Document:

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                                   Exhibit 4.3

                           SECURITIES PURCHASE AGREEMENT

         SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of January
14, 2000, by and among American Technologies Group, Inc., a Nevada corporation,
with headquarters located at 1017 South Mountain Avenue, Monrovia, California
91016 (the "COMPANY"), and each of the purchasers set forth on the signature
pages hereto (the "BUYERS").

         WHEREAS:

         A. The Company and the Buyers are executing and delivering this
Agreement in reliance upon the exemption from securities registration under
Section 4(2) of the Securities Act of 1933, as amended (the "1933 ACT");

         B. Buyers desire to purchase and the Company desires to issue and
sell, upon the terms and conditions set forth in this Agreement (i)
convertible debentures of the Company, in the form attached hereto as EXHIBIT
"A", in the aggregate principal amount of Two Hundred Fifty Thousand Dollars
($250,000) (together with any debenture(s) issued in replacement thereof or
as a dividend thereon or otherwise with respect thereto in accordance with
the terms thereof, the "DEBENTURES"), convertible into shares of common
stock, $0.001 par value per share, of the Company (the "COMMON STOCK"), upon
the terms and subject to the limitations and conditions set forth in such
Debentures and (ii) warrants, in the form attached hereto as EXHIBIT "B", to
purchase Five Hundred Thousand (500,000) shares of Common Stock (the
"WARRANTS");

         C. Each Buyer wishes to purchase, upon the terms and conditions
stated in this Agreement, such principal amount of Debentures and number of
Warrants as is set forth immediately below its name on the signature pages
hereto; and

         D. Contemporaneous with the execution and delivery of this
Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement, in the form attached hereto as EXHIBIT "C" (the
"REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company has agreed to
provide certain registration rights under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.

         NOW THEREFORE, the Company and each of the Buyers severally (and not
jointly) hereby agree as follows:

         1.       PURCHASE AND SALE OF DEBENTURES AND WARRANTS.

                  a. PURCHASE OF DEBENTURES AND WARRANTS. On the Closing Date
(as defined below), the Company shall issue and sell to each Buyer and each
Buyer severally agrees to purchase from the Company such principal amount of
Debentures and number of Warrants as is set forth immediately below such
Buyer's name on the signature pages hereto.

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                  b. FORM OF PAYMENT. On the Closing Date (as defined below),
(i) each Buyer shall pay the purchase price for the Debentures and the
Warrants to be issued and sold to it at the Closing (as defined below) (the
"PURCHASE PRICE") by wire transfer of immediately available funds to the
Company, in accordance with the Company's written wiring instructions,
against delivery of the Debentures in the principal amount equal to the
Purchase Price and the number of Warrants as is set forth immediately below
such Buyer's name on the signature pages hereto, and (ii) the Company shall
deliver such Debentures and Warrants duly executed on behalf of the Company,
to such Buyer, against delivery of such Purchase Price.

                  c. CLOSING DATE. Subject to the satisfaction (or waiver) of
the conditions thereto set forth in Section 6 and Section 7 below, the date
and time of the issuance and sale of the Debentures and the Warrants pursuant
to this Agreement (the "CLOSING DATE") shall be 12:00 noon Eastern Standard
Time on January 14, 2000 or such other mutually agreed upon time. The closing
of the transactions contemplated by this Agreement (the "CLOSING") shall
occur on the Closing Date at the offices of Bristol Capital, LLC, 11777 San
Vicente Blvd., Suite 702, Los Angeles, California 90049 or at such other
location as may be agreed to be the parties.

         2. BUYERS' REPRESENTATIONS AND WARRANTIES. Each Buyer severally (and
not jointly) represents and warrants to the Company solely as to such Buyer
that:

                  a. INVESTMENT PURPOSE. As of the date hereof, the Buyer is
purchasing the Debentures and the shares of Common Stock issuable upon
conversion of or otherwise pursuant to the Debentures (including, without
limitation, such additional shares of Common Stock, if any, as are issuable
as a result of the events described in Sections 1.3 and 1.4(g) of the
Debentures and Section 2(c) of the Registration Rights Agreement, such shares
of Common Stock being referred to herein as the "CONVERSION SHARES") and the
Warrants and the shares of Common Stock issuable upon exercise thereof (the
"WARRANT SHARES" and, collectively with the Debentures, Warrants and
Conversion Shares, the "SECURITIES") for its own account and not with a
present view towards the public sale or distribution thereof, except pursuant
to sales registered or exempted from registration under the 1933 Act;
PROVIDED, HOWEVER, that by making the representations herein, the Buyer does
not agree to hold any of the Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption under
the 1933 Act.

                  b. ACCREDITED INVESTOR STATUS.  The Buyer is an
"accredited  investor" as that term is defined in Rule 501(a) of  Regulation
D (an "ACCREDITED INVESTOR").

                  c. RELIANCE ON EXEMPTIONS. The Buyer understands that the
Securities are being offered and sold to it in reliance upon specific
exemptions from the registration requirements of United States federal and
state securities laws and that the Company is relying upon the truth and
accuracy of, and the Buyer's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Buyer set
forth herein in order to determine the availability of such exemptions and
the eligibility of the Buyer to acquire the Securities.

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                  d. INFORMATION. The Buyer and its advisors, if any, have
been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Securities which have been requested by the Buyer or its advisors. The Buyer
and its advisors, if any, have been afforded the opportunity to ask questions
of the Company. Neither such inquiries nor any other due diligence
investigation conducted by Buyer or any of its advisors or representatives
shall modify, amend or affect Buyer's right to rely on the Company's
representations and warranties contained in Section 3 below. The Buyer
understands that its investment in the Securities involves a significant
degree of risk.

                  e. GOVERNMENTAL REVIEW. The Buyer understands that no
United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the
Securities.

                  f. TRANSFER OR RE-SALE. The Buyer understands that (i)
except as provided in the Registration Rights Agreement, the sale or re-sale
of the Securities has not been and is not being registered under the 1933 Act
or any applicable state securities laws, and the Securities may not be
transferred unless (a) the Securities are sold pursuant to an effective
registration statement under the 1933 Act, (b) the Buyer shall have delivered
to the Company an opinion of counsel (which opinion shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions) to the effect that the Securities to be sold or transferred may
be sold or transferred pursuant to an exemption from such registration, (c)
the Securities are sold or transferred to an "affiliate" (as defined in Rule
144 promulgated under the 1933 Act (or a successor rule) ("RULE 144")) of the
Buyer who agrees to sell or otherwise transfer the Securities only in
accordance with this Section 2(f) and who is an Accredited Investor, or (d)
the Securities are sold pursuant to Rule 144; (ii) any sale of such
Securities made in reliance on Rule 144 may be made only in accordance with
the terms of said Rule and further, if said Rule is not applicable, any
re-sale of such Securities under circumstances in which the seller (or the
person through whom the sale is made) may be deemed to be an underwriter (as
that term is defined in the 1933 Act) may require compliance with some other
exemption under the 1933 Act or the rules and regulations of the SEC
thereunder; and (iii) neither the Company nor any other person is under any
obligation to register such Securities under the 1933 Act or any state
securities laws or to comply with the terms and conditions of any exemption
thereunder (in each case, other than pursuant to the Registration Rights
Agreement). Notwithstanding the foregoing or anything else contained herein
to the contrary, the Securities may be pledged as collateral in connection
with a BONA FIDE margin account or other lending arrangement.

                  g. LEGENDS. The Buyer understands that the Debentures and
the Warrants and, until such time as the Conversion Shares and Warrant Shares
have been registered under the 1933 Act as contemplated by the Registration
Rights Agreement or otherwise may be sold pursuant to Rule 144 without any
restriction as to the number of securities as of a particular date that can
then be immediately sold, the Conversion Shares and Warrant Shares may bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for such Securities):

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                  "The securities represented by this certificate have not been
                  registered under the Securities Act of 1933, as amended. The
                  securities may not be sold, transferred or assigned in the
                  absence of an effective registration statement for the
                  securities under said Act, or an opinion of counsel, in form,
                  substance and scope customary for opinions of counsel in
                  comparable transactions, that registration is not required
                  under said Act or unless sold pursuant to Rule 144 under said
                  Act."

                  The legend set forth above shall be removed and the Company
shall issue a certificate without such legend to the holder of any Security upon
which it is stamped, if, unless otherwise required by applicable state
securities laws, (a) such Security is registered for sale under an effective
registration statement filed under the 1933 Act or otherwise may be sold
pursuant to Rule 144 without any restriction as to the number of securities as
of a particular date that can then be immediately sold, or (b) such holder
provides the Company with an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable transactions, to the effect that
a public sale or transfer of such Security may be made without registration
under the 1933 Act and such sale or transfer is effected or (c) such holder
provides the Company with reasonable assurances that such Security can be sold
pursuant to Rule 144. The Buyer agrees to sell all Securities, including those
represented by a certificate(s) from which the legend has been removed, in
compliance with applicable prospectus delivery requirements, if any.

                  h. AUTHORIZATION; ENFORCEMENT. This Agreement and the
Registration Rights Agreement have been duly and validly authorized. This
Agreement has been duly executed and delivered on behalf of the Buyer, and
this Agreement constitutes, and upon execution and delivery by the Buyer of
the Registration Rights Agreement, such agreement will constitute, valid and
binding agreements of the Buyer enforceable in accordance with their terms.

                  i. RESIDENCY. The Buyer is a resident of the jurisdiction
set forth immediately below such Buyer's name on the signature pages hereto.

         3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Buyer that:

                  a. ORGANIZATION AND QUALIFICATION. The Company and each of
its Subsidiaries (as defined below), if any, is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is incorporated, with full power and authority (corporate and other)
to own, lease, use and operate its properties and to carry on its business as
and where now owned, leased, used, operated and conducted. The Company's only
Subsidiary is New Concept Mining, Inc. The Company and each of its
Subsidiaries is duly qualified as a foreign corporation to do business and is
in good standing in every jurisdiction in which its ownership or use of
property or the nature of the business conducted by it makes such
qualification necessary except where the failure to be so qualified or in
good standing would not have a MATERIAL ADVERSE EFFECT. "MATERIAL ADVERSE
EFFECT" means any material adverse effect

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on the business, operations, assets, financial condition or prospects of the
Company or its Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements or instruments to be entered into in
connection herewith. "SUBSIDIARIES" means any corporation or other
organization, whether incorporated or unincorporated, in which the Company
owns, directly or indirectly, any equity or other ownership interest.

                  b. AUTHORIZATION; ENFORCEMENT. (i) The Company has all
requisite corporate power and authority to enter into and perform this
Agreement, the Registration Rights Agreement, the Debentures and the Warrants
and to consummate the transactions contemplated hereby and thereby and to
issue the Securities, in accordance with the terms hereof and thereof, (ii)
the execution and delivery of this Agreement, the Registration Rights
Agreement, the Debentures and the Warrants by the Company and the
consummation by it of the transactions contemplated hereby and thereby
(including without limitation, the issuance of the Debentures and the
Warrants and the issuance and reservation for issuance of the Conversion
Shares and Warrant Shares issuable upon conversion or exercise thereof) have
been duly authorized by the Company's Board of Directors and no further
consent or authorization of the Company, its Board of Directors, or its
shareholders is required, (iii) this Agreement has been duly executed and
delivered by the Company, and (iv) this Agreement constitutes, and upon
execution and delivery by the Company of the Registration Rights Agreement,
the Debentures and the Warrants, each of such instruments will constitute, a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms.

                  c. CAPITALIZATION. As of the date hereof, the authorized
capital stock of the Company consists of (i) an aggregate of 100,000,000
shares of Common Stock, of which 1,600,125 shares are reserved for issuance
pursuant to the Company's stock option plans, 7,964,773 shares are reserved
for issuance upon exercise of other options and warrants, shares reserved for
issuance pursuant to certain debentures issued by the Company (other than the
Debentures), as set forth on SCHEDULE 3(c) and 3,873,563 (2x currently
required) shares are reserved for issuance upon conversion of the Debentures
and exercise of the Warrants (subject to adjustment pursuant to the Company's
covenant set forth in Section 4(h) below) ; and (ii) an aggregate of
50,000,000 shares of blank check preferred stock, par value $0.001 per share,
of which (a) 10,000,000 shares have been designated as Series A Convertible
Preferred Stock, (b) 500,000 shares have been designated as Series B
Convertible Preferred Stock and (c) 2,000 shares have been designated as
Series C Convertible Preferred Stock. As of the date hereof, an aggregate of
36,584,178 shares of Common Stock and 378,061 shares of Series A Preferred
Stock were issued and outstanding, and no shares of Series B or Series C
Preferred Stock were issued and outstanding. All of such outstanding shares
of capital stock are, or upon issuance will be, duly authorized, validly
issued, fully paid and nonassessable. No shares of capital stock of the
Company are subject to preemptive rights or any other similar rights of the
stockholders of the Company or any liens or encumbrances imposed through the
actions or failure to act of the Company. Except as disclosed in SCHEDULE
3(c), as of the effective date of this Agreement, (i) there are no
outstanding options, warrants, scrip, rights to subscribe for, puts, calls,
rights of first refusal, agreements, understandings, claims or other
commitments or rights of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for any shares of capital stock of

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the Company or any of its Subsidiaries, or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional shares
of capital stock of the Company or any of its Subsidiaries, (ii) there are no
agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of its or their securities under the
1933 Act (except the Registration Rights Agreement) and (iii) there are no
anti-dilution or price adjustment provisions contained in any security issued
by the Company (or in any agreement providing rights to security holders)
that will be triggered by the issuance of the Debentures, the Warrants, the
Conversion Shares or Warrant Shares. The Company has furnished to the Buyer
true and correct copies of the Company's Certificate of Incorporation as in
effect on the date hereof ("CERTIFICATE OF INCORPORATION"), the Company's
By-laws, as in effect on the date hereof (the "BY-LAWS"), and the terms of
all securities convertible into or exercisable for Common Stock of the
Company and the material rights of the holders thereof in respect thereto.
The Company shall provide the Buyer with a written update of this
representation signed by the Company's Chief Executive or Chief Financial
Officer on behalf of the Company as of the Closing Date.

                  d. ISSUANCE OF SHARES. The Conversion Shares and Warrant
Shares are duly authorized and reserved for issuance and, upon conversion of
the Debentures and exercise of the Warrants in accordance with their
respective terms, will be validly issued, fully paid and non-assessable, and
free from all taxes, liens, claims and encumbrances with respect to the issue
thereof and shall not be subject to preemptive rights or other similar rights
of stockholders of the Company and will not impose personal liability upon
the holder thereof.

                  e. ACKNOWLEDGMENT OF DILUTION. The Company understands and
acknowledges the potentially dilutive effect to the Common Stock upon the
issuance of the Conversion Shares and Warrant Shares upon conversion of the
Debenture, or exercise of the Warrants. The Company further acknowledges that
its obligation to issue Conversion Shares and Warrant Shares upon conversion
of the Debentures or exercise of the Warrants in accordance with this
Agreement, the Debentures and the Warrants is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the
ownership interests of other stockholders of the Company.

                  f. NO CONFLICTS. The execution, delivery and performance of
this Agreement, the Registration Rights Agreement, the Debentures and the
Warrants by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation,
the issuance and reservation for issuance of the Conversion Shares and
Warrant Shares) will not (i) conflict with or result in a violation of any
provision of the Certificate of Incorporation or By-laws or (ii) violate or
conflict with, or result in a breach of any provision of, or constitute a
default (or an event which with notice or lapse of time or both could become
a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture, patent, patent
license or instrument to which the Company or any of its Subsidiaries is a
party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and
regulations and regulations of any self-regulatory organizations to which the
Company or its securities are subject) applicable to the Company or any of
its Subsidiaries or by which any property or asset of the Company or any of
its Subsidiaries is bound or affected (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as
would not, individually or in the aggregate, have a Material Adverse Effect).

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Neither the Company nor any of its Subsidiaries is in violation of its
Certificate of Incorporation, By-laws or other organizational documents and
neither the Company nor any of its Subsidiaries is in default (and no event
has occurred which with notice or lapse of time or both could put the Company
or any of its Subsidiaries in default) under, and neither the Company nor any
of its Subsidiaries has taken any action or failed to take any action that
would give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company
or any of its Subsidiaries is a party or by which any property or assets of
the Company or any of its Subsidiaries is bound or affected, except for
possible defaults as would not, individually or in the aggregate, have a
Material Adverse Effect. The businesses of the Company and its Subsidiaries,
if any, are not being conducted, and shall not be conducted so long as a
Buyer owns any of the Securities, in violation of any law, ordinance or
regulation of any governmental entity. Except as specifically contemplated by
this Agreement and as required under the 1933 Act and any applicable state
securities laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any
court, governmental agency, regulatory agency, self regulatory organization
or stock market or any third party in order for it to execute, deliver or
perform any of its obligations under this Agreement, the Registration Rights
Agreement, the Debentures or the Warrants in accordance with the terms hereof
or thereof or to issue and sell the Debentures and Warrants in accordance
with the terms hereof and to issue the Conversion Shares upon conversion of
the Debentures and the Warrant Shares upon exercise of the Warrants. Except
as disclosed in SCHEDULE 3(f), all consents, authorizations, orders, filings
and registrations which the Company is required to obtain pursuant to the
preceding sentence have been obtained or effected on or prior to the date
hereof. The Company is not in violation of the listing requirements of the
Over-the-Counter Bulletin Board (the "OTCBB") and does not reasonably
anticipate that the Common Stock will be delisted by the OTCBB in the
foreseeable future. The Company and its Subsidiaries are unaware of any facts
or circumstances which might give rise to any of the foregoing.

                  g. SEC DOCUMENTS; FINANCIAL STATEMENTS. Since July 31,
1998, the Company has timely filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant to the
reporting requirements of the Exchange Act of 1934, as amended (the "1934
ACT") (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents
(other than exhibits to such documents) incorporated by reference therein,
being hereinafter referred to herein as the "SEC DOCUMENTS"). The Company has
delivered to each Buyer true and complete copies of the SEC Documents, except
for such exhibits and incorporated documents. As of their respective dates,
the SEC Documents complied in all material respects with the requirements of
the 1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time
they were filed with the SEC, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
statements made in any such SEC Documents is, or has been, required to be
amended or updated under applicable law (except for such statements as have
been amended or updated in subsequent filings prior to the date hereof). As
of their respective dates, the financial statements of the Company included
in the SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Such financial

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statements have been prepared in accordance with United States generally
accepted accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be condensed
or summary statements) and fairly present in all material respects the
consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except as set
forth in the financial statements of the Company included in the SEC
Documents, the Company has no liabilities, contingent or otherwise, other
than (i) liabilities incurred in the ordinary course of business subsequent
to July 31, 1999 and (ii) obligations under contracts and commitments
incurred in the ordinary course of business and not required under generally
accepted accounting principles to be reflected in such financial statements,
which, individually or in the aggregate, are not material to the financial
condition or operating results of the Company.

                  h. ABSENCE OF CERTAIN CHANGES. Since July 31, 1999, there
has been no material adverse change and no material adverse development in
the assets, liabilities, business, properties, operations, financial
condition, results of operations or prospects of the Company or any of its
Subsidiaries.

                  i. ABSENCE OF LITIGATION. There is no action, suit, claim,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened against or
affecting the Company or any of its Subsidiaries, or their officers or
directors in their capacity as such, that could have a Material Adverse
Effect. SCHEDULE 3(i) contains a complete list and summary description of any
pending or threatened proceeding against or affecting the Company or any of
its Subsidiaries, without regard to whether it would have a Material Adverse
Effect. The Company and its Subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.

                  j. PATENTS, COPYRIGHTS, ETC.

                    (i)     The  Company and each of its  Subsidiaries  owns
or  possesses  the  requisite  licenses or rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, trademarks,
trademark applications, service marks, service names, trade names and
copyrights ("INTELLECTUAL PROPERTY") necessary to enable it to conduct its
business as now operated (and, except as set forth in SCHEDULE 3(j) hereof,
to the best of the Company's knowledge, as presently contemplated to be
operated in the future); there is no claim or action by any person pertaining
to, or proceeding pending, or to the Company's knowledge threatened, which
challenges the right of the Company or of a Subsidiary with respect to any
Intellectual Property necessary to enable it to conduct its business as now
operated (and, except as set forth in SCHEDULE 3(j) hereof, to the best of
the Company's knowledge, as presently contemplated to be operated in the
future); to the best of the Company's knowledge, the Company's or its
Subsidiaries' current and intended products, services and processes do not
infringe on any Intellectual Property or other rights held by any person; and
the Company is unaware of any facts or circumstances which might give rise to
any of the foregoing. The

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Company and each of its Subsidiaries have taken reasonable security measures
to protect the secrecy, confidentiality and value of their Intellectual
Property.

                  (ii) All of the Company's computer software and computer
hardware, and other similar or related items of automated, computerized or
software systems that are used or relied on by the Company in the conduct of
its business or that were, or currently are being, sold or licensed by the
Company to customers (collectively, "INFORMATION TECHNOLOGY"), are Year 2000
Compliant. For purposes of this Agreement, the term "YEAR 2000 COMPLIANT"
means, with respect to the Company's Information Technology, that the
Information Technology is designed to be used prior to, during and after the
calendar Year 2000 A.D., and the Information Technology used during each such
time period will accurately receive, provide and process date and time data
(including, but not limited to, calculating, comparing and sequencing) from,
into and between the 20th and 21st centuries, including the years 1999 and
2000, and leap-year calculations, and will not malfunction, cease to
function, or provide invalid or incorrect results as a result of the date or
time data, to the extent that other information technology, used in
combination with the Information Technology, properly exchanges date and time
data with it. The Company has delivered to the Buyers true and correct copies
of all analyses, reports, studies and similar written information, whether
prepared by the Company or another party, relating to whether the Information
Technology is Year 2000 Compliant.

                  k. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the
Company nor any of its Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation
which in the judgment of the Company's officers has or is expected in the
future to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries is a party to any contract or agreement which in the judgment of
the Company's officers has or is expected to have a Material Adverse Effect.

                  l. TAX STATUS. Except as set forth on SCHEDULE 3(l), the
Company and each of its Subsidiaries has made or filed all federal, state and
foreign income and all other tax returns, reports and declarations required
by any jurisdiction to which it is subject (unless and only to the extent
that the Company and each of its Subsidiaries has set aside on its books
provisions reasonably adequate for the payment of all unpaid and unreported
taxes) and has paid all taxes and other governmental assessments and charges
that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and has
set aside on its books provisions reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of
the Company know of no basis for any such claim. The Company has not executed
a waiver with respect to the statute of limitations relating to the
assessment or collection of any foreign, federal, statue or local tax. Except
as set forth on SCHEDULE 3(l), none of the Company's tax returns is presently
being audited by any taxing authority.

                  m. CERTAIN TRANSACTIONS. Except as set forth in the SEC
Documents and except for arm's length transactions pursuant to which the
Company or any of its Subsidiaries makes payments in the ordinary course of
business upon terms no less favorable

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than the Company or any of its Subsidiaries could obtain from third parties
and other than the grant of stock options disclosed on SCHEDULE 3(c), none of
the officers, directors, or employees of the Company is presently a party to
any transaction with the Company or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any officer, director, or any such employee
has a substantial interest or is an officer, director, trustee or partner.

                  n. DISCLOSURE. All information relating to or concerning
the Company or any of its Subsidiaries set forth in this Agreement and
provided to the Buyers pursuant to Section 2(d) hereof and otherwise in
connection with the transactions contemplated hereby is true and correct in
all material respects and the Company has not omitted to state any material
fact necessary in order to make the statements made herein or therein, in
light of the circumstances under which they were made, not misleading. No
event or circumstance has occurred or exists with respect to the Company or
any of its Subsidiaries or its or their business, properties, prospects,
operations or financial conditions, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but
which has not been so publicly announced or disclosed (assuming for this
purpose that the Company's reports filed under the 1934 Act are being
incorporated into an effective registration statement filed by the Company
under the 1933 Act).

                  o. ACKNOWLEDGMENT REGARDING BUYERS' PURCHASE OF SECURITIES.
The Company acknowledges and agrees that the Buyers are acting solely in the
capacity of arm's length purchasers with respect to this Agreement and the
transactions contemplated hereby. The Company further acknowledges that no
Buyer is acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to this Agreement and the transactions
contemplated hereby and any statement made by any Buyer or any of their
respective representatives or agents in connection with this Agreement and
the transactions contemplated hereby is not advice or a recommendation and is
merely incidental to the Buyers' purchase of the Securities. The Company
further represents to each Buyer that the Company's decision to enter into
this Agreement has been based solely on the independent evaluation of the
Company and its representatives.

                  p. NO INTEGRATED OFFERING. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales in any security or solicited any offers
to buy any security under circumstances that would require registration under
the 1933 Act of the issuance of the Securities to the Buyers. The issuance of
the Securities to the Buyers will not be integrated with any other issuance
of the Company's securities (past, current or future) for purposes of any
stockholder approval provisions applicable to the Company or its securities.

                  q. NO BROKERS. The Company has taken no action which would
give rise to any claim by any person for brokerage commissions, finder's fees
or similar payments

                                     -10-

<PAGE>

relating to this Agreement or the transactions contemplated hereby, except for
dealings with Bristol Capital, LLC, whose commissions and fees will be paid for
by the Company.

                  r. PERMITS; COMPLIANCE. The Company and each of its
Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates,
approvals and orders necessary to own, lease and operate its properties and
to carry on its business as it is now being conducted (collectively, the
"COMPANY PERMITS"), and there is no action pending or, to the knowledge of
the Company, threatened regarding suspension or cancellation of any of the
Company Permits. Neither the Company nor any of its Subsidiaries is in
conflict with, or in default or violation of, any of the Company Permits,
except for any such conflicts, defaults or violations which, individually or
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect. Since July 31, 1999, neither the Company nor any of its Subsidiaries
has received any notification with respect to possible conflicts, defaults or
violations of applicable laws, except for notices relating to possible
conflicts, defaults or violations, which conflicts, defaults or violations
would not have a Material Adverse Effect.

                  s. ENVIRONMENTAL MATTERS.

                  (i) Except as set forth in SCHEDULE 3(s), there are, to the
Company's  knowledge,  with respect to the Company or any of its Subsidiaries
or any predecessor of the Company, no past or present violations of
Environmental Laws (as defined below), releases of any material into the
environment, actions, activities, circumstances, conditions, events,
incidents, or contractual obligations which may give rise to any common law
environmental liability or any liability under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 or similar
federal, state, local or foreign laws and neither the Company nor any of its
Subsidiaries has received any notice with respect to any of the foregoing,
nor is any action pending or, to the Company's knowledge, threatened in
connection with any of the foregoing. The term "ENVIRONMENTAL LAWS" means all
federal, state, local or foreign laws relating to pollution or protection of
human health or the environment (including, without limitation, ambient air,
surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants contaminants, or toxic or
hazardous substances or wastes (collectively, "HAZARDOUS MATERIALS") into the
environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands
or demand letters, injunctions, judgments, licenses, notices or notice
letters, orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.

                  (ii) Other than those that are or were stored, used or
disposed of in compliance with applicable law, no Hazardous Materials are
contained on or about any real property currently owned, leased or used by
the Company or any of its Subsidiaries, and no Hazardous Materials were
released on or about any real property previously owned, leased or used by
the Company or any of its Subsidiaries during the period the property was
owned, leased or used by the Company or any of its Subsidiaries, except in
the normal course of the Company's or any of its Subsidiaries' business.

                                     -11-

<PAGE>

                     (iii) Except as set forth in SCHEDULE 3(S), there are no
underground storage tanks on or under any real property owned, leased or used
by the Company or any of its Subsidiaries that are not in compliance with
applicable law.

                t. TITLE TO PROPERTY. The Company and its Subsidiaries have
good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is material to
the business of the Company and its Subsidiaries, in each case free and clear
of all liens, encumbrances and defects, except such as are described in
SCHEDULE 3(t) or such as would not have a Material Adverse Effect. Any real
property and facilities held under lease by the Company and its Subsidiaries
are held by them under valid, subsisting and enforceable leases with such
exceptions as would not have a Material Adverse Effect.

                u. INSURANCE. The Company and each of its Subsidiaries are
insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as management of the Company believes to
be prudent and customary in the businesses in which the Company and its
Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.

                v. INTERNAL ACCOUNTING CONTROLS. The Company and each of its
Subsidiaries maintain a system of internal accounting controls sufficient, in
the judgment of the Company's board of directors, to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

                w. FOREIGN CORRUPT PRACTICES. Neither the Company, nor any of
its Subsidiaries, nor any director, officer, agent, employee or other person
acting on behalf of the Company or any Subsidiary has, in the course of his
actions for, or on behalf of, the Company, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; made any direct or indirect unlawful payment
to any foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the U.S. Foreign
Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.

                x. NO INVESTMENT COMPANY. The Company is not, and upon the
issuance and sale of the Securities as contemplated by this Agreement will
not be an "investment

                                     -12-
<PAGE>

company" required to be registered under the Investment Company Act of 1940
(an "INVESTMENT COMPANY"). The Company is not controlled by an Investment
Company.

            4.  COVENANTS.

                a. BEST EFFORTS.  The parties shall use their best efforts to
satisfy  timely each of the  conditions  described in Section 6 and 7 of this
Agreement.

                b. BLUE SKY LAWS. The Company shall, on or before the Closing
Date, take such action as the Company shall reasonably determine is necessary
to qualify the Securities for sale to the Buyers at the applicable closing
pursuant to this Agreement under applicable securities or "blue sky" laws of
the states of the United States (or to obtain an exemption from such
qualification), and shall provide evidence of any such action so taken to
each Buyer on or prior to the Closing Date.

                c. REPORTING STATUS; ELIGIBILITY TO USE FORM S-3. The
Company's Common Stock is registered under Section 12(g) of the 1934 Act. So
long as any Buyer beneficially owns any of the Securities, the Company shall
timely file all reports required to be filed with the SEC pursuant to the
1934 Act, and the Company shall not terminate its status as an issuer
required to file reports under the 1934 Act even if the 1934 Act or the rules
and regulations thereunder would permit such termination. The Company
currently meets, and will take all necessary action to continue to meet, the
"registrant eligibility" requirements set forth in the general instructions
to Form S-3.

                d. USE OF PROCEEDS. The Company shall use the proceeds from
the sale of the Debentures and the Warrants for working capital and shall
not, directly or indirectly, use such proceeds for any loan to or investment
in any other corporation, partnership, enterprise or other person (except in
connection with its currently existing direct or indirect Subsidiaries).

                e. ADDITIONAL EQUITY CAPITAL; RIGHT OF FIRST REFUSAL. Subject
to the exceptions described below, the Company will not, without the prior
written consent of a majority-in-interest of the Buyers, negotiate or
contract with any party to obtain additional equity financing (including debt
financing with an equity component) that involves (A) the issuance of Common
Stock at a discount to the market price of the Common Stock on the date of
issuance (taking into account the value of any warrants or options to acquire
Common Stock issued in connection therewith) or (B) the issuance of
convertible securities that are convertible into an indeterminate number of
shares of Common Stock or (C) the issuance of warrants during the period (the
"LOCK-UP PERIOD") beginning on the Closing Date and ending on the later of
(i) one hundred eighty (180) days from the Closing Date and (ii) one hundred
fifty (150) days from the date the Registration Statement (as defined in the
Registration Rights Agreement) is declared effective (plus any days in which
sales cannot be made thereunder). In addition, subject to the exceptions
described below, the Company will not conduct any equity financing (including
debt with an equity component) ("FUTURE OFFERINGS") during the period
beginning on the Closing Date and ending one hundred eighty (180) days after
the end of the Lock-up Period unless it shall have first delivered to each
Buyer, at least fifteen (15) business days prior to the closing of

                                     -13-
<PAGE>

such Future Offering, written notice describing the proposed Future Offering,
including the terms and conditions thereof and proposed definitive
documentation to be entered into in connection therewith, and providing each
Buyer an option during the ten (10) day period following delivery of such
notice to purchase its pro rata share (based on the ratio that the aggregate
principal amount of Debentures purchased by it hereunder bears to the
aggregate principal amount of Debentures purchased hereunder) of the
securities being offered in the Future Offering on the same terms as
contemplated by such Future Offering (the limitations referred to in this
sentence and the preceding sentence are collectively referred to as the
"CAPITAL RAISING LIMITATIONS"). In the event the terms and conditions of a
proposed Future Offering are amended in any respect after delivery of the
notice to the Buyers concerning the proposed Future Offering, the Company
shall deliver a new notice to each Buyer describing the amended terms and
conditions of the proposed Future Offering and each Buyer thereafter shall
have an option during the ten (10) day period following delivery of such new
notice to purchase its pro rata share of the securities being offered on the
same terms as contemplated by such proposed Future Offering, as amended. The
foregoing sentence shall apply to successive amendments to the terms and
conditions of any proposed Future Offering. The Capital Raising Limitations
shall not apply to any transaction involving (i) issuances of securities in a
firm commitment underwritten public offering (excluding a continuous offering
pursuant to Rule 415 under the 1933 Act) or (ii) issuances of securities as
consideration for a merger, consolidation or purchase of assets, or in
connection with any strategic partnership or joint venture (the primary
purpose of which is not to raise equity capital), or in connection with the
disposition or acquisition of a business, product or license by the Company.
The Capital Raising Limitations also shall not apply (i) to the issuance of
securities upon exercise or conversion of the Company's options, warrants or
other convertible securities outstanding as of the date hereof, (ii) the
grant of additional options or warrants, or the issuance of additional
securities, under any Company stock option or restricted stock plan approved
by the Stockholders of the Company or (iii) the issuance of securities
pursuant to that certain Proposed Term Sheet for a Structured Equity Line of
Flexible Financing dated December 10, 1998.

                f. EXPENSES. At the Closing, the Company shall reimburse
Buyers in the amount of $11,500 for expenses incurred by it in connection
with the negotiation, preparation, execution, delivery and performance of
this Agreement and the other agreements to be executed in connection
herewith, including, without limitation, attorneys' and consultants' fees and
expenses.

                g. FINANCIAL INFORMATION. The Company agrees to send the
following reports to each Buyer until such Buyer transfers, assigns, or sells
all of the Securities: (i) within ten (10) days after the filing with the
SEC, a copy of its Annual Report on Form 10-K, its Quarterly Reports on Form
10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after
release, copies of all press releases issued by the Company or any of its
Subsidiaries; and (iii) contemporaneously with the making available or giving
to the stockholders of the Company, copies of any notices or other
information the Company makes available or gives to such stockholders.

                h. RESERVATION OF SHARES. The Company shall at all times have
authorized, and reserved for the purpose of issuance, a sufficient number of
shares of Common Stock to provide for the full conversion or exercise of the
outstanding Debentures and Warrants

                                     -14-

<PAGE>

and issuance of the Conversion Shares and Warrant Shares in connection
therewith (based on the Conversion Price of the Debentures or Exercise Price
of the Warrants in effect from time to time). The Company shall not reduce
the number of shares of Common Stock reserved for issuance upon conversion of
Debentures and exercise of the Warrants without the consent of each Buyer.
The Company shall use its best efforts at all times to maintain the number of
shares of Common Stock so reserved for issuance at no less than two (2) times
the number that is then actually issuable upon full conversion of the
Debentures and exercise of the Warrants (based on the Conversion Price of the
Debentures or Exercise Price of the Warrants in effect from time to time). If
at any time the number of shares of Common Stock authorized and reserved for
issuance is below the number of Conversion Shares and Warrant Shares issued
and issuable upon conversion of the Debentures and exercise of the Warrants
(based on the Conversion Price of the Debentures or Exercise Price of the
Warrants then in effect), the Company will promptly take all corporate action
necessary to authorize and reserve a sufficient number of shares, including,
without limitation, calling a special meeting of stockholders to authorize
additional shares to meet the Company's obligations under this Section 4(h),
in the case of an insufficient number of authorized shares, and using its
best efforts to obtain stockholder approval of an increase in such authorized
number of shares.

                i. LISTING. The Company shall promptly secure the listing of
the Conversion Shares and Warrant Shares upon each national securities
exchange or automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance) and, so long
as any Buyer owns any of the Securities, shall maintain, so long as any other
shares of Common Stock shall be so listed, such listing of all Conversion
Shares and Warrant Shares from time to time issuable upon conversion of the
Debentures or exercise of the Warrants. The Company will obtain and, so long
as any Buyer owns any of the Securities, maintain the listing and trading of
its Common Stock on the OTCBB, the Nasdaq National Market ("NASDAQ"), the
Nasdaq SmallCap Market ("NASDAQ SMALLCAP"), the New York Stock Exchange
("NYSE"), or the American Stock Exchange ("AMEX") and will comply in all
respects with the Company's reporting, filing and other obligations under the
bylaws or rules of the National Association of Securities Dealers ("NASD")
and such exchanges, as applicable. The Company shall promptly provide to each
Buyer copies of any notices it receives from the OTCBB and any other
exchanges or quotation systems on which the Common Stock is then listed
regarding the continued eligibility of the Common Stock for listing on such
exchanges and quotation systems.

                j. CORPORATE EXISTENCE. So long as a Buyer beneficially owns
any Debentures or Warrants, the Company shall maintain its corporate
existence and shall not sell all or substantially all of the Company's
assets, except in the event of a merger or consolidation or sale of all or
substantially all of the Company's assets, where the surviving or successor
entity in such transaction (i) assumes the Company's obligations hereunder
and under the agreements and instruments entered into in connection herewith
and (ii) is a publicly traded corporation whose Common Stock is listed for
trading on the OTCBB, Nasdaq, Nasdaq SmallCap, NYSE or AMEX.

                k. NO INTEGRATION. The Company shall not make any offers or
sales of any security (other than the Securities) under circumstances that
would require registration of

                                     -15-

<PAGE>

the Securities being offered or sold hereunder under the 1933 Act or cause
the offering of the Securities to be integrated with any other offering of
securities by the Company for the purpose of any stockholder approval
provision applicable to the Company or its securities.

                l. SUBSEQUENT INVESTMENT. The Company and the Buyers agree
that, upon the declaration of effectiveness of the Registration Statement to
be filed pursuant to the Registration Rights Agreement (the "EFFECTIVE DATE
"), provided that the trading price of the Common Stock is at least $.15 for
the ten (10) consecutive trading days immediately preceding the Effective
Date, the Buyers will be obligated to purchase additional debentures
("ADDITIONAL DEBENTURES") in the aggregate principal amount of Two Hundred
Fifty Thousand Dollars ($250,000) and additional warrants ("ADDITIONAL
WARRANTS") to purchase an aggregate of 500,000 shares of Common Stock for an
aggregate purchase price of Two Hundred Fifty Thousand Dollars ($250,000),
with the closing of such purchase to occur as soon as possible but no later
than within fifteen (15) days of the Effective Date. The terms of the
Additional Debentures and the Additional Warrants shall be identical to the
terms of the Debentures and the Warrants to be issued on the Closing Date,
provided that the Fixed Conversion Price (as defined in the Debentures) for
the Additional Debentures shall be $0.345. The Common Stock underlying the
Additional Debentures and the Additional Warrants shall be Registrable
Securities (as defined in the Registration Rights Agreement) and shall be
included in the Registration Statement to be filed pursuant to the
Registration Rights Agreement.

                m. SECURITY FOR DEBENTURES. The parties agree that, in the
event that any party currently having a security interest in the Company's
assets releases such assets from such security interest or is repaid by the
Company for the indebtedness relating to such security interest, the Company
will grant a security interest to the holders of the Debentures to secure the
indebtedness thereunder.

            5. TRANSFER AGENT INSTRUCTIONS. The Company shall issue
irrevocable instructions to its transfer agent to issue certificates,
registered in the name of each Buyer or its nominee, for the Conversion
Shares and Warrant Shares in such amounts as specified from time to time by
each Buyer to the Company upon conversion of the Debentures or exercise of
the Warrants in accordance with the terms thereof (the "IRREVOCABLE TRANSFER
AGENT INSTRUCTIONS"). Prior to registration of the Conversion Shares and
Warrant Shares under the 1933 Act or the date on which the Conversion Shares
and Warrant Shares may be sold pursuant to Rule 144 without any restriction
as to the number of Securities as of a particular date that can then be
immediately sold, all such certificates shall bear the restrictive legend
specified in Section 2(g) of this Agreement. The Company warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred
to in this Section 5, and stop transfer instructions to give effect to
Section 2(f) hereof will be given by the Company to its transfer agent and
that the Securities shall otherwise be freely transferable on the books and
records of the Company as and to the extent provided in this Agreement and
the Registration Rights Agreement. Nothing in this Section shall affect in
any way the Buyer's obligations and agreement set forth in Section 2(g)
hereof to comply with all applicable prospectus delivery requirements, if
any, upon re-sale of the Securities. If a Buyer provides the Company with (i)
an opinion of counsel in form, substance and scope customary for opinions in
comparable transactions, to the effect that a public sale or transfer of such
Securities may be made without

                                     -16-

<PAGE>

registration under the 1933 Act and such sale or transfer is effected or (ii)
the Buyer provides reasonable assurances that the Securities can be sold
pursuant to Rule 144, the Company shall permit the transfer, and, in the case
of the Conversion Shares and Warrant Shares, promptly instruct its transfer
agent to issue one or more certificates, free from restrictive legend, in
such name and in such denominations as specified by such Buyer. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Buyers, by vitiating the intent and purpose of the
transactions contemplated hereby. Accordingly, the Company acknowledges that
the remedy at law for a breach of its obligations under this Section 5 will
be inadequate and agrees, in the event of a breach or threatened breach by
the Company of the provisions of this Section, that the Buyers shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate transfer, without the
necessity of showing economic loss and without any bond or other security
being required.

            6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL. The obligation
of the Company hereunder to issue and sell the Debentures and Warrants to a
Buyer at the Closing is subject to the satisfaction, at or before the Closing
Date of each of the following conditions thereto, provided that these
conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion:

                a. The applicable Buyer shall have executed this Agreement
and the Registration Rights Agreement, and delivered the same to the Company.

                b. The applicable Buyer shall have delivered the Purchase
Price in accordance with Section 1(b) above.

                c. The representations and warranties of the applicable Buyer
shall be true and correct in all material respects as of the date when made
and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date), and the
applicable Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the applicable Buyer
at or prior to the Closing Date.

                d. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.

            7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE. The
obligation of each Buyer hereunder to purchase the Debentures and Warrants at
the Closing is subject to the satisfaction, at or before the Closing Date of
each of the following conditions, provided that these conditions are for such
Buyer's sole benefit and may be waived by such Buyer at any time in its sole
discretion:

                                     -17-

<PAGE>

                a. The Company shall have executed this Agreement and the
Registration Rights Agreement, and delivered the same to the Buyer.

                b. The Company shall have delivered to such Buyer duly
executed Debentures (in such denominations as the Buyer shall request) and
Warrants in accordance with Section 1(b) above.

                c. The Irrevocable Transfer Agent Instructions, in form and
substance satisfactory to a majority-in-interest of the Buyers, shall have
been delivered to and acknowledged in writing by the Company's Transfer Agent.

                d. The representations and warranties of the Company shall be
true and correct in all material respects as of the date when made and as of
the Closing Date as though made at such time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the
covenants, agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior to the
Closing Date. The Buyer shall have received a certificate or certificates,
executed by the chief executive officer of the Company, dated as of the
Closing Date, to the foregoing effect and as to such other matters as may be
reasonably requested by such Buyer including, but not limited to certificates
with respect to the Company's Certificate of Incorporation, By-laws and Board
of Directors' resolutions relating to the transactions contemplated hereby.

                e. No litigation, statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by or in any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which prohibits the consummation of any of the
transactions contemplated by this Agreement.

                f. The Conversion Shares and Warrant Shares shall have been
authorized for quotation on the OTCBB and trading in the Common Stock on the
OTCBB shall not have been suspended by the SEC or the OTCBB.

                g. The Buyer shall have received an opinion of the Company's
counsel, dated as of the Closing Date, in form, scope and substance
reasonably satisfactory to the Buyer and in substantially the same form as
EXHIBIT "D" attached hereto.

                h. The Buyer shall have received an officer's certificate
described in Section 3(c) above, dated as of the Closing Date.

            8.  GOVERNING LAW; MISCELLANEOUS.

                a. GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of California without
regard to the principles of conflict of laws. The parties hereto hereby
submit to the exclusive jurisdiction of the United

                                     -18-

<PAGE>

States Federal Courts located in Los Angeles, California with respect to any
dispute arising under this Agreement, the agreements entered into in
connection herewith or the transactions contemplated hereby or thereby. The
party which does not prevail in any dispute arising under this Agreement
shall be responsible for all fees and expenses, including attorneys' fees,
incurred by the prevailing party in connection with such dispute.

                b. COUNTERPARTS; SIGNATURES BY FACSIMILE. This Agreement may
be executed in one or more counterparts, all of which shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party. This Agreement, once
executed by a party, may be delivered to the other party hereto by facsimile
transmission of a copy of this Agreement bearing the signature of the party
so delivering this Agreement.

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

                d. SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this
Agreement in any other jurisdiction.

                e. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the
instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to
such matters. No provision of this Agreement may be waived or amended other
than by an instrument in writing signed by the party to be charged with
enforcement.

                f. NOTICES. Any notices required or permitted to be given
under the terms of this Agreement shall be sent by certified or registered
mail (return receipt requested) or delivered personally or by courier
(including a recognized overnight delivery service) or by facsimile and shall
be effective five days after being placed in the mail, if mailed by regular
United States mail, or upon receipt, if delivered personally or by courier
(including a recognized overnight delivery service) or by facsimile, in each
case addressed to a party. The addresses for such communications shall be:

                   If to the Company:

                          American Technologies Group, Inc.
                          1017 South Mountain Avenue
                          Monrovia, CA 91016
                          Attention: Chief Executive Officer
                          Facsimile: (626) 357-6551

                                     -19-

<PAGE>

                   With copy to:

                          American Technologies Group, Inc.
                          1017 South Mountain Avenue
                          Monrovia, CA 91016
                          Attention: General Counsel
                          Facsimile: (626) 357-4464

             If to a Buyer: To the address set forth immediately below
such Buyer's name on the signature pages hereto.

                  With copy to:

                          Bristol Capital, LLC
                          1177 San Vicente Blvd.
                          Suite 702
                          Los Angeles,  CA 90049
                          Attention: Diana Derycz
                          Facsimile: (520) 222-0981

             Each party shall provide notice to the other party of any
change in address.

                g. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and
assigns. Neither the Company nor any Buyer shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the
other. Notwithstanding the foregoing, subject to Section 2(f), any Buyer may
assign its rights hereunder to any person that purchases Securities in a
private transaction from a Buyer or to any of its "affiliates," as that term
is defined under the 1934 Act, without the consent of the Company.

                h. THIRD PARTY BENEFICIARIES. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.

                i. SURVIVAL. The representations and warranties of the
Company and the agreements and covenants set forth in Sections 3, 4, 5 and 8
shall survive the closing hereunder notwithstanding any due diligence
investigation conducted by or on behalf of the Buyers. The Company agrees to
indemnify and hold harmless each of the Buyers and all their officers,
directors, employees and agents for loss or damage arising as a result of or
related to any breach or alleged breach by the Company of any of its
representations, warranties and covenants set forth in Sections 3 and 4
hereof or any of its covenants and obligations under this Agreement or the
Registration Rights Agreement, including advancement of expenses as they are
incurred.

                                     -20-

<PAGE>

                j. PUBLICITY. The Company and each of the Buyers shall have
the right to review a reasonable period of time before issuance of any press
releases, SEC, OTCBB or NASD filings, or any other public statements with
respect to the transactions contemplated hereby; PROVIDED, HOWEVER, that the
Company shall be entitled, without the prior approval of each of the Buyers,
to make any press release or SEC, OTCBB (or other applicable trading market)
or NASD filings with respect to such transactions as is required by
applicable law and regulations (although each of the Buyers shall be
consulted by the Company in connection with any such press release prior to
its release and shall be provided with a copy thereof and be given an
opportunity to comment thereon).

                k. FURTHER ASSURANCES. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out
the intent and accomplish the purposes of this Agreement and the consummation
of the transactions contemplated hereby.

                l. NO STRICT CONSTRUCTION. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied
against any party.

                                     -21-

<PAGE>

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

AMERICAN TECHNOLOGIES GROUP, INC.

By:      /s/ Lawrence J. Brady
         ---------------------
         Lawrence J. Brady
         Chairman and Chief Executive Officer

BANK INSINGER DE BEAUFORT N.V.

By:      /s/ J.J. Human                              /s/ Frans Kee
         --------------                              -------------
         Name: J. J. Human                           Frans Kee
         Title: Director                             Director

ADDRESS:

         Herengtecht 551
         1017 BW Amsterdam
         Facsimile:        (3120) 520 9539
         Telephone:        (3120) 520 9595

AGGREGATE SUBSCRIPTION AMOUNT:

         Aggregate Principal Amount of Debentures:                      $125,000
         Number of Warrants:                                             250,000
         Aggregate Purchase Price:                                      $125,000

                                     -22-

<PAGE>

CONNAUGHT GLOBAL LTD.

By:      /s/ Peter Anthony Barnes
         ------------------------
         Name: Peter Anthony Barnes
         Title: Director

ADDRESS:

         Westaway Chambers
         39 Don Street
         St. Helier, Jersey
         JE4 8UA
         Channel Islands
         Facsimile:        01536-733979
         Telephone:        01536-872766

AGGREGATE SUBSCRIPTION AMOUNT:

         Aggregate Principal Amount of Debentures:                      $125,000
         Number of Warrants:                                             250,000
         Aggregate Purchase Price:                                      $125,000

                                     -23-<PAGE>

                             STOCK REGISTRATION AGREEMENT

       This Stock Registration Agreement (this "Agreement") dated as of
January 1, 2000, is entered into by and among Lone Star Technologies, Inc., a
Delaware corporation (the "Corporation"), Fintube Limited Partnership, a
Delaware limited partnership (the "Fintube Representative"), Yorktown Energy
Partners, L.P., a Delaware limited partnership (the "Yorktown
Representative"), Brown University Third Century Fund, Inc., a Rhode Island
corporation (the "Brown Representative"), Warburg, Dillon, Reed, L.L.C., a
Delaware limited liability company (the "WDR Representative") and Ticonderoga
Capital, Inc., a Delaware corporation (the "Ticonderoga Representative"), and
the Stockholders (as defined hereafter).

                                       RECITALS

       WHEREAS, pursuant to the Asset Purchase Agreement dated November 16,
1999 by and among the Corporation, Fintube Technologies, Inc., an Oklahoma
corporation, and the Fintube Representative (the "Purchase Agreement"), the
Stockholders will receive an aggregate of 760,237 shares of the Corporation's
common stock, par value $1.00 per share (the "Common Stock").

       WHEREAS, as set forth in the Purchase Agreement, the Corporation has
agreed to grant to the Stockholders certain registration rights with respect
to their Registrable Securities (defined hereafter).

       NOW, THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

       1.     DEFINITIONS.

       For purposes of this Agreement, the following terms shall have the
respective meanings assigned to them in this Section 1 or in the recitals
above or the sections below.

       "Closing Date" shall mean the date on which the consummation of the
transactions contemplated by the Purchase Agreement occurs.

       "Commission" shall mean the Securities and Exchange Commission or any
other Federal agency at the time administering the Securities Act.

       "Exchange Act" shall mean the Securities Exchange Act of 1934, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

       "Person" shall mean a corporation, an association, a partnership, a
business, an individual, a governmental or political subdivision thereof or a
governmental agency.

                                      -1-

<PAGE>

       "Registrable Securities" shall mean the shares of Common Stock issued
to the Stockholders pursuant to the Purchase Agreement and any securities
issued or issuable with respect to any Common Stock referred to in the
foregoing caused by way of stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or
other reorganization or otherwise.

       "Securities Act" shall mean the Securities Act of 1933, or any similar
Federal statute, and the rules and regulations of the Commission thereunder,
all as of the same shall be in effect at the time.  References to a
particular section of the Securities Act of 1933 shall include a reference to
the comparable section, if any, of any such similar federal statute.

       "Stockholders" shall mean the Designated Recipients (as defined in the
Purchase Agreement) who prior to the execution of this Agreement have
provided to the Corporation their executed and completed Accredited Investor
Questionnaires, Unaccredited Investor Letters and/or Accredited Investor
Letters.  The names of these Persons are set forth on Exhibit "A" attached
hereto and incorporated herein by reference.

       2.     REPRESENTATIVES.  For the purposes of this Agreement, the
Stockholders listed on Exhibit "B" attached hereto and incorporated herein by
reference authorize the Fintube Representative to act on their behalf and to
cooperate with the Corporation to fulfill their obligations set forth herein,
the Stockholders listed on Exhibit "C" attached hereto and incorporated
herein by reference authorize the Yorktown Representative to act on their
behalf and to cooperate with the Corporation to fulfill their obligations set
forth herein, the Stockholders listed on Exhibit "D" attached hereto and
incorporated herein by reference authorize the Brown Representative to act on
their behalf and to cooperate with the Corporation to fulfill their
obligations set forth herein, the Stockholders listed on Exhibit "E" attached
hereto and incorporated herein by reference authorize the WDR Representative
to act on their behalf and to cooperate with the Corporation to fulfill their
obligations set forth herein and the Stockholders listed on Exhibit "F"
attached hereto and incorporated herein by reference authorize the
Ticonderoga Representative to act on their behalf and to cooperate with the
Corporation to fulfill their obligations set forth herein, (collectively, the
Fintube Representative, the Yorktown Representative, the Brown
Representative, the WDR Representative and the Ticonderoga Representative are
referred to as the "Representatives").  A Representative shall not for any
purpose under this Agreement be deemed to be the agent or representative of a
Stockholder not set forth on the above designated Exhibit applicable to such
Representative.  Any requests by the Stockholders relating to the
responsibilities and obligations of the Corporation will be made by the
Representatives on behalf of their respective Stockholders.  Additionally,
the Corporation is authorized to act directly with the Representatives rather
than the individual Stockholders to fulfill any or all of its obligations
under this Agreement and to facilitate the registration of the Registrable
Securities.

       3.     REGISTRATION UNDER SECURITIES ACT, ETC.

                                      -2-

<PAGE>

       a.     REGISTRATION RIGHTS. Promptly after the Closing Date, the
Representatives will provide to the Corporation all information, including
the Fintube Representative's financial statements, regarding the
Representatives and the Stockholders that is required by the Securities Act
to be included in the registration statement on Form S-3 (the "Registration
Statement").  Thirty (30) days after the Closing Date or five (5) days after
receiving all information from the Representatives that is required to be
included in the Registration Statement by the Securities Act (whichever
occurs later), the Corporation shall file the Registration Statement pursuant
to Rule 415 under the Securities Act (or any similar rule that may be adopted
by the Commission) covering the sale of all the Registrable Securities in
accordance with this Section 3 and shall cause the registration to become
effective and the Registrable Securities to be freely tradeable within one
hundred twenty (120) days after the Closing Date; provided, however, if the
Commission elects to review the Registration Statement, the Corporation shall
use its best efforts to cause the Registration Statement to become effective
and the Registrable Securities to be freely tradeable as soon as practicable
after receiving the Commission's comments.  The Corporation has provided the
Fintube Representative with a draft of the Registration Statement.

       b.     REGISTRATION PROCEDURES.  After the Closing Date the
Corporation will:

              i.     Prepare and file the Registration Statement with the
Commission in accordance with Section 3.1 of this Agreement.

              ii.    Prepare and file with the Commission such amendments and
supplements to the Registration Statement and prospectus used in connection
therewith including any preliminary prospectus or amended prospectus as may
be necessary to keep the Registration Statement continuously effective and to
comply with the provisions of the Securities Act with respect to the offer of
the Registrable Securities during the period that will expire on the earlier
of (i) the date that is two hundred forty (240) days after the effective date
of the Registration Statement, or (ii) the date on which the distribution of
all the Registrable Securities covered by the Registration Statement is
completed.

              iii.   Furnish to the Representatives who will then distribute
to the Stockholders such number of conformed copies of the Registration
Statement and of each such amendment and supplement thereto (in each case
including all exhibits), and such number of copies of the prospectus
(including any preliminary prospectus or supplemental or amended prospectus)
as the Representatives on behalf of the Stockholders may reasonably request
in order to facilitate the sale and distribution of the Registrable
Securities.

              iv.    Prior to any public offering of Registrable Securities,
register or qualify or cooperate with the Representatives, the underwriters,
if any, and respective counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions in the United States as the
Representatives on behalf of the Stockholders or an underwriter reasonably
requests in writing; keep each such registration or qualification effective
during the period the Registration Statement is required to be kept
effective;

                                      -3-

<PAGE>

provided, however, the Corporation will not be required in connection
therewith or as a condition thereto to qualify generally to do business or
subject itself to general service of process in any such jurisdiction where
it is not then so subject.

              v.     Notify the Representatives, at any time when a
prospectus relating to the Registration Statement is required to be delivered
under the Securities Act, upon discovery that, or upon the happening of any
event as a result of which, the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and promptly prepare and furnish to
the Representatives a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were
made.

              vi.    Otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and furnish to the
Representatives at least five (5) business days prior to the filing thereof a
copy of any amendment or supplement to such registration statement or
prospectus and shall not file any thereof to which the Representatives on
behalf of the Stockholders shall have reasonably objected on the grounds that
such amendment or supplement does not comply in all material respects with
the requirements of the Securities Act.

              vii.   Provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by the Registration
Statement from and after a date not later than the effective date of the
Registration Statement.

              viii.  Use its best efforts (i) to list all Registrable
Securities covered by the Registration Statement on any securities exchange
on which any of the Corporation's securities of the same class as the
Registrable Securities are then listed and (ii) for two (2) years after the
Closing Date to avoid taking any action which would cause the Registrable
Securities to cease being eligible for inclusion on any such securities
exchange on which they may become listed other than in connection with the
Corporation's decision to list its securities of the same class as the
Registrable Securities on another securities exchange.

              ix.    Notify the Representatives (i) as to the filing of the
Registration Statement and of all amendments or supplements thereto filed
prior to the effective date of such Registration Statement, (ii) promptly
after the Corporation shall receive notice thereof, of the time when such
Registration Statement became effective or when any amendment or supplement
to any prospectus forming a part of said Registration Statement has been
filed, and (iii) promptly, of any request by the Commission for the amending
or supplementing of such Registration Statement or prospectus or for
additional information.

                                      -4-

<PAGE>

              x.     Prepare and file with the Commission, promptly upon the
written request of the Representatives, any amendments or supplements to such
Registration Statement or prospectus which may be reasonably necessary or
advisable in connection with the distribution of the Registrable Securities,
including amendments to add as selling stockholders under the Registration
Statement or prospectus those Persons whose names were removed from Schedule
1.1 to the Purchase Agreement pursuant to the provisions of Section 2.3(b) of
the Purchase Agreement if such Persons are unable to lawfully sell to the
public the Registrable Securities they have acquired except as part of a
requested offering.

              xi.    Advise the Representatives promptly after the
Corporation shall receive notice or obtain knowledge of the issuance of any
stop order by the Commission suspending the effectiveness of any such
Registration Statement or amendment thereto or of the initiation or
threatening of any proceeding for that purpose, and promptly use its
reasonable efforts to prevent the issuance of any stop order or obtain its
withdrawal promptly if such stop order should be issued.

       c.     LIMITATIONS.  The Corporation's obligation to take or continue
any action to effect the Registration Statement pursuant to Section 3.2 of
this Agreement shall be subject to the following:

              i.     If any of the audited financial statements required to
be included in the Registration Statement for the most recent fiscal year
ended are not available, the Corporation shall have the right to delay the
effectiveness of the Registration Statement for such period of time until the
Corporation receives such required audited financial statements.

              ii.    If the Corporation is in good faith engaged in
activities relating to a material event or transaction that has not yet been
publicly disclosed, the Corporation shall have the right to delay the filing
of the Registration Statement or, if filed, the effective date of the
Registration Statement or, if effective, the filing of an amendment or
supplement to the Registration Statement until such time as the material
event or transaction is disclosed to the public by the Corporation (but in no
event longer than 45 days).  In that event, the periods defined in Section
3.2.2(i) and 3.2.8 shall be extended by the number of days of such delay.
There shall be no more than three (3) such events during the time period set
forth in Section 3.2.2(i) as extended by this Section 3.3.2.

              iii.   The registration shall not be deemed to have been
effected (i) unless it has become effective and remained effective for the
period specified in Section 3.2.2 or (ii) if, after it has become effective,
such registration is terminated by a stop order, injunction or other order of
the Commission or other governmental agency or court.  If such registration
is terminated by a stop order, injunction or other order of the Commission or
other governmental agency or court, the periods defined in Sections 3.2.2(i)
and 3.2.8 shall be extended by the number of days of such delay.

       4.     PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.  The Stockholders
will not sell the Registrable Securities in an underwritten offering unless
(a) the Stockholders agree to sell the Registrable Securities on the basis
provided in any underwriting arrangements, and (b) the Representatives
deliver to the Corporation completed and executed questionnaires, powers of

                                      -5-

<PAGE>

attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements from each of the
Stockholders.

       5.     EXPENSES.  The Corporation will bear all registration fees, the
New York Stock Exchange filing fees, all fees and expenses of complying with
securities or blue sky laws (including fees and disbursements of counsel for
the Corporation in connection with blue sky qualifications and filings), all
word processing, duplicating and printing expenses, all messenger and
delivery expenses, the fees and disbursements of counsel for the Corporation
and of its independent public accountants and all other fees and expenses in
connection with the registration and sale of the Registrable Securities
pursuant to this Agreement, except for transfer taxes payable on the sale of
the Registrable Securities, the fees and expenses of counsel to the
Representatives and Stockholders, and the Representatives' and Stockholders'
accountants and fees and commissions of brokers, dealers and underwriters.

       6.     RECALL OF PROSPECTUSES, ETC.  With respect to the Registration
Statement or any amendment thereto filed with the Commission pursuant to this
Agreement, if, at any time, the Corporation in good faith notifies the
Representatives that an amendment or supplement to the Registration Statement
or amendment to the prospectus included therein is necessary or appropriate,
the Representatives shall so inform the Stockholders and the Representatives
and the Stockholders will forthwith cease selling and distributing shares
thereunder and will forthwith redeliver to the Corporation all copies of the
Registration Statement and prospectuses then in their possession or under
their control.  The Corporation will use its best efforts to cause any such
amendment or supplement to become effective as soon as practicable (except as
provided in Section 3.3.2) and will promptly furnish to the Representatives
who will then distribute to the Stockholders a reasonable number of copies of
such amended or supplemented prospectus (and the period defined in both
Section 3.2.2(i) and 3.2.8 shall be extended by the period from the date on
which the Stockholders ceased selling and distributing shares thereunder to
the date on which such amendment or supplement becomes effective).

       7.     COOPERATION BY THE REPRESENTATIVES AND THE STOCKHOLDERS.

       a.     The Representatives and the Stockholders will cooperate with
the Corporation in connection with the registration of Registrable Securities
pursuant to this Agreement, and the Representatives will furnish and the
Stockholders will supply to the Representatives (i) such information as may
be reasonably required by the Corporation or the Commission in connection
therewith and (ii) such representations, undertakings and agreements as may
be required by the Commission in connection therewith.

       b.     Upon the acquisition of any shares of the Corporation's Common
Stock in addition to the number of shares set forth opposite the signature on
this Agreement of each Stockholder, each Stockholder shall promptly advise
the appropriate Representative of such acquisition, and such Representative
shall so inform the Corporation.

                                      -6-

<PAGE>

       8.     INDEMNIFICATION.

       a.     In the event of any registration of any securities under the
Securities Act pursuant to this Agreement, the Corporation will indemnify and
hold harmless the Representatives and the Stockholders and each other Person,
if any, who controls a Representative or a Stockholder within the meaning of
the Securities Act (the "Fintube Indemnified Parties"), against any losses,
claims, damages or liabilities, joint or several, to which any such Fintube
Indemnified Party may become subject, under the Securities Act or otherwise
as the same are incurred, insofar as such losses, claims, damages or
liabilities (or action in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained
in such Registration Statement or preliminary prospectus (if used prior to
the effective date of such Registration Statement) or final or summary
prospectus contained therein (if used during the period the Corporation is
required to keep the Registration Statement effective), or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements made therein not misleading, and will
reimburse the Fintube Indemnified Parties for any legal or any other expenses
reasonably incurred by the Fintube Indemnified Parties in connection with
investigating or defending any such action or claim, excluding any amounts
paid in settlement of any litigation, commenced or threatened, if such
settlement is effected without prior written consent of the Corporation such
consent not to be unreasonably withheld or delayed; provided, however, the
Corporation will not be liable to any Fintube Indemnified Party in any such
case to the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon an untrue statement or omission or alleged
untrue statement or omission made in said Registration Statement, said
preliminary prospectus or said final or summary prospectus or any amendment
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Corporation by any Fintube Indemnified Party,
including without limitation the Fintube Representative, specifically for use
in the preparation thereof; and provided further that the indemnity agreement
contained in this Section 8 with respect to any preliminary prospectus shall
not inure to the benefit of the Stockholders or to any Person selling the
same in respect of any loss, claim, damage, liability or action asserted by
someone who purchased shares from such Person if a copy of the final
prospectus (as the same may be amended or supplemented) in connection with
the Registration Statement was not sent or given to such Person with or prior
to written confirmation of the sale and if a copy of the final prospectus (as
the same may be amended or supplemented) was promptly delivered to the
Representatives by the Corporation and if the untrue statement or omission or
alleged untrue statement or omission of a material fact contained in such
preliminary prospectus was corrected in the final prospectus.

       b.     In the event of any registration of Registrable Securities
under the Securities Act pursuant to this Agreement, the Representatives, on
a several basis in proportion to the relative partnership interests in
Fintube Limited Partnership represented by them (except to the extent
indemnification under this Section 8.2 is recovered directly from any of the
Stockholders represented by such Representative), and the Stockholders, on a
several basis in proportion to their relative partnership interests in
Fintube Limited Partnership, will indemnify and hold harmless the
Corporation, each of its directors and officers, and each other Person, if
any, who controls the

                                      -7-

<PAGE>

Corporation within the meaning of the Securities Act (the "Lone Star
Indemnified Parties"), against any losses, claims, damages or liabilities,
joint or several, to which any such Lone Star Indemnified Party may become
subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or action in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact contained in such Registration Statement or preliminary
prospectus or final or summary prospectus contained therein, or any amendment
or supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements made therein not misleading, and
will reimburse such Lone Star Indemnified Parties for any legal or any other
expenses as reasonably incurred by them in connection with investigating or
defending any such action or claim, excluding any amounts paid in settlement
of any litigation, commenced or threatened, if such settlement is effected
without prior written consent of the Representatives, the Stockholders or the
Representatives on behalf of the Stockholders, such consent not to be
unreasonably withheld or delayed; but in all cases only if, and to the
extent, that any such loss, claim, damage, liability or expense arises out of
or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission therein made in reliance upon and in conformity with
written information furnished to the Corporation by (i) such Stockholder or
its affiliates or by its Representative on the Stockholder's behalf, (ii)
such Representative or its affiliates, or (iii) the Fintube Representative,
other than as related to information furnished by the Fintube Representative
specifically and solely on behalf of its various represented Stockholders in
their capacities as such, in any case specifically for use in the preparation
of such Registration statement or prospectus.  The amount of liability of a
Stockholder resulting from this Section 8.2 shall not exceed the total
proceeds to such Stockholder from the sale of the Registrable Securities
pursuant to the Registration Statement.  The amount of liability of a
Representative resulting from this Section 8.2 shall not exceed the total
proceeds to such Representative and/or the Stockholders represented by it
from the sale of the Registrable Securities pursuant to the Registration
Statement less the amount of indemnification under this Section 8.2 recovered
directly from any of such represented Stockholders.  For the purposes of this
Section 8, all information relating to the various Stockholders or
Representatives included in the Registration Statement or preliminary
prospectus or final or summary prospectus contained therein is deemed to have
been provided by such Stockholder or its Representative only, except that all
information furnished by the Fintube Representative relating to Fintube
Limited Partnership and its affiliates, other than information furnished by
the Fintube Representative specifically and solely on behalf of its various
represented Stockholders in their capacities as such, included in the
Registration Statement or preliminary prospectus or final prospectus
contained therein is deemed to have been provided by each and every
Stockholder and Representative.

       c.     Promptly after receipt by a party entitled to indemnification
under subsection 8.1 or 8.2 hereof of notice of the commencement of any
action, such Fintube Indemnified Party or Lone Star Indemnified Party (in
either case, the "Indemnified Party") will, if a claim in respect thereof is
to be made against the Person obligated to provide indemnification under
either of such subsections (the "Indemnifying Party"), notify the
Indemnifying Party in writing of the commencement thereof.  In case any such
action is brought against the Indemnified Party and it shall so notify the

                                      -8-

<PAGE>

Indemnifying Party of the commencement thereof, the Indemnifying Party shall
be entitled to participate in, and, to the extent that it so chooses, to
assume the defense thereof with counsel reasonably satisfactory to such
Indemnified Party, and, after notice from the Indemnifying Party that it so
chooses, such Indemnifying Party shall not be liable for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with
the defense thereof, provided, however, that if the Indemnifying Party fails
to take reasonable steps necessary to defend such claim within twenty (20)
days after receiving notice from the Indemnified Party that the Indemnified
Party believes the Indemnifying Party has failed to take such steps, the
Indemnified Party may assume its own defense and the Indemnifying Party shall
be liable for any expenses therefor.  If, in the reasonable judgment of the
Indemnified Party, a conflict of interest does or may exist in respect of
such claim, the Indemnified Party or Parties shall have the right to select
separate counsel to participate in the defense of such action on behalf of
such Indemnified Party or Parties, in which case the Indemnifying Party shall
bear costs of such defense; provided, however, that the Indemnifying Party
shall not be obligated to pay such fees and expenses for more than one firm
to separately represent all the Indemnified Parties in all jurisdictions. If
more than one firm is selected as separate counsel, the Indemnifying Party
shall pay the Representatives an amount equal to the average of the fees and
expenses of all the firms so solicited.  The Indemnity agreements in this
Section 8.3 shall be in addition to any liabilities which the Indemnifying
Parties may have pursuant to law.

       d.     If the indemnification provided for in this Section 8 from the
Indemnifying Party is unavailable to an Indemnified Party hereunder in
respect of any losses, claims, damages, liabilities or expenses referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such losses, claims, damages, liabilities or expenses
taking into account the relative benefit of the registration of the
Registrable Securities to the Indemnifying Party and the Indemnified Party
and the relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations.  The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the Parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action.  For the purposes of this Section 8, all information relating to the
various Representatives included in the Registration Statement or preliminary
prospectus or final or summary prospectus contained therein is deemed to have
been provided by the such Representatives, except that all information
furnished by the Fintube Representative relating to Fintube Limited
Partnership and its affiliates, other than information furnished by the
Fintube Representative specifically and solely on behalf of its various
represented Stockholders in their capacities as such, included in the
Registration Statement or preliminary prospectus or final prospectus
contained therein is deemed to have been provided by each and every
Stockholder and Representative.  The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set

                                      -9-

<PAGE>

forth in this Section 8, any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.

       The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata
allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the immediately preceding
paragraph.  No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.

       The indemnification required by this Section 8 shall be made by prompt
payments of the amounts thereof during the course of the investigation or
defense, as and when bills are received or expense, loss, damage or liability
is incurred.

       9.     SALES UNDER RULE 144.  With a view to making available to the
Stockholders the benefits of Rule 144 promulgated under the Securities Act
and any other similar rule or regulation of the Commission that may at any
time permit the Stockholders to sell the Registrable Securities without
registration:

              (1)    The Corporation agrees to (i) file with the Commission in a
       timely manner all reports required of the Corporation under the Exchange
       Act for so long as the Registrable Securities shall be outstanding, and
       (ii) after any sale of Registrable Securities pursuant to Rule 144, to
       the extent allowed by law and upon the Corporation's receipt of a written
       opinion of counsel reasonably satisfactory to it, cause any restrictive
       legends to be removed and any transfer restrictions to be rescinded with
       respect to such Registrable Securities;

              (2)    The Corporation represents and warrants to the
       Representatives and the Stockholders that is has filed registration
       statements pursuant to the requirements of Section 12 of the Exchange Act
       and/or pursuant to the requirements of the Securities Act, and has filed
       the reports required to be filed by it under the Securities Act and the
       Exchange Act and the Rules and Regulations adopted by the Commission
       thereunder; and

              (3)    The Corporation represents and warrants to the
       Representatives and the Stockholders that it currently meets the
       applicable eligibility requirements for use of registration statement on
       Form S-3 under the Securities Act.

       10.    REMOVAL OF LEGEND.  The Corporation agrees to remove any
legends on certificates representing Registrable Securities describing
transfer restrictions applicable to such securities upon the sale of such
securities pursuant to an effective Registration Statement under the
Securities Act.

       11.    NOTICES.  Any notice to be given by any party hereunder to any
other shall be in writing, mailed by certified or registered mail, postage
prepaid and return receipt requested, and shall be addressed to the other
party at the addresses listed on the signature pages hereof.  All such
notices

                                      -10-

<PAGE>

shall be deemed to be given three (3) days after the date of mailing thereof.
Notice to a Stockholder shall be valid if given to such Stockholder's
respective Representative in accordance with the terms and provisions set
forth in this Section 11.

       12.    MODIFICATION.  Notwithstanding anything to the contrary in this
Agreement or otherwise, no modification, amendment or waiver of any of the
provisions of this Agreement shall be effective unless in writing and signed
by the Corporation and the Stockholders.

       13.    PARTIAL INVALIDITY.  If any clause, sentence, paragraph,
section or part of this Agreement shall be deemed invalid, unenforceable or
against public policy, the part which is invalid, unenforceable or contrary
to public policy shall not affect, impair, invalidate or nullify the
remainder of this Agreement, but the invalidity, unenforceability or
contrariness to public policy shall be confined only to the clause, sentence,
paragraph, section or part of this Agreement so invalidated, unenforceable or
against public policy.

       14.    CONSTRUCTION.  The language in all parts of this Agreement
shall in all cases be construed simply, according to its fair meaning, and
shall not be construed strictly for or against either of the parties hereto.

       15.    GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
ACCORDING TO THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS CONFLICTS
OF LAW PRINCIPLES.

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

       17.    SUCCESSORS AND ASSIGNS.  This Agreement is not assignable by
the Stockholders.  This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the Corporation and the Representatives and
their respective successors and assigns and by the Stockholders and their
respective heirs, legal representatives and assignees by operation of law.

       18.    ATTORNEYS' FEES.  In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the successful party shall be entitled to
recover and the court shall award, reasonable attorneys' fees in addition to
its costs and expenses and any other available remedy.

       19.    REMEDY.  In the event of a breach by the Corporation of its
obligations under this Agreement, the Stockholders and the Representatives,
in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of
their rights under this Agreement.  The Corporation agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of
a breach by it of any of the provisions of

                                      -11-

<PAGE>

this Agreement and hereby agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.

       20.    NO INCONSISTENT AGREEMENTS.  The Corporation shall not, on or
after the date of this Agreement, enter into any agreement with respect to
the Common Stock which would prohibit the Corporation from performing the
obligations set forth in this Agreement.  The Corporation has not previously
entered into or become a party to, nor is it bound by any agreement with
respect to, the Common Stock granting any registration rights to any person
which is inconsistent with the rights granted hereunder.

       21.    TIME IS OF THE ESSENCE.  Time is of the essence in the
performance of the parties' obligations under this Agreement.

                                      -12-

<PAGE>

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

                                 "CORPORATION"

                                 LONE STAR TECHNOLOGIES, INC.

                                 By: /s/ RHYS J. BEST
                                    ---------------------------------
                                 Name:   Rhys J. Best
                                 Title:  Chairman of the Board,
                                         Chief Executive Officer and President

                                 Address for Notice:

                                 Lone Star Technologies, Inc.
                                 15560 N. Dallas Parkway, Suite 500
                                 Dallas, Texas 75248
                                 Fax: (972) 770-6411

                                      -13-

<PAGE>

                                 "FINTUBE REPRESENTATIVE"

                                 FINTUBE LIMITED PARTNERSHIP

                                 By: Division Fintube Corporation,
                                     Its General Partner

                                 By: /s/ JERRY E. RYAN
                                    ---------------------------------
                                 Name:   Jerry E. Ryan
                                 Title:  Chairman of the Board

                                 Address for Notice:

                                 Fintube Limited Partnership
                                 3201 E. 65th
                                 Tulsa, Oklahoma 74136
                                 Fax:    (918) 495-1374

                                      -14-

<PAGE>

                                 "YORKTOWN REPRESENTATIVE"

                                 YORKTOWN PARTNERS L.L.C.

                                 By: /s/ PETER A. LEIDEL
                                    ---------------------------------
                                    Its Managing Member

                                 By: /s/ PETER A. LEIDEL
                                    ---------------------------------
                                 Name:  Peter A. Leidel
                                      -------------------------------
                                 Title: /s/ Member
                                       ------------------------------

                                 Address for Notice:

                                 Yorktown Partners L.L.C.
                                 c/o Peter A. Leidel
                                 410 Park Avenue
                                 New York, New York 10022
                                 Fax:

                                      -15-

<PAGE>

                                 "BROWN REPRESENTATIVE"

                                 BROWN UNIVERSITY THIRD CENTURY FUND

                                 By: /s/ JONATHON L. SHEAR
                                    ---------------------------------
                                    Its  Treasurer
                                       ------------------------------

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

                                 Address for Notice:

                                 Brown University Third Century Fund
                                 168 Angell Street, Box C
                                 Providence, Rhode Island  02912
                                 Fax:

                                      -16-

<PAGE>

                                 "WDR REPRESENTATIVE"

                                 WARBURG, DILLON, READ, L.L.C.

                                 By: /s/ STEVE CHRAPPA
                                    ---------------------------------
                                    Its Associate Director

                                 By: /s/ STEVE CHRAPPA
                                    ---------------------------------
                                 Name:   Steve Chrappa
                                      -------------------------------
                                 Title: Associate Director
                                       ------------------------------

                                 Address for Notice:

                                 Warburg, Dillon, Reed, L.L.C.
                                 c/o Joe DeCicco
                                 299 Park Avenue
                                 New York, New York 10171
                                 Fax:

                                      -17-

<PAGE>

                                 "TICONDEROGA REPRESENTATIVE"

                                 TICONDEROGA PARTNERS.

                                 By: /s/ TICONDEROGA CAPITAL, INC.
                                    ---------------------------------
                                 Its Investment Mgr
                                    ---------------------------------

                                 By:/s/ ROBERT HANNON
                                    ---------------------------------
                                 Name: Robert Hannon
                                      -------------------------------
                                 Title: Vice President Finance
                                       ------------------------------

                                 Address for Notice:

                                 Ticonderoga Partners
                                 20 Williams Street, Suite G40
                                 Wellesley, MA 02481
                                 Fax:

                                      -18-

<PAGE>

                                       "STOCKHOLDERS"

                                      /s/ JERRY E. RYAN
                                      ---------------------------------------
                                      Jerry E. Ryan
                                      3201 East 65th Street
                                      Tulsa, Ok 74136

                                      Tracie Ryan Jerd "S" Trust

                                       By:  /s/ TRACIE RYAN JERD
                                          -----------------------------------
                                          Name: Tracie Ryan Jerd
                                          Title:
                                                -----------------------------
                                          11 Mallard Drive
                                          Mt. Laurel, NJ 08054

                                       Andrew C. Ryan "S" Trust

                                       By:  /s/ ANDREW RYAN
                                          -----------------------------------
                                          Name: Andrew Ryan
                                                -----------------------------
                                          Title:
                                                -----------------------------
                                          40 N. Kingshighway, Apt. 13L
                                          St. Louis, MO 63108

                                       Sloane Renee Ryan "S" Trust

                                       By:  /s/ BARBARA N. RYAN
                                          -----------------------------------
                                          Name:  Barbara N. Ryan
                                                -----------------------------
                                          Title: Trustee
                                                -----------------------------
                                          3201 East 65th Street
                                          Tulsa, Oklahoma 74136

                                       /s/ RAYMOND M. BRIGGS
                                       --------------------------------------
                                      Raymond M. Briggs
                                      3211 East 65th Street
                                      Tulsa, Oklahoma 74136

                                       -19-
<PAGE>

                                   /s/ TRAVIS J. BRIGGS
                                   ------------------------------------------
                                   Travis J. Briggs
                                   4676 Southern Ave.
                                   Dallas, TX 75209

                                   /s/ JOHN CONNOR BRIGGS
                                   ------------------------------------------
                                   John Connor Briggs
                                   5526 W. Amhurst
                                   Dallas, TX 75209

                                   /s/ WILLIAM CLINTON BRIGGS
                                   ------------------------------------------
                                   William Clinton Briggs
                                   3211 E. 65th Street
                                   Tulsa, Oklahoma 74136

                                   /s/ JERRY R. NICHOLS
                                   ------------------------------------------
                                   Jerry R. Nichols
                                   1379 East 29th
                                   Tulsa, Oklahoma 74144

                                   /s/ NANCY K. NICHOLS
                                   ------------------------------------------
                                   Nancy Nichols
                                   1389 East 27th
                                   Tulsa, Oklahoma 74114

                                   /s/ ERIN NICHOLS
                                   ------------------------------------------
                                   Erin Nichols
                                   1427 East 34th
                                   Tulsa, Oklahoma 74105

                                   /s/ KRIS NICHOLS,
                                   ------------------------------------------
                                   CUSTODIAN FOR JUSTIN NICHOLS
                                   Kris Nichols, Custodian for Justin Nichols
                                   1379 E. 29th
                                   Tulsa, Oklahoma 74114

                                       -20-
<PAGE>

                                   /s/ LARRY J. BUMP
                                   ------------------------------------------
                                   Larry J. Bump
                                   7538 S. Gary Place
                                   Tulsa, Oklahoma 74136

                                   /s/ TINA L. BUMP
                                   ------------------------------------------
                                   Tina L. Bump
                                   P.O. Box 18884
                                   Golden, CO 80402

                                   /s/ TRICIA L. EICHLER
                                   ------------------------------------------
                                   Tricia L. Eichler
                                   6231 S. Jamaica Court
                                   Englewood, CO 80111

                                   /s/ TERRY L. GILBERT
                                   ------------------------------------------
                                   Terry L. Gilbert
                                   1522 N. Minnesota
                                   Shawnee, OK 74801

                                   /s/ LARRY SIMS
                                   ------------------------------------------
                                   Larry Sims
                                   4500 W. 89th
                                   Tulsa, Oklahoma 74132

                                   /s/ PEGGY PETERS
                                   ------------------------------------------
                                   Peggy Peters
                                   7255 Oak Fairway
                                   Tulsa, Oklahoma 74131

                                   /s/ DAVID CROWELL
                                   ------------------------------------------
                                   David Crowell
                                   2717 W. 67th
                                   Tulsa, Oklahoma 74132

                                       -21-
<PAGE>

                                   /s/ CHRIS WEIERMAN
                                   ------------------------------------------
                                   Chris Weierman
                                   Route 1, Box 143
                                   Pryor, Oklahoma 74361

                                   /s/ HARTMAN MITCHELL
                                   ------------------------------------------
                                   Hartman Mitchell
                                   4824 S. Yorktown Ct.
                                   Tulsa, Oklahoma 74105

                                   /s/ GARY WILLIS
                                   ------------------------------------------
                                   Gary Willis
                                   7528 S. 96th East Avenue
                                   Tulsa, OK 74133

                                   /s/ MARION DEATON
                                   ------------------------------------------
                                   Marion Deaton
                                   1364 E. 43rd Place
                                   Tulsa, Oklahoma 74105

                                   /s/ THOMAS J. BUTCHKO
                                   ------------------------------------------
                                   Thomas J. Butchko
                                   245 E. 28th Street
                                   Tulsa, Oklahoma 74114

                                   /s/ EMMETT D. MANTLE
                                   ------------------------------------------
                                   Emmett D. Mantle
                                   3331 S. 76th W. Ave.
                                   Tulsa, Oklahoma 74107

                                   /s/ ROBERT A. HANSON
                                   ------------------------------------------
                                   Robert A. Hanson
                                   3159 E. Atlanta
                                   Tulsa, Oklahoma 74105

                                       -22-
<PAGE>

                                   /s/ DON R. REID
                                   ------------------------------------------
                                   Don R. Reid
                                   724 W. 97th Court
                                   Jenks, Oklahoma 74037

                                   /s/ MICHEL LABELLE
                                   ------------------------------------------
                                   Michel Labelle
                                   1544 Chemin de L'Etoile
                                   St-Adolphe D'Howard, Quebec
                                   JOT 2B0

                                   Brown University Third Century Fund

                                   By: /s/ JONATHON L. SHEAR
                                       --------------------------------------
                                       Name:  Jonathon L. Shear
                                              -------------------------------
                                       Title: Treasurer
                                              -------------------------------
                                       168 Angell St., Box C
                                       Providence, RI 02912

                                   Yorktown Energy Partners

                                   By: /s/ PETER A. LEIDEL
                                       --------------------------------------
                                       Name:  Peter A. Leidel
                                              -------------------------------
                                       Title: Member
                                              -------------------------------
                                       c/o Peter A. Leidel
                                       Yorktown Partners L.L.C.
                                       410 Park Ave
                                       New York, New York 10022-4407

                                       -23-
<PAGE>

                                   Lexington Partners III, L.P.

                                   By: /s/ WARBURG DIUION READ LLC
                                       --------------------------------------
                                       ITS GENERAL PARTNER
                                       Name:  Steve Chrappa
                                              -------------------------------
                                       Title: Associate Director
                                              -------------------------------
                                       c/o Joe De Cicco
                                       Warburg, Dillon  Read, L.L.C.
                                       299 Park Ave.
                                       New York, New York 10171

                                   Concord Partners, L.P.

                                    By: /s/ ROBERT HANNON
                                       --------------------------------------
                                       Name:  Robert Hannon
                                              -------------------------------
                                       Title: VP of Ticonderoga Capital
                                                 Investment Mgr
                                              -------------------------------
                                       c/o Robert Hannon
                                       Ticonderoga Partners
                                       20 William St.
                                       Suite G40
                                       Wellesley, MA 02481

                                       -24-
<PAGE>

                                   Concord Partners Japan Limited

                                   By: /s/ ROBERT HANNON
                                       --------------------------------------
                                       Name:  Robert Hannon
                                             --------------------------------
                                       Title: VP of Ticonderoga Capital
                                              Investment Mgr
                                             --------------------------------
                                       c/o Robert Hannon
                                       Ticonderoga Partners
                                       20 William St.
                                       Suite G40
                                       Wellesley, MA 02481

                                   /s/ DENNIS H. ADLER
                                   ------------------------------------------
                                   Dennis H. Adler

                                   /s/ H. MICHAEL ASHFORD
                                   ------------------------------------------
                                   H. Michael Ashford
                                   Route 1, Box 177
                                   Maud, TX 75567

                                   /s/ CHARLES A. BALLARD
                                   ------------------------------------------
                                   Charles A. Ballard
                                   Armitage Farm
                                   P.O. Box 196
                                   Solsbury, PA 18963

                                   /s/ JOHN P. BIRKELUND
                                   ------------------------------------------
                                   John P. Birkelund
                                   956 Fifth Avenue, Apt. 14A
                                   New York, New York 10021

                                   /s/ WILLIAM S. BRENIZER
                                   ------------------------------------------
                                   William S. Brenizer
                                   1035 Park Avenue, Apt. 5A
                                   New York, New York 10028

                                       -25-
<PAGE>

                                   /s/ JOHN G. BRIM
                                   ------------------------------------------
                                   John G. Brim
                                   120 East End Avenue
                                   Apt. 5A
                                   New York, New York 10028

                                   /s/ PATRICK S. CIAMPI
                                   ------------------------------------------
                                   Patrick S. Ciampi
                                   149 Woodgate Rd.
                                   Middletown, NY 07748

                                   /s/ DOUGLAS A. DARBY
                                   ------------------------------------------
                                   Douglas A. Darby
                                   P.O. Box 164
                                   Plymouth Montserrat
                                   British West Indies

                                   /s/ SALLY A. DEAN
                                   ------------------------------------------
                                   Sally A. Dean
                                   1724 West Sussex Road, N.E.
                                   Atlanta, Georgia 30306

                                   /s/ FRANCOIS DE SAINTS PHALLE
                                   ------------------------------------------
                                   Francois de Saints Phalle
                                   1107 5th Avenue, Apt. 6N
                                   New York, NY 10128

                                   /s/ CHARLES P. DURKIN
                                   ------------------------------------------
                                   Charles P. Durkin
                                   142 East 71st Street
                                   New York, NY 10021

                                   /s/ PETER M. FLANIGAN
                                   ------------------------------------------
                                   Peter M. Flanigan
                                   Anderson Hill Road
                                   Purchase, NY 10577

                                       -26-
<PAGE>

                                   /s/ GERALD GREENWALD
                                   ------------------------------------------
                                   Gerald Greenwald
                                   c/o United Airlines
                                   P.O. Box 66100
                                   Chicago, IL 60666

                                   /s/ JOHN H. F. HASKELL, JR.
                                   ------------------------------------------
                                   John H. F. Haskell, JR.
                                   120 East End Avenue
                                   Apt. 3A
                                   New York, NY 10028

                                   /s/ FRANKLIN W. HOBBS
                                   ------------------------------------------
                                   Franklin W. Hobbs, IV
                                   151 East 79th Street
                                   New York, NY 10021

                                   /s/ CRAIG A.T. JONES
                                   ------------------------------------------
                                   Craig A. T. Jones
                                   123 Abbott Road
                                   Wellesley, MA 02181-6124

                                   /s/ KURT KALM
                                   ------------------------------------------
                                   Kurt Kalm
                                   11 Palmer Lane
                                   Riverside, CT 06878

                                   /s/ W. HOWARD KEENAN, JR.
                                   ------------------------------------------
                                   W. Howard Keenan, Jr.
                                   1170 Fifth Ave., Apt. 7a
                                   New York, NY 10029

                                   /s/ BRYAN B. LAWRENCE
                                   ------------------------------------------
                                   Bryan B. Lawrence
                                   116 E. 63rd St., Apt. 9D
                                   New York, NY 10021

                                       -27-
<PAGE>

                                   /s/ JOHN H. MULLIN, III
                                   ------------------------------------------
                                   John H. Mullin, III
                                   c/o Ridgeway Farms
                                   RIDGEWAY FARM LANE
                                   Brookneal, VA 23528

                                   /s/ JOHN J. MURABITO
                                   ------------------------------------------
                                   John J. Murabito
                                   9 Westwood Lane
                                   Woodbury, NY 11797

                                   /s/ DAVID W. NIEMIEC
                                   ------------------------------------------
                                   David W. Niemiec
                                   139 East 79th Street
                                   New York, NY 10021

                                   /s/ ROBERT A. PILKINGTON
                                   ------------------------------------------
                                   Robert A. Pilkington
                                   152 Wheatley Road
                                   Glen Head, NY 11545

                                   /s/ THOMAS L. PIPER, III
                                   ------------------------------------------
                                   Thomas L. Piper, III
                                   Windrow Lane
                                   New Canaan, CT 06840

                                   /s/ BRET E. RUSSELL
                                   ------------------------------------------
                                   Bret E. Russell
                                   325 West End Ave. Apt. 8B
                                   New York, NY 10023

                                   /s/ STUART L. SINDELL
                                   ------------------------------------------
                                   Stuart L. Sindell
                                   300 Cascade Road
                                   Stamford, CT 06903

                                       -28-
<PAGE>

                                   /s/ MICHAEL I. SOMERS
                                   ------------------------------------------
                                   Michael I. Somers
                                   900 Park Avenue, Apt. #26A
                                   New York, NY 10021-0231

                                   /s/ DANFORTH W. STAR
                                   ------------------------------------------
                                   Danforth W. Star
                                   12 Bayberry lane
                                   Greenwich, CT 06831

                                   /s/ F. DAVIS TERRY, JR.
                                   ------------------------------------------
                                   F. Davis Terry, Jr.
                                   1035 Fifth Avenue, Apt. 16C
                                   New York, NY 10028

                                   /s/ LORENZO D. WEISMAN
                                   ------------------------------------------
                                   Lorenzo D. Weisman
                                   1107 Fifth Ave.
                                   New York, NY 10128

                                   /s/ EDWARD B. WHITNEY
                                   ------------------------------------------
                                   Edward B. Whitney
                                   307 West 102nd Street
                                   New York, NY 10025

                                   /s/ GEORGE A. WIEGERS
                                   ------------------------------------------
                                   George A. Wiegers
                                   230 Bridge Street
                                   Vail, CO 81657-3614

                                   /s/ RICHARD C. YANCEY
                                   ------------------------------------------
                                   Richard C. Yancey
                                   42 Monroe Place
                                   Brooklyn, NY 11201

                                       -29-
<PAGE>

                                   /s/ ROBERT A. YOUNG
                                   ------------------------------------------
                                   Robert A. Young
                                   52 Indian Rock Road
                                   New Canaan, CT 06840

                                   /s/ H. C. BOWEN SMITH
                                   ------------------------------------------
                                   H.C. Bowen Smith
                                   c/o Warburg, Dillon  Read, L.L.C.
                                   299 Park Ave.
                                   New York, New York 10171

                                   Warburg, Dillon Read, L.L.C.

                                   By: /s/ STEVE CHRAPPA,
                                      ---------------------------------------
                                      Associate Director
                                      ---------------------------------------
                                      Joe De Cicco
                                      299 Park Ave.
                                      New York, New York 10171

                                       -30-

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