competition  arrangement,  other
contract or any restrictive  covenant  relating to the Intellectual  Property of
the Company,  where such default,  together with all other such defaults,  would
have a Material Adverse Effect. The Intellectual  Property of the Company (other
than any Intellectual Property duly acquired or licensed from third parties) was
developed  entirely by the employees of or consultants to the Company during the
time they were employed or retained by the Company, and to the best knowledge of
the  Company,  at no time during  conception  or  reduction  to practice of such
Intellectual  Property of the Company  were any such  employees  or  consultants
operating  under any grant from a government  entity or agency or subject to any
employment agreement or invention assignment or non-disclosure  agreement or any
other  obligation with a third party that would  materially and adversely affect
the  Company's  rights  in  the  Intellectual  Property  of  the  Company.  Such
Intellectual  Property of the Company  does not,  to the best  knowledge  of the
Company,  include any invention or other intellectual property of such employees
or  consultants  made  prior to the time  such  employees  or  consultants  were
employed  or  retained  by the  Company  nor any  intellectual  property  of any
previous employer of such employees or consultants nor the intellectual property
of any other person or entity.

         (m)  Registration  Rights.   Except  as  provided  in  this  Agreement,
effective upon the Closing, the Company is not currently subject to any grant or
agreement  to grant to any  person or entity  any  rights  (including  piggyback
registration  rights) to have any securities of the Company  registered with the
SEC or registered or qualified with any other governmental authority.

         (n) Title to Property  and  Assets.  The  properties  and assets of the
Company  are  owned by the  Company  free and clear of all  mortgages,  deeds of
trust, liens, charges,  encumbrances and security interests except for statutory
liens for the payment of current  taxes that are not yet  delinquent  and liens,
encumbrances  and  security  interests  that  arise in the  ordinary  course  of
business and do not in any material  respect affect the properties and assets of
the Company.  With respect to the property and assets it leases,  the Company is
in compliance with such leases in all material respects.

                                      -7-

<PAGE>

         (o) Tax  Matters.  The  Company  has filed  all  material  tax  returns
required  to be  filed,  which  returns  are true and  correct  in all  material
respects,  and the  Company  is not in default  in the  payment  of such  taxes,
including  penalties and interest,  assessments,  fees and other charges,  other
than those being  contested in good faith and for which  adequate  reserves have
been  provided or those  currently  payable  without  interest that were payable
pursuant to said returns or any assessments with respect thereto.

         (p) Full Disclosure.  The information contained in this Agreement,  the
Disclosure   Letter  and  the  SEC  Documents  with  respect  to  the  business,
operations,  assets,  results  of  operations  and  financial  condition  of the
Company,  and the  transactions  contemplated  by this  Agreement , are true and
complete in all material  respects and do not omit to state any material fact or
facts  necessary  in  order  to make  the  statements  therein,  in light of the
circumstances under which they were made, not misleading.

         (q) Finder's Fee. The Company  neither is nor will be obligated for any
finder's or broker's fee or commission in connection with this transaction.

         (r) Year 2000  Compliance.  All of the  Company's  products  (including
products currently under  development) are Year 2000 Compliant.  For purposes of
this Agreement, "Year 2000 Compliant" means, to the extent products are designed
to (i) record,  store,  process and calculate and present calendar dates falling
on and after January 1, 2000, and (ii) calculate any information dependent on or
relating  to such  dates,  they will do so in the same  manner and with the same
functionality,  data integrity, and performance as those products record, store,
process and calculate and present  calendar dates falling on and before December
31, 1999, and calculate any  information  dependent on or related to such dates.
None of the Company's material products will lose any functionality with respect
to the  introduction of records  containing dates falling on or after January 1,
2000.  All  of  the  Company's  internal  computer  systems,  including  without
limitation, its accounting systems, are Year 2000 Compliant.

         (s) Small Business  Concern.  The Company is a "small business concern"
within the meaning of the federal  Small  Business  Investment  Act of 1958,  as
amended, and the regulations thereunder,  and Part 121 of the United States Code
of Federal  Regulations.  The  information  set forth on SBA Forms 480, 652D and
1031  furnished  by the  Company  to  the  Investors  that  are  Small  Business
Investment  Companies  (each, an "SBIC") is complete and correct in all material
respects.  Furthermore,  as long as any SBIC is an investor in the Company,  the
Company will provide the SBIC any  information  that is reasonably  requested by
the  Small  Business  Administration  ("SBA").  The  Company  will  provide  SBA
examiners  access to its books and records for SBA audit  purposes in accordance
with ordinary SBA procedures.

         (t)  Real  Property  Holding  Corporation.  The  Company  is not a real
property holding corporation within the meaning of Internal Revenue Code Section
897(c)(2) and any regulations promulgated thereunder.

     4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF EACH INVESTOR.

                                      -8-

<PAGE>

         Each  Investor  hereby  severally,  and  not  jointly,  represents  and
warrants to the Company,  and agrees that:

         (a)  Organization  Good  Standing  and  Qualification.  The Investor is
either

                  (i) a corporation duly organized, validly existing and in good
standing  under the laws of the state or nation  indicated  on Exhibit A and has
all  corporate  power and  authority  required  to (A) carry on its  business as
presently conducted, and (B) enter into this Agreement and the other agreements,
instruments   and  documents   contemplated   hereby,   and  to  consummate  the
transactions contemplated hereby and thereby, or

                  (ii) a partnership  duly  organized,  validly  existing and in
good  standing  under the laws of the state  indicated  on Exhibit A and has all
power  and  authority  required  to (A)  carry  on  its  business  as  presently
conducted,  and  (B)  enter  into  this  Agreement  and  the  other  agreements,
instruments   and  documents   contemplated   hereby,   and  to  consummate  the
transactions contemplated hereby and thereby.

         The Investor is  qualified  to do business  and is in good  standing in
each  jurisdiction  in which the  failure  to so  qualify  would have a Material
Adverse Effect.

         (b)  Authorization.  This  Agreement  has been duly  authorized  by all
necessary  corporate or partnership  action,  as applicable,  on the part of the
Investor.  This Agreement  constitutes the Investor's  legal,  valid and binding
obligation,  enforceable in accordance with its terms,  except as may be limited
by (i)  applicable  bankruptcy,  insolvency,  reorganization  or  other  laws of
general  application  relating to or affecting  the  enforcement  of  creditors'
rights  generally and (ii) the effect of rules of law governing the availability
of equitable  remedies.  Each Investor  has, as  applicable,  full  corporate or
partnership power and authority to enter into this Agreement.

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

         (d) Non-Contravention.  The execution, delivery and performance of this
Agreement  by  the  Investor,  and  the  consummation  by  the  Investor  of the
transactions contemplated hereby, do not and will not (i) contravene or conflict
with the Certificate of Incorporation,  Bylaws, or the Partnership  Agreement or
comparable governing document, as applicable, of the Investor; (ii) constitute a
violation of any provision of any federal,  state,  local or foreign law binding
upon or applicable to the Investor; or (iii) constitute a default or require any
consent  under,  give  rise  to  any  right  of  termination,   cancellation  or
acceleration  of, or to a loss of any benefit to which the  Investor is entitled
under, or result in the creation or imposition of any lien, claim or encumbrance
on any

                                       -9-

<PAGE>

assets of the Investor  under,  any contract to which the Investor is a party or
any permit,  license or similar  right  relating to the Investor or by which the
Investor may be bound or affected in such a manner as,  together  with all other
such matters, would have a Material Adverse Effect.

         (e)  Litigation.  There is no Action pending  against the Investor that
seeks to prevent,  enjoin, alter or delay the transactions  contemplated by this
Agreement.

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

         (g) Investment  Experience.  The Investor understands that its purchase
of the  Purchased  Shares to be purchased by the Investor  involves  substantial
risk.  The Investor has experience as an investor in securities of companies and
acknowledges  that it is able to fend for itself,  can bear the economic risk of
its investment in the Purchased  Shares and has such knowledge and experience in
financial or business  matters that it is capable of  evaluating  the merits and
risks  of  this  investment  in the  Purchased  Shares  and  protecting  its own
interests in connection with this investment.

         (h)  Accredited   Investor  Status.  The  Investor  is  an  "accredited
investor"  within the meaning of Regulation D promulgated  under the  Securities
Act.

         (i) Restricted Securities.  The Investor understands that the Purchased
Shares are  characterized as "restricted  securities"  under the Securities Act,
inasmuch  as they are being  acquired  from the  Company  in a  transaction  not
involving a public  offering and that under the  Securities  Act and  applicable
regulations  thereunder such securities may be resold without registration under
the  Securities  Act only in certain  limited  circumstances.  The  Investor  is
familiar with Rule 144 of the SEC, as presently in effect,  and  understands the
resale limitations imposed thereby and by the Securities Act.

         (j)  Legends.  The  Investor  agrees  that  the  certificates  for  the
Purchased Shares shall bear the following legend:

         "The shares  represented by this  certificate  have not been registered
under the Securities Act of 1933 or with any state  securities  commission,  and
may  not be  transferred  or  disposed  of by the  holder  in the  absence  of a
registration  statement  which is effective under the Securities Act of 1933 and
applicable state laws and rules, or, unless,  immediately  prior to the time set
for transfer,  such transfer may be effected without violation of the Securities
Act of 1933 and other applicable state laws and rules."

         In  addition,  the  Investor  agrees  that the  Company  may place stop
transfer orders with its transfer agents with respect to such certificates.  The
appropriate  portion of the legend and the stop

                                      -10-

<PAGE>

transfer  orders will be removed  promptly  upon delivery to the Company of such
satisfactory  evidence as  reasonably  may be required by the Company  that such
legend or stop orders are not required to ensure  compliance with the Securities
Act.

         (k) Finder's Fee. The Investor neither is nor will be obligated for any
finder's or broker's fee or commission in connection with this transaction.

         5. CONDITIONS TO EACH INVESTOR'S OBLIGATIONS AT CLOSING.

         (a) The  obligations  of each Investor  under  Sections l and 2 of this
Agreement are subject to the fulfillment or waiver,  on or before the respective
Closing, of each of the following conditions:

                  (i)   Representations   and  Warranties   True.  Each  of  the
representations  and  warranties  of the Company  contained in Section 3 will be
true and  correct in all  material  respects on and as of the date hereof and on
and as of the date of the Closing,  except as set forth in the Disclosure Letter
or the SEC Documents,  with the same effect as though such  representations  and
warranties had been made as of the Closing.

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

                  (iii)  Securities  Exemptions.  The  offer  and  sale  of  the
Purchased Shares to each Investor pursuant to this Agreement will be exempt from
the registration  requirements of the Securities Act and the registration and/or
qualification requirements of all applicable state securities laws.

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

                  (v) Certified Charter Documents. A copy of (1) the Certificate
of  Incorporation  certified  as of a recent date by the  Secretary  of State of
Delaware  as a  complete  and  correct  copy  thereof,  (2) the  Certificate  of
Designations certified as of a recent date by the Secretary of State of Delaware
and (3) the Bylaws of the Company (as amended  through the date of the  Closing)
certified by the  Secretary of the Company as a true and correct copy thereof as
of the Closing.

                  (vi) Board Resolutions.  A copy, certified by the Secretary of
the  Company,  of the  resolutions  of the  Board of  Directors  of the  Company
providing  for the approval of

                                      -11-

<PAGE>

this  Agreement and the issuance of the  Purchased  Shares and the other matters
contemplated hereby.

                  (vii)  Opinion of Company  Counsel.  Each  Investor  will have
received  an  opinion  on  behalf  of the  Company,  dated as of the date of the
Closing,  from Wilson Sonsini Goodrich & Rosati,  counsel to the Company, in the
form attached as Exhibit C.

                  (viii) No Material Adverse Effect. Between the date hereof and
the Closing, there shall not have occurred any Material Adverse Effect.

                  (ix) Nasdaq Requirements. The Company shall have satisfied all
requirements  of the Nasdaq Stock Market  Marketplace  Rules with respect to the
issuance of the Purchased Shares.

                  (x) Other  Actions.  The  Company  shall  have  executed  such
certificates,  agreements, instruments and other documents, and taken such other
actions as shall be  customary  or  reasonably  requested  by each  Investor  in
connection with the transactions contemplated hereby.

     6.  CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING.

         The  obligations  of the Company to each Investor  under this Agreement
are subject to the fulfillment or waiver,  on or before the Closing,  of each of
the  following   conditions:

         (a)  Representations  and  Warranties  True.  The  representations  and
warranties of each  Investor  contained in Section 4 will be true and correct in
all material  respects on and as of the date hereof and on and as of the date of
the Closing.

         (b)  Performance.  Each Investor will have  performed and complied with
all agreements,  obligations and conditions contained in this Agreement that are
required to be  performed  or  complied  with by it on or before the Closing and
will have  obtained  all  approvals,  consents and  qualifications  necessary to
complete the purchase and sale described herein.

         (c) Payment of Purchase Price. Each Investor will have delivered to the
Company  at the  Closing  the full  purchase  price of the  Purchased  Shares as
specified in Section 1(b).

         (d) Securities  Exemptions.  The offer and sale of the Purchased Shares
to each Investor pursuant to this Agreement will be exempt from the registration
requirements  of the Securities Act and the  registration  and/or  qualification
requirements of all applicable state securities laws.

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

                                      -12-

<PAGE>

         (f)  Nasdaq  Requirements.  If  required  by the  Nasdaq  Stock  Market
Marketplace  Rules,  the  Company  shall  have  obtained  the  approval  of  its
shareholders to the issuance of the Purchased Shares.

         (g) Other Actions. Each Investor shall have executed such certificates,
agreements,  instruments  and other  documents,  and taken such other actions as
shall be customary or reasonably requested by the Company in connection with the
transactions contemplated hereby.

     7. COVENANTS OF THE PARTIES.

         (a) Information Rights.

                  (i) Financial  Information.  The Company  covenants and agrees
that,  commencing  on the Closing and  continuing  for so long as each  Investor
holds any Purchased Shares, the Company shall:

                           (1) Annual Reports. Furnish to each Investor promptly
following the filing of such report with the SEC a copy of the Company's  Annual
Report on Form 10-K SB for each fiscal year,  which shall include a consolidated
balance  sheet as of the end of such fiscal  year, a  consolidated  statement of
income  and a  consolidated  statement  of cash  flows  of the  Company  and its
subsidiaries  for such year,  setting forth in each case in comparative form the
figures from the Company's previous fiscal year, all prepared in accordance with
generally accepted accounting principles and practices and audited by nationally
recognized  independent  certified public accountants.  In the event the Company
shall no longer be required to file Annual  Reports on Form 10-K SB, the Company
shall, within ninety (90) days following the end of each respective fiscal year,
deliver to each Investor a copy of such balance sheets, statements of income and
statements of cash flows, or such form that replaces Form 10-K SB.

                           (2)  Quarterly  Reports.  Furnish  to  each  Investor
promptly following the filing of such report with the SEC, a copy of each of the
Company's  Quarterly Reports on Form 10-Q SB, which shall include a consolidated
balance  sheet  as of the end of the  respective  fiscal  quarter,  consolidated
statements  of income and  consolidated  statements of cash flows of the Company
and its subsidiaries for the respective fiscal quarter and for the year to-date,
setting forth in each case in  comparative  form the figures from the comparable
periods in the  Company's  immediately  preceding  fiscal year,  all prepared in
accordance with generally accepted accounting  principles and practices (except,
in the case of any Form 10-Q SB, as may otherwise be permitted by Form 10-Q SB),
but all of which may be  unaudited.  In the event the Company shall no longer be
required to file Quarterly  Reports on Form 10-Q SB, the Company  shall,  within
forty-five  (45) days  following  the end of each of the first  three (3) fiscal
quarters of each fiscal  year,  deliver to each  Investor a copy of such balance
sheets, statements of income and statements of cash flows.

                  (ii) SEC Filings.  The Company  shall deliver to each Investor
copies of each other  document  filed with the SEC on a  non-confidential  basis
promptly  following the filing of such  document with the SEC.

                                      -13-

<PAGE>

         (b) Registration Rights.

                  (i) Definitions. For purposes of this Section 7(b):

                           (1) Registration. The terms "register," "registered,"
and  "registration"  refer to a registration  effected by preparing and filing a
registration  statement  in  compliance  with the  Securities  Act of  1933,  as
amended,   (the   "Securities   Act"),   and  the  declaration  or  ordering  of
effectiveness of such  registration  statement

                           (2)  Registrable  Securities.  The term  "Registrable
Securities"  means:  (x) the Purchased  Shares and any shares of Common Stock of
the Company issued or issuable upon conversion of the Purchased Shares,  and (y)
any shares of Common  Stock of the  Company or other  securities  of the Company
issued as (or issuable upon the conversion or exercise of any warrant,  right or
other security that is issued as) a dividend or other  distribution with respect
to, or in exchange for or in replacement of, any of the securities  described in
the   immediately   preceding   Clause  (x).   Notwithstanding   the  foregoing,
"Registrable  Securities"  shall exclude any  Registrable  Securities  sold by a
person in a transaction in which rights under this Section 7(b) are not assigned
in accordance with this Agreement or any Registrable Securities sold in a public
offering,  whether sold pursuant to Rule 144  promulgated  under the  Securities
Act, or in a registered offering, or otherwise.

                           (3)  Registrable  Securities  Then  Outstanding.  The
number of shares of  "Registrable  Securities then  outstanding"  shall mean the
number  of  shares  of  Purchased  Shares,  shares  of  Common  Stock  and other
securities that are Registrable Securities and are then issued and outstanding.

                           (4) Holder.  For purposes of this Section 7, the term
"Holder" means any person owning of record Registrable  Securities that have not
been sold to the public or pursuant to Rule 144 promulgated under the Securities
Act or any permitted  assignee of record of such Registrable  Securities to whom
rights under this Section 7(b) have been duly assigned in  accordance  with this
Agreement.

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

                  (ii) Demand Registration.

                           (1) Request by Holders.  If (i) the Company  shall at
any time after the one  hundred  and  twentieth  (120th)  day after the  Closing
receive a written  request from the Holders of at least fifty  percent  (50%) of
the  Series B  Preferred  issued  as of the  Closing,  that the  Company  file a
registration statement under the Securities Act (including,  without limitation,
a "shelf"  registration  statement,  if  requested by such  Holders,  during any
period of time that Rule 144 is not  available as an exemption for the sale in a
single 90-day period of all of the Registrable

                                      -14-

<PAGE>

Securities that any such Holder desires to sell, in which case the Company would
maintain the  effectiveness  of such "shelf"  registration  statement  until the
earlier of the first  anniversary  of the  effectiveness  thereof or the date on
which all such  Registrable  Securities could be sold under Rule 144 in a single
90-day period) covering the registration of Registrable Securities, and (ii) the
expected  gross  proceeds  of the  sale of  Registrable  Securities  under  such
registration statement would equal or exceed $2,000,000, then the Company shall,
within ten (10)  business  days of the  receipt of such  written  request,  give
written  notice of such  request  ("Request  Notice")  to all  Holders,  and use
commercially  reasonable  efforts  to  effect,  as  soon  as  practicable,   the
registration under the Securities Act of all Registrable Securities that Holders
request to be registered  and included in such  registration  by written  notice
given such Holders to the Company  within  twenty (20) days after receipt of the
Request Notice,  subject only to the limitations of this Section 7(b);  provided
that the Company shall not be obligated to effect any such  registration  if the
Company has, within the six (6) month period preceding the date of such request,
already  effected a  registration  under the  Securities Act pursuant to Section
7(b)(iii),  other than a registration  from which the Registrable  Securities of
Holders have been excluded with respect to all or any portion of the Registrable
Securities the Holders requested be included in such registration.  If requested
by such Holders upon the advice of the  underwriter,  the Company shall register
such Registrable Securities on Form S-1 or any successor registration form.

                           (2)  Underwriting.  If  the  Holders  initiating  the
registration request under this Section 7(b)(ii)  ("Initiating  Holders") intend
to distribute the Registrable Securities covered by their request by means of an
underwriting,  then they shall so advise the Company as a part of their request,
and the Company shall include such information in the written notice referred to
in Section 7(b)(ii)(A). In such event, the right of any Holder to include his or
her Registrable  Securities in such registration  shall be conditioned upon such
Holder's  participation in such  underwriting and the inclusion of such Holder's
Registrable  Securities in the underwriting (unless otherwise mutually agreed by
a majority  in  interest of the  initiating  Holders and such Holder  determined
based  on the  number  of  Registrable  Securities  held by such  Holders  being
registered).  All Holders proposing to distribute their securities  through such
underwriting  shall enter into an underwriting  agreement in customary form with
the managing  underwriter or underwriters  selected for such underwriting by the
Holders  of a  majority  of the  Registrable  Securities  being  registered  and
reasonably  acceptable to the Company (including a market stand-off agreement of
up to 180 days if  required  by such  underwriters).  Notwithstanding  any other
provision of this Section 7(b)(ii), if the underwriter(s)  advise(s) the Company
in  writing  that  marketing  factors  require  a  limitation  of the  number of
securities  to be  underwritten  then the Company shall so advise all Holders of
Registrable  Securities  that would  otherwise be  registered  and  underwritten
pursuant hereto,  and the number of Registrable  Securities that may be included
in the  underwriting  shall be reduced as  required  by the  underwriter(s)  and
allocated  among the  Holders  of  Registrable  Securities  on a pro rata  basis
according to the number of Registrable  Securities then outstanding held by each
Holder requesting  registration  (including the Initiating  Holders);  provided,
however,  that the number of shares of Registrable  Securities to be included in
such  underwriting  and  registration  shall  not be  reduced  unless  all other
securities of the Company and any selling security holder other than the Holders
are  first  entirely  excluded  from  the  underwriting  and  registration.  Any
Registrable  Securities  excluded and withdrawn from such underwriting  shall be
withdrawn from the registration.

                           -15-

<PAGE>

                           (3)  Maximum  Number  of  Demand  Registrations.  The
Company shall be obligated to effect only one (1) such registration  pursuant to
this Section 7(b)(ii).

                           (4) Deferral.  Notwithstanding the foregoing,  if the
Company  shall  furnish  to  Holders  requesting  the  filing of a  registration
statement  pursuant  to  this  Section  7(b)(ii)  a  certificate  signed  by the
President  or Chief  Executive  Officer of the Company  stating that in the good
faith judgment of the Board,  it would be materially  detrimental to the Company
and its  stockholders  for such  registration  statement  to be filed,  then the
Company  shall have the right to defer such filing for a period of not more than
ninety  (90) days  after  receipt  of the  request  of the  initiating  Holders;
provided, however, that the Company may not utilize this right more than once in
any twelve (12) month period.

                           (5)  Expenses.  All expenses  incurred in  connection
with any  registration  pursuant to this  Section  7(b)(ii),  including  without
limitation  all federal and "blue sky"  registration,  filing and  qualification
fees,  printer's and accounting fees, and fees and  disbursements of counsel for
the Company (but excluding  underwriters'  discounts and commissions relating to
shares  sold by the  Holders),  shall  be  borne  by the  Company.  Each  Holder
participating  in a  registration  pursuant to this Section  7(b)(ii) shall bear
such Holder's  proportionate  share (based on the total number of shares sold in
such  registration  other than for the account of the Company) of all discounts,
commissions or other amounts  payable to  underwriters  or brokers in connection
with such offering by the Holders.  Notwithstanding  the foregoing,  the Company
shall not be required to pay for any  expenses  of any  registration  proceeding
begun  pursuant  to  this  Section  7(b)(ii)  if  the  registration  request  is
subsequently  withdrawn  at the  request of the  Holders  of a  majority  of the
Registrable  Securities  to be  registered,  unless the Holders of such majority
agree  that such  registration  constitutes  the use by the  Holders  of one (1)
demand  registration  pursuant  to this  Section  7(b)(ii)  (in which  case such
registration  shall  also  constitute  the  use by all  Holders  of  Registrable
Securities of one (l) such demand registration); provided further, however, that
if at the time of such  withdrawal,  the  Holders  have  learned  of a  Material
Adverse  Effect not known to the  Holders at the time of their  request for such
registration and have withdrawn their request for registration after learning of
such material adverse change,  then the Holders shall not be required to pay any
of such expenses and such registration  shall not constitute the use of a demand
registration pursuant to this Section 7(b)(ii).

                  (iii)  Piggyback  Registrations.  The Company shall notify all
Holders of Registrable  Securities in writing at least thirty (30) days prior to
filing any  registration  statement  under the  Securities  Act for  purposes of
effecting a public  offering of  securities of the Company  (including,  but not
limited  to,   registration   statements  relating  to  secondary  offerings  of
securities of the Company, but excluding registration statements relating to any
employee benefit plan or any merger or other corporate  reorganization) and will
afford each such Holder an opportunity to include in such registration statement
all or any part of the  Registrable  Securities  then held by such Holder.  Each
Holder desiring to include in any such registration statement all or any part of
the  Registrable  Securities  held by such Holder shall within  twenty (20) days
after  receipt of the  above-described  notice from the  Company,  so notify the
Company in writing, and in such notice shall inform the Company of the number of
Registrable  Securities  such  Holder  wishes to  include  in such  registration

                                      -16-

<PAGE>

statement.  If a Holder decides not to include all of its Registrable Securities
in any registration statement thereafter filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its  securities,  all upon the terms
and conditions set forth herein.

                           (1) Underwriting.  If a registration  statement under
which  the  Company  gives  notice  under  this  Section  7(b)(iii)  is  for  an
underwritten  offering,  then  the  Company  shall  so  advise  the  Holders  of
Registrable  Securities.   In  such  event,  the  right  of  any  such  Holder's
Registrable  Securities to be included in such a registration  pursuant shall be
conditioned  upon  such  Holder's  participation  in such  underwriting  and the
inclusion of such Holder's  Registrable  Securities in the  underwriting  to the
extent provided herein.  All Holders  proposing to distribute their  Registrable
Securities through such underwriting shall enter into an underwriting  agreement
in customary  form with the managing  underwriter or  underwriters  selected for
such underwriting  (including a market stand-off  agreement of up to 180 days if
required  by  such  underwriters);  provided,  however,  that  it  shall  not be
considered  customary  to require any of the Holders to provide  representations
and warranties  regarding the Company or indemnification of the underwriters for
material  misstatements or omissions in the registration statement or prospectus
for such offering. Notwithstanding any other provision of this Agreement, if the
managing underwriter determine(s) in good faith that marketing factors require a
limitation  of the  number  of  shares  to be  underwritten,  then the  managing
underwriter(s)  may exclude shares from the registration  and the  underwriting;
provided;  however,  that the securities to be included in the  registration and
the  underwriting  shall  be  allocated,  (1)  first to the  Company  (provided,
however,  that a minimum of twenty  percent  (20%) of the number of  Registrable
Securities that each holder of ten percent (10%) or more of the then outstanding
Common Stock  (where any  Registrable  Securities  that are not shares of Common
Stock but are exercisable or exchangeable  for, or convertible  into,  shares of
Common Stock, shall be deemed to have been so exercised,  exchanged or converted
for such purpose) must also in any event be included), (2) second, to the extent
the managing underwriter  determines additional securities can be included after
compliance  with  Clause  (1),  to each of the  Holders  and  other  holders  of
registration  rights on a parity with the Holders requesting  inclusion of their
Registrable  Securities in such registration statement on a pro rata basis based
on the total number of Registrable  Securities and other securities  entitled to
registration  then held by each such Holder or other holder,  and (3) third,  to
the extent the managing  underwriter  determines  additional  securities  can be
included  after  compliance  with  Clauses  (1) and  (2),  any  shares  or other
securities  held by any person who is an  employee,  officer or  director of the
Company (or any subsidiary of the Company) or any other person.  Any Registrable
Securities  excluded or withdrawn from such  underwriting  shall be excluded and
withdrawn  from the  registration.  For any Holder  that is a  partnership,  the
Holder and the partners and retired partners of such Holder,  or the estates and
family members of any such partners and retired  partners and any trusts for the
benefit  of  any of  the  foregoing  persons,  and  for  any  Holder  that  is a
corporation, the Holder and all corporations that are affiliates of such Holder,
shall be deemed to be a single "Holder," and any pro rata reduction with respect
to such  "Holder"  shall be based upon the aggregate  amount of shares  carrying
registration  rights  owned by all  entities  and  individuals  included in such
"Holder," as defined in this sentence.

                                      -17-

<PAGE>

                           (2)  Expenses.  All expenses  incurred in  connection
with a registration pursuant to this Section 7(b)(iii) (excluding  underwriters'
and brokers' discounts and commissions  relating to shares sold by the Holders),
including,  without limitation all federal and "blue sky"  registration,  filing
and   qualification   fees,   printers'  and  accounting   fees,  and  fees  and
disbursements of counsel for the Company, shall be borne by the Company.

                           (3) Not Demand Registration. Registration pursuant to
this  Section  7(b)(iii)  shall  not be deemed  to be a demand  registration  as
described in Section 7(b)(ii) above. Except as otherwise provided herein,  there
shall be no limit on the number of times the Holders may request registration of
Registrable Securities under this Section 7(b)(iii).

                  (iv)  Form  S-3  Registration.   The  Company  shall  use  all
reasonable  commercial  efforts,  on or prior to the one hundred  and  twentieth
(120th)  day after the date of Closing,  cause to be filed and become  effective
with  the SEC a  Registration  Statement  on  Form  S-3  relating  to all of the
Registrable  Securities  (in  the  event  such  registration  statement  is  not
effective at the expiration of such 120-day  period,  the Company shall continue
to use all reasonable  commercial  efforts to cause it to become effective until
it  becomes  effective);  provided;  however,  that in the event Form S-3 is not
available  to the  Company,  the  Company  shall  file such other form as may be
available if Holders who hold  Registrable  Securities with a market value of at
least One Million Dollars  ($1,000,000) deliver a written request to the Company
that the Company do so, where such market value is  determined as of the date of
such written  request.  The Company shall use its best efforts to cause any such
Registration  Statement to become  effective as promptly as possible  after such
filing and shall also use its best efforts to obtain any related qualifications,
registrations  or other  compliances  that may be necessary under any applicable
"blue sky" laws. In connection with such registration, the Company will:

                           (1)  Notice.  Promptly  give  written  notice  to the
Holders  of  the  proposed   registration  and  any  related   qualification  or
compliance; and

                           (2)  Registration.  Prior  to  the  one  hundred  and
twentieth (120th) day after the day of Closing, effect such registration and all
such  qualifications  and compliances and as would permit or facilitate the sale
and distribution of all or such portion of such Holders or Holders'  Registrable
Securities; provided, however, that the Company shall not be obligated to effect
any such  registration,  qualification  or  compliance  pursuant to this Section
7(b)(iv) in any particular  jurisdiction  in which the Company would be required
to qualify to do business or to execute a general  consent to service of process
in effecting such registration, qualification or compliance.

                           (3)  Expenses.  The  Company  shall pay all  expenses
incurred in connection with each registration requested pursuant to this Section
7(b)(iv), excluding underwriters' or brokers' discounts and commissions relating
to shares sold by the Holders,  including without  limitation  federal and "blue
sky" registration, filing and qualification fees, printers' and accounting fees,
and fees and disbursements of counsel.

                                      -18-

<PAGE>

                           (4) Deferral.  Notwithstanding the foregoing,  if the
Company  shall  furnish  to  Holders  requesting  the  filing of a  registration
statement  pursuant  to this  Section  7(b)(iv),  a  certificate  signed  by the
President  or Chief  Executive  Officer of the Company  stating that in the good
faith judgment of the Board,  it would be materially  detrimental to the Company
and its  stockholders  for such  registration  statement  to be filed,  then the
Company  shall have the right to defer such filing for a period of not more than
ninety  (90) days  after  receipt  of the  request  of the  initiating  Holders;
provided, however, that the Company may not utilize this right more than once in
any  twelve  (12)  month  period,  and the  period of time that the  Company  is
obligated to maintain the  effectiveness  of any  registration  statement  under
Clause  (F)  below  shall be  extended  for the  length  of any such  period  of
deferral.

                           (5) Not Demand  Registration.  Form S-3 registrations
shall not be deemed to be demand  registrations as described in Section 7(b)(ii)
above.

                           (6)   Maintenance.   The   Company   shall   use  all
commercially  reasonable  efforts to maintain the  effectiveness of any Form S-3
registration  statement filed under this Section  7(b)(iv) until the earlier of:
(a) the date on which all of the Registrable  Securities have been sold; and (b)
the second anniversary of the Closing; provided, however, that unless all of the
Registrable Securities held by each Investor as of such second anniversary could
then be sold in a single  transaction  in  accordance  with  Rule 144  under the
Securities Act without exceeding the volume limitations  thereof, if the Company
receives  written  notice from each Investor that each Investor may be deemed to
be an "affiliate" of the Company for purposes of the Securities Act, the date in
this Clause (b) shall be extended  until each Investor  advises the Company that
it no longer has any reasonable basis to believe it is such an "affiliate."

                  (v)  Obligations of the Company.  Whenever  required to effect
the registration of any Registrable  Securities under this Agreement the Company
shall, as expeditiously as reasonably possible:

                           (1) Registration Statement. Prepare and file with the
SEC a registration statement with respect to such Registrable Securities and use
commercially  reasonable efforts to cause such registration  statement to become
effective;  provided,  however,  that,  except as otherwise  required by in this
Section 7(b),  the Company  shall not be required to keep any such  registration
statement effective for more than ninety (90) days.

                           (2) Amendments and Supplements. Prepare and file with
the SEC such amendments and supplements to such  registration  statement and the
prospectus  used  in  connection  with  such  registration  statement  as may be
necessary to comply with the  provisions of the  Securities  Act with respect to
the disposition of all securities covered by such registration statement.

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

                                      -19-

<PAGE>

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

                           (5)  Underwriting.  In the event of any  underwritten
public  offering,  enter into and perform its obligations  under an underwriting
agreement in usual and customary form (including, without limitation,  customary
indemnification  of  the  underwriters  by  the  Company),   with  the  managing
underwriter(s) of such offering.  Each Holder participating in such underwriting
shall also enter  into and  perform  its  obligations  under such an  agreement;
provided,  however,  that it shall not be considered customary to require any of
the Holders to provide  representations and warranties  regarding the Company or
indemnification  of the underwriters for material  misstatements or omissions in
the registration statement or prospectus for such offering.

                           (6)  Notification.  Notify each Holder of Registrable
Securities covered by such registration  statement at any time when a prospectus
relating  thereto is required to be delivered  under the  Securities  Act of the
happening  of any  event as a result of which the  prospectus  included  in such
registration  statement,  as then in effect,  includes an untrue  statement of a
material fact or omits to state a material fact required to be stated therein or
necessary  to make the  statements  therein not  misleading  in the light of the
circumstances then existing.

(7) Opinion and Comfort Letter.  Furnish, at the request of any Holder
requesting  registration  of  Registrable  Securities,  on the  date  that  such
Registrable  Securities  are  delivered to the  underwriters  for sale,  if such
securities are being sold through  underwriters,  or, if such securities are not
being sold through  underwriters,  on the date that the  registration  statement
with respect to such securities becomes effective,  (i) an opinion,  dated as of
such date,  of the counsel  representing  the  Company for the  purposes of such
registration,  in form and substance as is customarily  given to underwriters in
an  underwritten  public  offering and reasonably  satisfactory to a majority in
interest of the Holders requesting registration,  addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities and
(ii) in the event that such  securities are being sold through  underwriters,  a
"comfort"  letter dated as of such date, from the independent  certified  public
accountants  of the Company,  in form and substance as is  customarily  given by
independent  certified  public  accountants to  underwriters  in an underwritten
public  offering and  reasonably  satisfactory  to a majority in interest of the
Holders  requesting  registration,  addressed  to  the  underwriters  and to the
Holders  requesting  registration  of  Registrable   Securities.

                  (vi) Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to Sections 7(b)(ii),
(iii) or (iv)  that the  selling  Holders  shall  furnish  to the  Company  such
information regarding themselves,  the Registrable  Securities held by them, and
the intended  method of disposition  of such  securities as shall be required to
timely effect the registration of their Registrable Securities.

                  (vii) Indemnification. In the event any Registrable Securities
are included in a registration statement under Sections 7(b)(ii), (iii) or (iv):

                                      -20-

<PAGE>

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

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

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

                                    (z) any  violation  or alleged  violation by
the  Company of the  Securities  Act,  the  Exchange  Act,  any federal or state
securities law or any Rule or regulation  promulgated  under the Securities Act,
the Exchange Act or any federal or state  securities law in connection  with the
offering covered by such registration statement;

         and the Company  will  reimburse  each such Holder,  partner,  officer,
shareholder,  employee,  representative,  director,  underwriter  or controlling
person for any legal or other expenses reasonably incurred by them, as incurred,
in connection  with  investigating  or defending any such loss,  claim,  damage,
liability or action;  provided,  however, that the indemnity agreement contained
in this  subsection  shall not apply to amounts paid in  settlement  of any such
loss, claim, damage,  liability or action if such settlement is effected without
the consent of the Company (which consent shall not be  unreasonably  withheld),
nor shall the  Company  be  liable  in any such case for any such  loss,  claim,
damage, liability or action to the extent that it arises out of or is based upon
a  Violation  that  occurs  in  reliance  upon and in  conformity  with  written
information  furnished expressly for use in connection with such registration by
such Holder, partner, officer, shareholder, employee, representative,  director,
underwriter or controlling person of such Holder.

                           (2) By Selling  Holders.  To the extent  permitted by
law, each selling Holder will  indemnify and hold harmless the Company,  each of
its directors,  each of its officers who have signed the registration statement,
each  person,  if any,  who  controls  the  Company  within  the  meaning of the
Securities Act, any underwriter  and any other Holder selling  securities  under
such registration  statement or any of such other Holder's  partners,  officers,
shareholders,  employees,  representatives  and  directors  and any  person  who
controls  such Holder within the meaning of the  Securities  Act or the Exchange
Act, against any losses,  claims,  damages or liabilities  (joint or several) to
which  the  Company  or  any  such  officer  or  director,  controlling  person,
underwriter  or other such  Holder,  partner,  officer,  shareholder,  employee,
representative,  director or controlling  person of such other Holder may become
subject under the Securities Act, the Exchange

                                      -21-

<PAGE>

Act or other federal or state law,  insofar as such losses,  claims,  damages or
liabilities  (or actions in respect  thereto) arise out of or are based upon any
Violation,  in each  case to the  extent  (and  only to the  extent)  that  such
Violation  occurs in reliance  upon and in conformity  with written  information
furnished by such Holder expressly for use in connection with such registration;
and each such  Holder  will  reimburse  any legal or other  expenses  reasonably
incurred by the Company or any such  officer or  director,  controlling  person,
underwriter  or  other  Holder,   partner,   officer,   shareholder,   employee,
representative,   director  or  controlling  person  of  such  other  Holder  in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability or action:  provided,  however, that the indemnity agreement contained
in this  subsection  shall not apply to amounts paid in  settlement  of any such
loss, claim, damage,  liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld; and
provided further,  that the total amounts payable in indemnity by a Holder under
this  subsection or otherwise in respect of any  Violation  shall not exceed the
net  proceeds  received by such Holder in the  registered  offering out of which
such Violation arises.

                           (3) Notice.  Promptly after receipt by an indemnified
party  under  of  notice  of the  commencement  of  any  action  (including  any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this section,  deliver to the
indemnifying  party  a  written  notice  of the  commencement  thereof  and  the
indemnifying  party shall have the right to  participate  in, and, to the extent
the indemnifying  party so desires,  jointly with any other  indemnifying  party
similarly  noticed,   to  assume  the  defense  thereof  with  counsel  mutually
satisfactory to the parties; provided,  however, that an indemnified party shall
have the right to retain its own counsel,  with the fees and expenses to be paid
by the indemnifying party, to the extent that representation of such indemnified
party by the counsel retained by the  indemnifying  party would be inappropriate
due to actual or potential  conflict of interests between such indemnified party
and any other party represented by such counsel in such proceeding.  The failure
to deliver written notice to the indemnifying  party within a reasonable time of
the commencement of any such action shall not relieve such indemnifying party of
liability except to the extent the indemnifying  party is prejudiced as a result
thereof.

                           (4)  Defect  Eliminated  in  Final  Prospectus.   The
foregoing  indemnity  agreements  of the  Company and Holders are subject to the
condition  that,  insofar as they relate to any Violation  made in a preliminary
prospectus but eliminated or remedied in the amended prospectus on file with the
SEC at the time the registration  statement in question becomes effective or the
amended  prospectus  filed with the SEC  pursuant to SEC Rule 424(b) (the "Final
Prospectus"),  such  indemnity  agreement  shall not inure to the benefit of any
person if a copy of the Final Prospectus was timely furnished to the indemnified
party and was not furnished to the person asserting the loss,  liability,  claim
or damage at or prior to the time such action is required by the Securities Act.

                           (5)  Contribution.  In order to provide  for just and
equitable  contribution  to joint liability under the Securities Act in any case
in which either (i) any Holder  exercising  rights under this Agreement,  or any
controlling  person  of any  such  Holder,  makes  a claim  for  indemnification
pursuant to this  section,  but it is judicially  determined  (by the entry of a
final

                                      -22-

<PAGE>

judgment or decree by a court of competent  jurisdiction  and the  expiration of
time  to  appeal  or  the  denial  of  the  last  right  of  appeal)  that  such
indemnification  may not be enforced in such case  notwithstanding the fact that
this Section  provides for  indemnification  in such case, or (ii)  contribution
under the  Securities Act may be required on the part of any such selling Holder
or any such controlling  person in circumstances  for which  indemnification  is
provided under this section;  then,  and in each such case, the party  otherwise
obligated  to  provide   indemnification  under  this  Agreement,   in  lieu  of
indemnifying the party otherwise  entitled to indemnification  hereunder,  shall
contribute to the amount paid or payable by such  indemnified  party as a result
of such loss,  liability,  claim,  damage or expense  in such  proportion  as is
appropriate to reflect the relative fault of the  indemnifying  party on the one
hand and the indemnified party on the other in connection with the statements or
omissions that resulted in such loss,  liability,  claim,  damage or expense, as
well as any other relevant equitable considerations;  with the relative fault of
the  indemnifying  party  and of  the  indemnified  party  to be  determined  by
reference to, among other things, whether the untrue or alleged untrue statement
of a  material  fact  pr the  omission  to  state a  material  fact  related  to
information  supplied by the indemnifying  party or by the indemnified party and
the parties relative intent, knowledge,  access to information,  and opportunity
to correct or prevent such statement or omission;  provided,  however,  that, in
any such case:  (A) no such Holder will be required to contribute  any amount in
excess of the net proceeds of all such Registrable  Securities  offered and sold
by such Holder  pursuant to such  registration  statement;  and (B) no person or
entity  guilty of  fraudulent  misrepresentation  (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any person or
entity who was not guilty of such  fraudulent  misrepresentation.  [This Section
7(b) (vii)(5) amended as of January 26, 2000.]

                           (6)  Survival.  The  obligations  of the  Company and
Holders under this Section  7(b)(vii) shall survive until the fifth  anniversary
of the  completion of any offering of  Registrable  Securities in a registration
statement,  regardless  of the  expiration  of any  statutes  of  limitation  or
extensions of such statutes.

                  (viii) Termination of the Company's  Obligations.  The Company
shall have no  obligations  pursuant to this  Section  7(b) with  respect to any
Registrable  Securities  proposed  to be  sold  by a  Holder  in a  registration
pursuant to Section  7(b)(ii),  (iii) or (iv) more than four (4) years after the
date of this Agreement, or, if earlier, the date on which each Holder receives a
written opinion of counsel to the Company,  reasonably acceptable to counsel for
the Holder, all such Registrable  Securities proposed to be sold by a Holder may
then be sold  under Rule 144 in one  transaction  without  exceeding  the volume
limitations thereunder.

                  (ix) No  Registration  Rights to Third  Parties.  Without  the
prior  written  consent of the Holders of sixty-six and  two-thirds  percent (66
2/3%) of the Series B Preferred Stock then  outstanding,  the Company  covenants
and agrees that it shall not grant,  or cause or permit to be  created,  for the
benefit  of any person or entity any  registration  rights of any kind  (whether
similar to the demand,  "piggyback" or Form S-3 registration rights described in
this Section 7, or otherwise)  relating to shares of the Company's  Common Stock
or any other securities of the Company.

                                      -23-
<PAGE>

                  (x)  Suspension  Provisions.   Notwithstanding  the  foregoing
subsections of this Section 7 (b), the Company shall not be required to take any
action with respect to the  registration or the declaration of  effectiveness of
the  registration  statement  following  written  notice to the Holders from the
Company (a  "Suspension  Notice") of the  existence of any state of facts or the
happening  of any  event  (including  without  limitation  pending  negotiations
relating to, or the  consummation  of, a  transaction,  or the occurrence of any
event that the Company believes,  in good faith,  requires additional disclosure
of material, non-public information by the Company in the registration statement
that the Company  believes it has a bona fide  business  purpose for  preserving
confidentiality  or that renders the Company unable to comply with the published
rules and  regulations  of the SEC  promulgated  under the Securities Act or the
Securities  Exchange  Act,  as in effect at any  relevant  time (the  "Rules and
Regulations"))  that  would  result  in  (1)  the  registration  statement,  any
amendment or  post-effective  amendment  thereto,  or any document  incorporated
therein by  reference  containing  an untrue  statement  of a  material  fact or
omitting to state a material fact required to be stated  therein or necessary to
make the statements  therein not misleading,  or (2) the prospectus issued under
the  registration  statement,   any  prospectus  supplement,   or  any  document
incorporated therein by reference including an untrue statement of material fact
or omitting to state a material fact  necessary in order to make the  statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading,  provided  that the Company (1) shall not issue a Suspension  Notice
more than once in any 12 month period, (2) shall use its best efforts to remedy,
as promptly as practicable, but in any event within 60 days of the date on which
the Suspension  Notice was delivered,  the  circumstances  that gave rise to the
Suspension  Notice and deliver to the Holders  notification  that the Suspension
Notice is no longer in effect  and (3) shall not issue a  Suspension  Notice for
any period  during which the  Company's  executive  officers  are not  similarly
restrained from disposing of shares of the Company's Common Stock.  Upon receipt
of a  Suspension  Notice from the  Company,  all time limits  applicable  to the
Holders under this Section 7(b) shall  automatically be extended by an amount of
time equal to the amount of time the Suspension Notice is in effect, the Holders
will  forthwith  discontinue  disposition  of all such  shares  pursuant  to the
registration  statement  until  receipt from the Company of copies of prospectus
supplements  or  amendments  prepared by or on behalf of the Company  (which the
Company  shall  prepare  promptly),   together  with  a  notification  that  the
Suspension Notice is no longer in effect, and if so directed by the Company, the
Holders  will  deliver  to the  Company  all copies in their  possession  of the
prospectus covering such shares current at the time of receipt of any Suspension
Notice.

     8.  ASSIGNMENT.  The rights of each Investor under Section 7(a) and (b) are
transferable  to any person who  acquires  the  equivalent,  on an  as-converted
basis,  of at least five  percent (5%) of the  outstanding  shares of the Common
Stock  (subject  to  appropriate  adjustment  for all stock  splits,  dividends,
combinations,  recapitalizations  and the like  where all  holders of the Common
Stock participate on a pro rata basis); provided,  however, that no party may be
assigned any of the foregoing  rights unless the Company is given written notice
by the  assigning  party at the  time of such  assignment  stating  the name and
address of the  assignee and  identifying  the  securities  of the Company as to
which the rights in question are being assigned;  and provided  further that any
such assignee  shall receive such assigned  rights  subject to all the terms and
conditions of this  Agreement..  The rights of each Investor  under Section 7(d)
may be assigned  only to a subsidiary  of which an Investor  beneficially  owns,
either  directly  or  indirectly,  at least  fifty  percent  (50%) of the

                                      -24-

<PAGE>

voting securities (each a " Majority Owned Subsidiary);  provided,  however that
no such  assignment of such rights under Sections 7(d) shall be effective  until
the Company is given written notice by the assigning  Investor  stating the name
and address of the assignee;  and provided  further that any such assignee shall
receive such  assigned  rights  subject to all the terms and  conditions of this
Agreement.  Notwithstanding  anything in the  foregoing  to the  contrary,  this
Agreement  may  not be  assigned  by any  Investor  in  whole  or in part to any
Competitor of the Company. For purposes of this Section 8, a "Competitor" of the
Company shall mean any company,  one of whose principal lines of business is the
development and/or marketing of any product similar to the Company's Town Square
product line or any subset thereof, and/or call accounting, traffic engineering,
facilities  and alarm  management,  PBX  security,  voicemail/auto  attendant or
answer  detection  software  and  hardware  systems  that  operate  on  personal
computers, local area networks and stand-alone proprietary hardware and that are
used primarily in the commercial and hospitality markets.

     9. MISCELLANEOUS.

         (a) Successors and Assigns.  The terms and conditions of this Agreement
will inure to the benefit of and be binding upon the  respective  successors and
assigns of the parties.

         (b)  Governing  Law. This  Agreement  will be governed by and construed
under  the  internal  laws  of the  State  of  Delaware,  without  reference  to
principles of conflict of laws or choice of laws.

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

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

         (e)  Notices.  Any notice  required or permitted  under this  Agreement
shall be given in writing,  shall be effective when  received,  and shall in any
event be deemed  received and  effectively  given upon personal  delivery to the
party to be notified or three (3)  business  days after  deposit with the United
States Post Office, by registered or certified mail, postage prepaid, or one (1)
business day after deposit with a nationally  recognized courier service such as
FedEx for next business day delivery under  circumstances  in which such service
guarantees  next business day delivery,  or one (1) business day after facsimile
with copy  delivered by  registered  or  certified  mail,  in any case,  postage
prepaid and  addressed to the party to be notified at the address  indicated for
such  party on the  signature  page  hereof  or at such  other  address  as each
Investor or the Company may  designate  by giving at least ten (10) days advance
written notice pursuant to this Section 9(e).

         (f) No Finder's  Fees.  Each Investor will  indemnify and hold harmless
the Company from any liability for any commission or  compensation in the nature
of a finders' or

                                      -25-

<PAGE>

broker's fee for which such Investor or any of its officers, partners, employees
or consultants,  or representatives  is responsible.  The Company will indemnify
and hold  harmless  each  Investor  from any  liability  for any  commission  or
compensation  in the nature of a finder's or broker's  fee for which the Company
or  any  of  its  officers,  employees  or  consultants  or  representatives  is
responsible.

         (g)  Amendments  and  Waivers.  This  Agreement  may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular  instance and either  retroactively or prospectively),  only with the
written consent of the Company and the holders of Purchased Shares  representing
at least  two-thirds  of the total  aggregate  number of  Purchased  Shares then
outstanding  (excluding  any of such shares that have been sold in a transaction
in which rights under  Section  7(b) are not  assigned in  accordance  with this
Agreement  or sold to the public  pursuant  to SEC Rule 144 or  otherwise).  Any
amendment  or waiver  effected  in  accordance  with this  Section  9(g) will be
binding upon each  Investor,  the Company and their  respective  successors  and
assigns. Notwithstanding the foregoing, the provisions of Clauses (b), (c), (d),
(e), (f) and (g), Section 7 and Section 8 may not be amended without the written
consent of the  Company  and each  Investor,  which may be withheld in either of
their sole and absolute discretions.

         (h)  Severability.  If any  provision  of this  Agreement is held to be
unenforceable  under  applicable  law, such provision will be excluded from this
Agreement  and the  balance  of the  Agreement  will be  interpreted  as if such
provision were so excluded and will be enforceable in accordance with its terms.

         (i)  Entire  Agreement.   This  Agreement,   together  with  the  other
Transaction  Agreement  and  all  exhibits  and  schedules  hereto  and  thereto
constitutes the entire  agreement and  understanding of the parties with respect
to the subject  matter  hereof and  supersedes  any and all prior  negotiations,
correspondence,  agreements.  understandings  duties or obligations  between the
parties with respect to the subject matter hereof.

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

         (k) Meaning of Include and  Including.  Whenever in this  Agreement the
word  "include" or  "including"  is used.  it shall be deemed to mean  "include,
without limitation" or "including,  without limitation." as the case may be, and
the language following "include" or "including" shall not be deemed to set forth
an exhaustive list.

         (l) Fees, Costs and Expenses.  All fees, costs and expenses  (including
attorneys' fees and expenses)  incurred by either part hereto in connection with
the  preparation,  negotiation  and  execution of this  Agreement  and the other
Transaction  Agreements and the  consummation of the  transactions  contemplated
hereby and thereby  (including  the costs  associated  with any filings with, or
compliance with any of the requirements of, any governmental authorities), shall
be the sole and exclusive responsibility of such party.

                                      -26-

<PAGE>

         (m) Competition.  Nothing set forth herein shall be deemed to preclude,
limit or restrict the Company's or each  Investor's  ability to compete with the
other.

         (n) Cooperation in HSR Act Filings.

                  (i) In the event of a conversion of the  Purchased  Shares (or
any other action by an Investor  with respect to any  Securities  of the Company
held by such  Investor)  that would  require a filing by the Investor  under the
Hart-Scott-Rodino  Antitrust  Improvements  Act of 1976  (the  "HSR  Act"),  the
Investor and its respective  affiliates (including any "ultimate parent entity",
as  defined  in the HSR Act),  and the  Company  and its  respective  affiliates
(including  any  "ultimate  parent  entity",  as defined in the HSR Act),  shall
promptly prepare and make their respective filings and thereafter shall make all
required or requested  submissions under the HSR Act or any analogous applicable
law, if required. In taking such actions or making any such filings, the parties
hereto shall  furnish  information  required in  connection  therewith  and seek
timely to obtain  any  applicable  actions,  consents,  approvals  or waivers of
governmental  authorities;  provided,  however,  that the parties  hereto  shall
cooperate  with each other in connection  with the making of all such filings to
the extent  permitted by applicable law.  Without limiting the generality of the
foregoing,  to the  extent  permitted  by  applicable  law  and so  long  as the
following  will not  involve  the  disclosure  of  confidential  or  proprietary
information of one party hereto to another,  each party shall cooperate with the
other by (a)  providing  copies of all  documents to be filed to the  non-filing
party and its advisors prior to filing and, if requested,  accepting  reasonable
additions,  deletions  or changes  suggested  in  connection  therewith  and (b)
providing  to each  other  party  copies of all  correspondence  from and to any
governmental authority in connection with any such filing.

                  (ii)  Notwithstanding the foregoing,  neither any Investor nor
any of its  affiliates  shall be under any obligation to comply with any request
or  requirement  imposed  by the  Federal  Trade  Commission  (the  "FTC"),  the
Department  of Justice  (the  "DofJ")  or any other  governmental  authority  in
connection  with the  compliance  with the  requirements  of the HSR Act, or any
other  applicable  law,  if the  Investor,  in the  exercise  of its  reasonable
discretion,  deems  such  request  or  requirement  unduly  burdensome.  Without
limiting the  generality  of the  foregoing,  no Investor  shall be obligated to
comply  with any  request by, or any  requirement  of, the FTC,  the DofJ or any
other governmental authority: (i) to disclose information such Investor deems it
in its best  interests  to keep  confidential;  (ii) to dispose of any assets or
operations;  or (iii) to comply with any proposed  restriction  on the manner in
which it conducts its  operations.  In the event such  Investor  shall receive a
second  request  in  respect  of its HSR  Filing  determined  by it to be unduly
burdensome  and it shall prove unable to negotiate a means  satisfactory  to the
Investor for complying with such burdensome second request, or the Federal Trade
Commission  or  Department of Justice shall impose any condition on the Investor
or its affiliates in respect thereof deemed  unacceptable  by the Investor,  the
Company  and  the  Investor  shall  cooperate  in good  faith  to  negotiate  an
alternative  transaction that provides such Investor with the economic  benefits
it would receive if it converted  the  Purchased  Shares (or took any such other
action  referenced in the first  parenthetical  in the first  sentence of Clause
(i)).

              [The remainder of this page is intentionally blank.]

                                      -27-

<PAGE>

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

XIOX CORPORATION

By:
   ---------------------------------------

Name:
     -------------------------------------

Title:
      ------------------------------------

Date Signed:
            ------------------------------

Address:  577 Airport Boulevard, Suite 700
          Burlingame, CA 94010

Telephone No: (650) 375-8188

Facsimile No: (650) 375-3988

                                          Flanders Language Valley Fund, CVA

                                          By:
                                             -----------------------------------

                                          Name: Philip Vermeulen

                                          Title:
                                                --------------------------------

                                          Date Signed:
                                                      --------------------------

                                          Address: Flanders Language Valley 63
                                                   8900 Ieper
                                                   BELGIUM

                                          Telephone No.: 011 32 57 22 94 30

                                          Facsimile No.: 011 32 57 20 68 42

                  [Signature Page to Series B Stock Purchase Agreement]

         Other signatures intentionally omitted.

                                      -28-

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