Document:

Exhibit No. 4(c)

                          INTERIM SUB-ADVISORY CONTRACT

     Agreement made as of October 10, 2000 ("Contract") between MITCHELL
HUTCHINS ASSET MANAGEMENT INC., a Delaware corporation ("Mitchell Hutchins"),
and MARTIN CURRIE INC., a New York corporation ("Sub-Adviser").

                                    RECITALS

     (1) Mitchell Hutchins has entered into an Interim Investment Management and
Administration Agreement, dated October 10, 2000 ("Management Agreement"), with
PaineWebber Investment Trust ("Trust"), an open-end management investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act"), with respect to the series of the Trust designated as PaineWebber Global
Equity Fund ("Series");

     (2) Mitchell Hutchins wishes to retain the Sub-Adviser to furnish certain
investment advisory and administrative services to Mitchell Hutchins and the
Series; and

     (3) The Sub-Adviser is willing to furnish such services;

     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, Mitchell Hutchins and the Sub-Adviser agree as follows:

     1. APPOINTMENT. Mitchell Hutchins hereby appoints the Sub-Adviser as an
investment sub-adviser with respect to the Series for the period and on the
terms set forth in this Contract. The Sub-Adviser accepts that appointment and
agrees to render the services herein set forth, for the compensation herein
provided.

     2. DUTIES AS SUB-ADVISER.

     (a) Subject to the supervision and direction of the Trust's Board of
Trustees ("Board") and review by Mitchell Hutchins, and any written guidelines
adopted by the Board or Mitchell Hutchins, the Sub-Adviser will provide a
continuous investment program for all or a designated portion of the assets
("Segment") of the Series, including investment research and discretionary
management with respect to all securities and investments and cash equivalents
in the Series or Segment. The Sub-Adviser will determine from time to time what
investments will be purchased, retained or sold by the Series or Segment. The
Sub-Adviser will be responsible for placing purchase and sell orders for
investments and for other related transactions for the Series or Segment. The
Sub-Adviser will be responsible for voting proxies of issuers of securities held
by the Series or Segment. The Sub-Adviser will provide services under this
Contract in accordance with the Series' investment objective, policies and
restrictions as stated in the Trust's currently effective registration statement
under the 1940 Act, and any amendments or supplements thereto ("Registration
Statement").

     (b) The Sub-Adviser agrees that, in placing orders with brokers, it will
obtain the best net result in terms of price and execution; provided that, on
behalf of the Series or Segment, the Sub-Adviser may, in its discretion, use
brokers that provide the Sub-Adviser with research, analysis, advice and similar
services to execute portfolio transactions on behalf of the Series or Segment,
and the Sub-Adviser may pay to those brokers in return for brokerage and
research services a higher

<PAGE>

commission than may be charged by other brokers, subject to the Sub-Adviser's
determining in good faith that such commission is reasonable in terms either of
the particular transaction or of the overall responsibility of the Sub-Adviser
to the Series or Segment and its other clients and that the total commissions
paid by the Series or Segment will be reasonable in relation to the benefits to
the Series or Segment ver the long term. In no instance will portfolio
securities be purchased from or sold to Mitchell Hutchins or the Sub-Adviser, or
any affiliated person thereof, except in accordance with the federal securities
laws and the rules and regulations thereunder. The Sub-Adviser may aggregate
sales and purchase orders with respect to the assets of the Series or Segment
with similar orders being made simultaneously for other accounts advised by the
Sub-Adviser or its affiliates. Whenever the Sub-Adviser simultaneously places
orders to purchase or sell the same security on behalf of the Series or Segment
and one or more other accounts advised by the Sub-Adviser, the orders will be
allocated as to price and amount among all such accounts in a manner believed by
the Sub-Adviser to be equitable over time to each account. Mitchell Hutchins
recognizes that in some cases this procedure may adversely affect the results
obtained for the Series or Segment.

     (c) The Sub-Adviser will maintain all books and records required to be
maintained pursuant to the 1940 Act and the rules and regulations promulgated
thereunder with respect to transactions by the Sub-Adviser on behalf of the
Series or Segment, and will furnish the Board and Mitchell Hutchins with such
periodic and special reports as the Board or Mitchell Hutchins reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records that it maintains for the Series
are the property of the Trust, agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records that it maintains for the Series and
that are required to be maintained by Rule 31a-1 under the 1940 Act, and further
agrees to surrender promptly to the Trust any records that it maintains for the
Series upon request by the Trust.

     (d) At such times as shall be reasonably requested by the Board or Mitchell
Hutchins, the Sub-Adviser will provide the Board and Mitchell Hutchins with
economic and investment analyses and reports as well as quarterly reports
setting forth the performance of the Series or Segment and make available to the
Board and Mitchell Hutchins any economic, statistical and investment services
that the Sub-Adviser normally makes generally available to its institutional or
other customers.

     (e) In accordance with procedures adopted by the Board, as amended from
time to time, the Sub-Adviser is responsible for assisting in the fair valuation
of all portfolio securities in the Series or Segment and will use its reasonable
efforts to arrange for the provision of a price from one or more parties
independent of the Sub-Adviser for each portfolio security for which the
custodian does not obtain prices in the ordinary course of business from an
automated pricing service.

     3. FURTHER DUTIES. In all matters relating to the performance of this
Contract, the Sub-Adviser will seek to act in conformity with the Trust's Trust
Instrument, By-Laws and Registration Statement and with the written instructions
and written directions of the Board and Mitchell Hutchins; and will comply with
the requirements of the 1940 Act and the Investment Advisers Act of 1940, as
amended ("Advisers Act") and the rules under each, Subchapter M of the Internal
Revenue Code of 1986, as amended ("the Code"), as applicable to regulated
investment companies, and all other federal and state laws and regulations
applicable to the Trust and the Series. Mitchell Hutchins agrees to provide to
the Sub-Adviser copies of the Trust's Trust Instrument, By-Laws,

                                       2
<PAGE>

Registration Statement, written instructions and directions of the Board and
Mitchell Hutchins, and any order issued by the Securities and Exchange
Commission or other regulatory authority applicable to the Trust, the Series or
Mitchell Hutchins and any amendments or supplements to any of these materials as
soon as practicable after such materials become available; and further agrees to
identify to the Sub-Adviser in writing any broker-dealers that are affiliated
with Mitchell Hutchins (other than PaineWebber Incorporated and Mitchell
Hutchins itself). The Sub-Adviser's duty, if any, under this Contract to act in
conformity with any document, instruction, direction or guideline produced by
the Trust or Mitchell Hutchins shall not arise until it has been delivered to
the Sub-Adviser; and any changes to any of the foregoing will make due allowance
for the time within which the Sub-Adviser shall have to come into compliance.

     4. EXPENSES. During the term of this Contract, the Sub-Adviser will bear
all expenses incurred by it in connection with its services under this Contract.
The Sub-Adviser shall not be responsible for any expenses incurred by the Trust,
the Series or Mitchell Hutchins.

     5. COMPENSATION.

     (a) For the services provided and the expenses assumed by the Sub-Adviser
pursuant to this Contract, Mitchell Hutchins, not the Series, will pay to the
Sub-Adviser a sub-advisory fee, computed daily and paid monthly, at an annual
rate of 0.35% of the average daily net assets up to and including $150 million,
0.30% of the average daily net assets above $150 million up to and including
$250 million, 0.25% of the average daily net assets above $250 million up to and
including $350 million, and 0.20% of the average daily net assets above $350
million of the Series or Segment (computed in the manner specified in the
Management Agreement), and will provide the Sub-Adviser with a schedule showing
the manner in which the fee was computed. If the Sub-Adviser is managing a
Segment, its fees will be based on the value of assets of the Series within the
Sub-Adviser's Segment. For purposes of computing this fee, (1) the average daily
net assets of the Series or Segment that are allocated to the management of the
Sub-Adviser are added to the average daily net assets of PACE International
Equity Investments (which is also sub-advised by the Sub-Adviser), (2) the fee
is applied to the aggregate daily net assets, and (3) the effective fee rate for
these aggregate daily net assets is applied to the assets of the Series or
Segment and the resulting amount is the amount payable by Mitchell Hutchins to
the Sub-Adviser under this Contract.

     (b) The fee shall be accrued daily and payable monthly to the Sub-Adviser
on or before the last business day of the next succeeding calendar month.

     (c) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be pro-rated according to the proportion that such period bears to the
full month in which such effectiveness or termination occurs.

     (d) For those periods in which Mitchell Hutchins has agreed to waive all or
a portion of its management fee, Mitchell Hutchins may ask the Sub-Adviser to
waive the same proportion of its fees payable hereunder, but the Sub-Adviser is
under no obligation to do so.

                                       3
<PAGE>

     6. LIMITATION OF LIABILITY.

     (a) Neither the Sub-Adviser nor any of its officers, directors, employees
or agents shall be liable for any error of judgment or mistake of law or for any
loss suffered by the Series, the Trust, its shareholders or by Mitchell Hutchins
in connection with the matters to which this Contract relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the
Sub-Adviser's part in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Contract.

     (b) In no event will the Sub-Adviser have any responsibilities for any
other series of the Trust, for any portion of the Series' investments not
managed by the Sub-Adviser or for the acts or omissions of any other adviser or
sub-adviser to the Trust or Series.

     In particular, in the event the Sub-Adviser shall manage only a portion of
the Series' investments, the Sub-Adviser shall have no responsibility for the
Series' being in violation of any applicable law or regulation or investment
policy or restriction or instruction or direction applicable to the Series as a
whole or for the Series' failing to qualify as a regulated investment company
under the Code, if the securities and other holdings of the Segment managed by
the Sub-Adviser are such that (i) such Segment would not be in such violation or
fail to so qualify if such segment were deemed a separate series of the Trust or
a separate "regulated investment company" under the Code, or (ii) subsection (i)
above is inapplicable as a result of or pursuant to authority or permission
contained in written instructions or directions produced by the Trust or
Mitchell Hutchins, including, without limitation, written instructions or
directions that contemplate that the Series as a whole would not be in such
violation or fail to so qualify by virtue of the aggregation of the Segment with
one or more other portions of the Series.

     Nothing in this section shall be deemed a limitation or waiver of any
obligation or duty that may not by law be limited or waived.

     7. REPRESENTATIONS OF SUB-ADVISER. The Sub-Adviser represents, warrants and
agrees as follows:

     (a) The Sub-Adviser (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Contract
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Contract; (iii) has met and
will seek to continue to meet for so long as this Contract remains in effect,
any other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency necessary to
be met in order to perform the services contemplated by this Contract; (iv) has
the authority to enter into and perform the services contemplated by this
Contract; and (v) will promptly notify Mitchell Hutchins of the occurrence of
any event that would disqualify the Sub-Adviser from serving as an investment
adviser of an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.

     (b) The Sub-Adviser has adopted a written code of ethics and appropriate
procedures complying with the requirements of Rule 17j-1 under the 1940 Act and
will provide Mitchell Hutchins and the Board with a copy of such code of ethics,
together with evidence of its adoption. Within fifteen days of the end of the
last calendar quarter of each year that this Contract is in effect,

                                       4
<PAGE>

the president or a vice president or the general counsel of the Sub-Adviser
shall certify to Mitchell Hutchins that the Sub-Adviser has complied with the
requirements of Rule 17j-1 during the previous year and that there has been no
material violation of the Sub-Adviser's code of ethics or, if such a violation
has occurred, that appropriate action was taken in response to such violation.
Upon the written request of Mitchell Hutchins, the Sub-Adviser shall permit
Mitchell Hutchins, its employees or its agents to examine the reports required
to be made by the Sub-Adviser pursuant to Rule 17j-1 and all other records
relevant to the Sub-Adviser's code of ethics.

     (c) The Sub-Adviser has provided Mitchell Hutchins with a copy of its Form
ADV, as most recently filed with the Securities and Exchange Commission ("SEC")
and promptly will furnish a copy of all amendments to Mitchell Hutchins at least
annually.

     (d) The Sub-Adviser will notify Mitchell Hutchins of any change of control
of the Sub-Adviser, including any change of its general partners or 25%
shareholders or 25% limited partners, as applicable, and any changes in the key
personnel who are either the portfolio manager(s) of the Series or senior
management of the Sub-Adviser, in each case prior to, or promptly after, such
change.

     8. REPRESENTATIONS OF MITCHELL HUTCHINS. Mitchell Hutchins represents,
warrants agrees as follows:

     (a) Mitchell Hutchins (i) has the authority to act on behalf of the Series
and the Trust and (ii) has the authority to enter into and to perform the
obligations contemplated by this Contract.

     (b) Mitchell Hutchins has received a copy of the Sub-Adviser's Form ADV, as
most recently filed with the SEC, not less than 48 hours prior to its execution
of this Contract.

     9. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-Adviser
hereunder are not to be deemed exclusive and the Sub-Adviser shall be free to
furnish similar services to others so long as its services under this Contract
are not materially impaired thereby or unless otherwise agreed to by the parties
hereunder in writing. Nothing in this Contract shall limit or restrict the right
of any trustee, director, officer or employee of the Sub-Adviser, who may also
be a Trustee, officer or employee of the Trust, to engage in any other business
or to devote his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a dissimilar
nature.

     10. DURATION AND TERMINATION.

     (a) This Contract shall become effective upon the day and year first
written above, provided that this Contract has been approved for the Series by a
vote of a majority of those Trustees of the Trust who are not parties to this
Contract or interested persons of any such party ("Independent Trustees") cast
at a meeting called for the purpose of voting on such approval and in which the
Trustees may participate by any means of communication that allows all Trustees
participating to hear each other simultaneously during the meeting.

     (b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for a period of 150 days after the day and year first above
written.

                                       5
<PAGE>

     (c) Notwithstanding the foregoing, with respect to the Series, this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Series on ten days' written notice to the Sub-Adviser and may
be terminated by the Sub-Adviser at any time, without the payment of any
penalty, on sixty days' written notice to Mitchell Hutchins. The Contract may
also be terminated, without payment of penalty, by Mitchell Hutchins (i) upon
material breach by the Sub-Adviser of any of the representations and warranties
set forth in Paragraph 7 of this Contract if such breach shall not have been
cured within a 20 day period after notice of such breach; or (ii) immediately
if, in the reasonable judgment of Mitchell Hutchins, the Sub-Adviser becomes
unable to discharge its duties and obligations under this Contract, including
circumstances such as the financial insolvency of the Sub-Adviser or other
circumstances that could adversely affect the Series. The Sub-Adviser may
terminate this Contract at any time, without the payment of any penalty, (i)
upon material breach by Mitchell Hutchins of any of the representations,
warranties and agreements set forth in Paragraph 8 of this Contract, if such
breach shall not have been cured within a 20 day period after notice of such
breach; or (ii) immediately if, in the reasonable judgement of the Sub-Adviser,
Mitchell Hutchins becomes unable to discharge its duties and obligations under
this Contract, including circumstances such as the financial insolvency of
Mitchell Hutchins. This Contract will terminate automatically in the event of
its assignment or upon termination of the Management Agreement, as it relates to
this Series.

     11. AMENDMENT OF THIS CONTRACT. No provision of this Contract may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Contract as to the
Series shall be effective until approved by vote of the Independent Trustees or
a majority of the Series' outstanding voting securities.

     12. GOVERNING LAW. This Contract shall be construed in accordance with the
1940 Act and the laws of the State of New York, without giving effect to the
conflicts of laws principles thereof. To the extent that the applicable laws of
the State of New York conflict with the applicable provisions of the 1940 Act,
the latter shall control.

     13. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "affiliated person,"
"interested person," "assignment," "broker," "investment adviser," "net assets,"
"sale," "sell" and "security" shall have the same meaning as such terms have in
the 1940 Act, subject to such exemption as may be granted by the SEC by any
rule, regulation or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Contract is made less
restrictive by a rule, regulation or order of the SEC, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order. This Contract may be signed in counterpart.

                                       6
<PAGE>

     14. NOTICES. Any notice herein required is to be in writing and is deemed
to have been given to the Sub-Adviser or Mitchell Hutchins upon receipt of the
same at their respective addresses set forth below. All written notices required
or permitted to be given under this Contract will be delivered by personal
service, by postage mail - return receipt requested or by facsimile machine or a
similar means of same day delivery which provides evidence of receipt (with a
confirming copy by mail as set forth herein). All notices provided to Mitchell
Hutchins will be sent to the attention of Dianne E. O'Donnell, Deputy General
Counsel. All notices provided to the Sub-Adviser will be sent to the attention
of James Skinner, Director-Client Services.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.

                                          MITCHELL HUTCHINS ASSET
                                          MANAGEMENT INC.
                                          51 West 52nd Street
Attest:                                   New York, New York  10019-6114

By:      /s/ Keith A. Weller              By:   /s/ Dianne E. O'Donnell
         -------------------                    -----------------------
         Name:  Keith A. Weller                 Name:  Dianne E. O'Donnell
         Title:  First Vice President           Title:  Deputy General Counsel

                                          MARTIN CURRIE INC.
                                          Saltire Court
                                          10 Castle Terrace
Attest:                                   Edinburgh, Scotland EHI 2ES

By:      /s/ J.M.C. Livingston            By:   /s/ James Skinner
         ---------------------                  -----------------
         Name: J.M.C. Livingston                Name: C.J.M. Skinner
         Title:   General Counsel               Title:   Director -
                                                Client Services

                                       7EXHIBIT 4.9

                               AT COMM CORPORATION

                  STOCK PURCHASE AND INVESTOR RIGHTS AGREEMENT

         This Stock Purchase and Investor Rights Agreement (this "Agreement") is
made  and  entered  into  as of  December  21,  2000,  by and  between  At  Comm
Corporation,  a Delaware  corporation (the  "Company"),  and each of the persons
listed  on  Exhibit  A  hereto,  each  of  which  is  herein  referred  to as an
"Investor."

                                    RECITALS

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

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

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

         1. AGREEMENT TO PURCHASE AND SELL STOCK.

                  (a) Authorization. As of the first Closing (as defined below),
the Company's Board of Directors (the "Board") will have authorized the issuance
and sale,  pursuant  to the terms and  conditions  of this  Agreement,  of up to
1,082,000  shares of Series C Preferred  Stock, in one or more closings,  having
the  rights,   preferences,   privileges  and  restrictions  set  forth  in  the
Certificate of Designations,  Preferences and Other Rights of Series C Preferred
Stock  in  the  form  attached   hereto  as  Exhibit  B  (the   "Certificate  of
Designations")  and up to 1,082,000  shares of Common  Stock for  issuance  upon
conversion of the Series C Preferred Stock.

                  (b) Agreement to Purchase and Sell Securities.  Subject to the
terms and conditions hereof, the Company hereby agrees to issue and sell to each
Investor and each Investor hereby agrees to acquire from the Company, the number
of shares of Series C Preferred Stock specified opposite each Investor's name on
Exhibit A hereto (collectively,  the "Purchased Shares") at a price per share in
cash equal to the Per Share Purchase Price (as defined below),  for an aggregate
cash  consideration  equal to such number of shares of Series C Preferred Stock,
multiplied by the Per Share Purchase Price. As used in this Agreement,  the "Per
Share  Purchase  Price" shall be equal to fifteen  dollars  ($15.00).  Exhibit A
shall be revised  with  respect to each  Closing to reflect the  identity of the
Investors  and the number of shares  purchased by each Investor at each Closing.
Each  Investor  participating  in a Closing  under  this  agreement  shall be an
"Investor"  within  the  meaning of this  Agreement,  and the shares of Series C
Preferred Stock  purchased by such Investors shall be "Purchased  Shares" within
the meaning of this Agreement.

                                      -1-

<PAGE>

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

         2. CLOSING.

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

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

         3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

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

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

                  (b) Capitalization. The capitalization of the Company, without
giving effect to the transactions contemplated by this Agreement, is as follows.
The  authorized  stock of the Company  consists of  50,000,000  shares of Common
Stock and 10,000,000  shares of Preferred  Stock, of which 1,907,989 shares have
been designated Series A Preferred Stock,  1,020,000 shares have been designated
Series B Preferred Stock and 1,082,000 shares will have been designated Series C
Preferred  Stock.  As of September 30, 2000,  there were issued and  outstanding
5,417,549 shares of Common Stock, no shares of Series A Preferred Stock, 816,500
shares of Series B Preferred  Stock and no shares of Series C  Preferred  Stock.
All such shares of Common Stock and Preferred  Stock have been duly  authorized,
and all such issued and  outstanding  shares of Common Stock and Preferred Stock
have been  validly  issued,  are fully paid and  nonassessable  and are free and
clear of

                                      -2-

<PAGE>

all liens, claims and encumbrances, other than any liens, claims or encumbrances
created by or imposed upon the holders  thereof.  As of September 30, 2000,  the
Company has also  reserved  1,500,000  shares of Common Stock for issuance  upon
exercise of options  granted to officers,  directors,  employees or  independent
contractors or affiliates of the Company under the Company's Restated 1984 Stock
Option Plan and the Company's  1994 Stock Plan. As of September 30, 2000, of the
1,500,000 shares of Common Stock reserved for issuance upon exercise of options,
1,075,804 shares remained subject to outstanding options with a weighted average
exercise  price of  approximately  $14.61 per share,  and  332,172  shares  were
reserved for future  grant.  All shares of Common  Stock  subject to issuance as
aforesaid,   upon  issuance  on  the  terms  and  conditions  specified  in  the
instruments  pursuant  to which  they  are  issuable,  will be duly  authorized,
validly  issued,  fully  paid  and  nonassessable.  There  are no  other  equity
securities,  options,  warrants, calls, rights, commitments or agreements of any
character to which the Company is a party or by which it is bound obligating the
Company to issue,  deliver,  sell,  repurchase or redeem, or cause to be issued,
delivered, sold, repurchased or redeemed, any shares of the capital stock of the
Company or obligating the Company to grant, extend or enter into any such equity
security,  option,  warrant, call, right,  commitment or agreement.  The Company
does not have any  subsidiaries,  nor does the Company  own any  capital  stock,
assets  comprising  the  business  of,  obligations  of, or any  other  interest
(including,  without limitation,  any equity or partnership interest) in, or any
outstanding  loan  or  advance  to or  from,  any  person  or  entity.

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

                  (d) Valid Issuance of Stock.

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

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

                                      -3-

<PAGE>

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

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

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

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

                                      -4-

<PAGE>

                  (i) SEC Documents.

                           (i)  Reports.  The  Company  has  furnished  to  each
Investor  prior to the date hereof  copies of its Annual  Report on Form 10-K SB
for the fiscal year ended December 31, 1999 ("Form 10-K"), its Quarterly Reports
on Form 10-Q SB for the fiscal  quarters  ended March 31, June 30, and September
30, 2000 (the "Form 10-Q's"), and all other registration statements, reports and
proxy statements filed by the Company with the SEC on or after December 31, 1999
(the Form 10-K, the Form 10-Q's and such  registration  statements,  reports and
proxy  statements are collectively  referred to herein as the "SEC  Documents").
Each of the SEC Documents,  as of the respective  date thereof (or if amended or
superseded by a filing prior to the closing date of this Agreement,  then on the
date of such filing), did not, and each of the registration statements,  reports
and proxy statements filed by the Company with the SEC after the date hereof and
prior  to the  Closing  will  not,  as of the date  thereof  (or if  amended  or
superseded by a filing prior to the date of this Agreement,  then on the date of
such filing), contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements  made therein,  in light
of the circumstances under which they were made, not misleading.  The Company is
not a party to any material  contract,  agreement or other  arrangement that was
required to have been filed as an Exhibit to the SEC  Documents  that was not so
filed.

                           (ii) Financial  Statements.  The Company has provided
each  Investor  with copies of its audited  financial  statements  (the "Audited
Financial  Statements")  for the fiscal year ended  December 31,  1999,  and its
unaudited  financial  statements for the nine-month  period ended  September 30,
2000 (the "Balance  Sheet Date").  Since the Balance Sheet Date, the Company has
duly  filed  with  the  SEC  all  registration  statements,  reports  and  proxy
statements required to be filed by it under the Securities Exchange Act of 1934,
as amended  (the  "Exchange  Act"),  and the  Securities  Act.  The  audited and
unaudited  consolidated  financial statements of the Company included in the SEC
Documents  filed prior to the date hereof fairly  present,  in  conformity  with
generally accepted  accounting  principles  ("GAAP") (except, in the case of the
Form 10-Q's, as may otherwise be permitted by Form 10-Q) applied on a consistent
basis (except as otherwise may be stated in the notes thereto), the consolidated
financial  position of the Company and its  consolidated  subsidiaries as at the
dates thereof and the  consolidated  results of their  operations and cash flows
for the periods then ended (subject to normal year-end audit  adjustments in the
case of unaudited interim financial statements).

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

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

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

                                      -5-

<PAGE>

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

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

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

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

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

                  (l) Intellectual Property.

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

                           (ii) Licenses;  Other Agreements.  The Company is not
currently the licensee of any material portion of the  Intellectual  Property of
the Company.  There are not  outstanding  any licenses or agreements of any kind
relating  to  any  Intellectual  Property  owned  by  the  Company,  except  for
agreements  with customers of the Company entered into in the ordinary course of
the Company's business and other licenses and agreements that, collectively, are
not  material.  The  Company  is not  obligated  to pay any  royalties  or other
payments to third  parties with respect to the  marketing,  sale,  distribution,
manufacture,  license or use of any Intellectual Property, except as the Company
may be so obligated in the ordinary course of its business,  as disclosed in the
Company's SEC Documents (as defined below) or where the aggregate amount of such
payments could not reasonably be expected to be material.

                                      -6-

<PAGE>

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

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

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

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

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

                                      -7-

<PAGE>

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

                  (q)  Finder's  Fee.  The Company  shall issue to Greg Wilbur a
Warrant for 25,000  shares of Common  Stock,  at an  exercise  price of the Fair
Market  Value (as defined  below) of the Common Stock on the date of issuance of
the  Warrant,  in  consideration  for a  finder's  fee in  connection  with this
transaction.  For the  purposes of this  paragraph,  Fair Market  Value shall be
deemed to be the average of the closing high bid and low asked prices  quoted on
the principal securities on which the Common Stock is listed for trading.

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

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

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

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

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

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

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

                                      -8-

<PAGE>

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

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

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

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

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

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

                                      -9-

<PAGE>

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

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

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

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

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

         In  addition,  the  Investor  agrees  that the  Company  may place stop
transfer orders with its transfer agents with respect to such certificates.  The
appropriate  portion of the legend and the stop transfer  orders will be removed
promptly  upon  delivery  to  the  Company  of  such  satisfactory  evidence  as
reasonably  may be required  by the Company  that such legend or stop orders are
not required to ensure compliance with the Securities Act.

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

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

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

                           (i)  Representations and Warranties True. Each of the
representations  and  warranties  of the Company  contained in Section 3 will be
true and  correct in all  material  respects on and as of the date hereof and on
and as of the date of the Closing,  except as set forth in the

                                      -10-

<PAGE>

Disclosure  Letter or the SEC  Documents,  with the same  effect as though  such
representations and warranties had been made as of the Closing.

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

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

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

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

                           (vi)  Board  Resolutions.  A copy,  certified  by the
Secretary of the Company,  of the  resolutions  of the Board of Directors of the
Company  providing  for the approval of this  Agreement  and the issuance of the
Purchased Shares and the other matters contemplated hereby.

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

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

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

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

                                      -11-

<PAGE>

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

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

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

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

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

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

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

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

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

        7. COVENANTS OF THE PARTIES.

                  (a) Information Rights.

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

                                    (1) Annual Reports. Furnish to each Investor
promptly  following  the  filing  of  such  report  with  the  SEC a copy of the
Company's  Annual  Report  on Form 10-K SB for each  fiscal  year,  which  shall
include  a  consolidated  balance  sheet as of the end of such  fiscal  year,  a
consolidated  statement of income and a consolidated  statement of cash flows of
the Company and its  subsidiaries  for such year,  setting forth in each case in
comparative  form the figures  from the

                                      -12-

<PAGE>

Company's  previous  fiscal year,  all  prepared in  accordance  with  generally
accepted   accounting   principles  and  practices  and  audited  by  nationally
recognized  independent  certified public accountants.  In the event the Company
shall no longer be required to file Annual  Reports on Form 10-K SB, the Company
shall, within ninety (90) days following the end of each respective fiscal year,
deliver to each Investor a copy of such balance sheets, statements of income and
statements of cash flows, or such form that replaces Form 10-K SB.

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

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

                  (b) Registration Rights.

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

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

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

                                      -13-

<PAGE>

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

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

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

                           (ii) Demand Registration.

                                    (1) Request by  Holders.  If (i) the Company
shall at any time after the one  hundred  and  twentieth  (120th)  day after the
Closing  receive a written  request  from the Holders of at least fifty  percent
(50%) of the Series C Preferred issued as of the Closing,  that the Company file
a  registration   statement  under  the  Securities  Act   (including,   without
limitation,  a "shelf"  registration  statement,  if requested by such  Holders,
during any period of time that Rule 144 is not available as an exemption for the
sale in a single 90-day  period of all of the  Registrable  Securities  that any
such  Holder  desires to sell,  in which case the  Company  would  maintain  the
effectiveness  of such "shelf"  registration  statement until the earlier of the
first  anniversary  of the  effectiveness  thereof or the date on which all such
Registrable  Securities  could be sold under Rule 144 in a single 90-day period)
covering the registration of Registrable Securities, and (ii) the expected gross
proceeds of the sale of Registrable Securities under such registration statement
would  equal or exceed  $2,000,000,  then the  Company  shall,  within  ten (10)
business  days of the receipt of such written  request,  give written  notice of
such request ("Request Notice") to all Holders, and use commercially  reasonable
efforts to effect, as soon as practicable, the registration under the Securities
Act of all  Registrable  Securities  that Holders  request to be registered  and
included  in such  registration  by written  notice  given  such  Holders to the
Company  within  twenty (20) days after receipt of the Request  Notice,  subject
only to the  limitations  of this Section 7(b);  provided that the Company shall
not be obligated to effect any such  registration if the Company has, within the
six (6) month period  preceding  the date of such  request,  already  effected a
registration under the Securities Act pursuant to Section 7(b)(iii),  other than
a  registration  from which the  Registrable  Securities  of  Holders  have been
excluded with respect to all or any portion of the  Registrable  Securities  the
Holders requested be included in such registration. If requested by such Holders
upon the advice of the underwriter,  the Company shall register such Registrable
Securities on Form S-1 or any successor registration form.

                                    (2) Underwriting.  If the Holders initiating
the  registration  request under this Section  7(b)(ii)  ("Initiating  Holders")
intend to  distribute  the  Registrable  Securities  covered by their request by
means of an  underwriting,  then they shall so advise  the  Company as a

                                      -14-

<PAGE>

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

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

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

                                    (5)  Expenses.   All  expenses  incurred  in
connection with any registration  pursuant to this Section  7(b)(ii),  including
without  limitation  all  federal  and  "blue  sky"  registration,   filing  and
qualification fees, printer's and accounting fees, and fees and disbursements of
counsel for the Company (but excluding  underwriters'  discounts and commissions
relating to shares sold by the  Holders),  shall be borne by the  Company.  Each
Holder  participating in a registration  pursuant to this Section 7(b)(ii) shall
bear such Holder's proportionate share (based on the total number of shares sold
in  such  registration  other  than  for  the  account  of the  Company)  of all
discounts,  commissions or other amounts  payable to  underwriters or brokers in
connection with such offering by the Holders. Notwithstanding the foregoing, the
Company  shall  not be  required  to pay for any  expenses  of any  registration
proceeding begun pursuant to this Section  7(b)(ii) if the registration  request
is subsequently withdrawn at the request of the Holders of a majority of the

                                      -15-

<PAGE>

Registrable  Securities  to be  registered,  unless the Holders of such majority
agree  that such  registration  constitutes  the use by the  Holders  of one (1)
demand  registration  pursuant  to this  Section  7(b)(ii)  (in which  case such
registration  shall  also  constitute  the  use by all  Holders  of  Registrable
Securities of one (l) such demand registration); provided further, however, that
if at the time of such  withdrawal,  the  Holders  have  learned  of a  Material
Adverse  Effect not known to the  Holders at the time of their  request for such
registration and have withdrawn their request for registration after learning of
such material adverse change,  then the Holders shall not be required to pay any
of such expenses and such registration  shall not constitute the use of a demand
registration pursuant to this Section 7(b)(ii).

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

                                    (1)   Underwriting.    If   a   registration
statement  under which the Company gives notice under this Section  7(b)(iii) is
for an  underwritten  offering,  then the Company shall so advise the Holders of
Registrable  Securities.   In  such  event,  the  right  of  any  such  Holder's
Registrable  Securities to be included in such a registration  pursuant shall be
conditioned  upon  such  Holder's  participation  in such  underwriting  and the
inclusion of such Holder's  Registrable  Securities in the  underwriting  to the
extent provided herein.  All Holders  proposing to distribute their  Registrable
Securities through such underwriting shall enter into an underwriting  agreement
in customary  form with the managing  underwriter or  underwriters  selected for
such underwriting  (including a market stand-off  agreement of up to 180 days if
required  by  such  underwriters);  provided,  however,  that  it  shall  not be
considered  customary  to require any of the Holders to provide  representations
and warranties  regarding the Company or indemnification of the underwriters for
material  misstatements or omissions in the registration statement or prospectus
for such offering. Notwithstanding any other provision of this Agreement, if the
managing underwriter determine(s) in good faith that marketing factors require a
limitation  of the  number  of  shares  to be  underwritten,  then the  managing
underwriter(s)  may exclude shares from the registration  and the  underwriting;
provided;  however,  that the securities to be included in the  registration and
the  underwriting  shall  be  allocated,  (1)  first to the  Company  (provided,
however,  that a minimum of twenty  percent  (20%) of the number of  Registrable
Securities that each holder of ten percent (10%) or more of the then outstanding
Common Stock  (where any  Registrable  Securities  that are not shares of Common
Stock

                                       16

<PAGE>

but are exercisable or exchangeable  for, or convertible  into, shares of Common
Stock,  shall be deemed to have been so  exercised,  exchanged or converted  for
such purpose) must also in any event be included), (2) second, to the extent the
managing  underwriter  determines  additional  securities  can be included after
compliance  with  Clause  (1),  to each of the  Holders  and  other  holders  of
registration  rights on a parity with the Holders requesting  inclusion of their
Registrable  Securities in such registration statement on a pro rata basis based
on the total number of Registrable  Securities and other securities  entitled to
registration  then held by each such Holder or other holder,  and (3) third,  to
the extent the managing  underwriter  determines  additional  securities  can be
included  after  compliance  with  Clauses  (1) and  (2),  any  shares  or other
securities  held by any person who is an  employee,  officer or  director of the
Company (or any subsidiary of the Company) or any other person.  Any Registrable
Securities  excluded or withdrawn from such  underwriting  shall be excluded and
withdrawn  from the  registration.  For any Holder  that is a  partnership,  the
Holder and the partners and retired partners of such Holder,  or the estates and
family members of any such partners and retired  partners and any trusts for the
benefit  of  any of  the  foregoing  persons,  and  for  any  Holder  that  is a
corporation, the Holder and all corporations that are affiliates of such Holder,
shall be deemed to be a single "Holder," and any pro rata reduction with respect
to such  "Holder"  shall be based upon the aggregate  amount of shares  carrying
registration  rights  owned by all  entities  and  individuals  included in such
"Holder," as defined in this sentence.

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

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

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

                                      -17-

<PAGE>

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

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

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

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

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

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

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

                                      -18-

<PAGE>

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

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

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

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

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

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

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

                                      -19-

<PAGE>

majority in interest of the Holders  requesting  registration,  addressed to the
underwriters,  if any, and to the Holders requesting registration of Registrable
Securities  and (ii) in the event that such  securities  are being sold  through
underwriters,  a "comfort"  letter dated as of such date,  from the  independent
certified  public  accountants  of the  Company,  in form  and  substance  as is
customarily given by independent certified public accountants to underwriters in
an  underwritten  public  offering and reasonably  satisfactory to a majority in
interest of the Holders requesting  registration,  addressed to the underwriters
and to the Holders  requesting  registration  of  Registrable  Securities.  (vi)
Furnish Information. It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Sections 7(b)(ii), (iii) or

                           (iv) that the selling  Holders  shall  furnish to the
Company such information regarding themselves,  the Registrable  Securities held
by them, and the intended  method of disposition of such  securities as shall be
required to timely effect the registration of their Registrable Securities.

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

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

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

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

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

         and the Company  will  reimburse  each such Holder,  partner,  officer,
shareholder,  employee,  representative,  director,  underwriter  or controlling
person for any legal or other expenses reasonably incurred by them, as incurred,
in connection  with  investigating  or defending any such loss,  claim,  damage,
liability or action;  provided,  however, that the indemnity agreement contained
in this  subsection  shall not apply to amounts paid in  settlement  of any such
loss, claim, damage,  liability or action if such settlement is effected without
the consent of the Company (which consent shall not be

                                      -20-

<PAGE>

unreasonably withheld), nor shall the Company be liable in any such case for any
such loss, claim,  damage,  liability or action to the extent that it arises out
of or is based upon a Violation  that occurs in reliance  upon and in conformity
with written  information  furnished  expressly for use in connection  with such
registration  by  such  Holder,   partner,   officer,   shareholder,   employee,
representative, director, underwriter or controlling person of such Holder.

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

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

                                      -21-

<PAGE>

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

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

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

                           (viii) Termination of the Company's Obligations.  The
Company shall have no obligations  pursuant to this Section 7(b) with respect to
any  Registrable  Securities  proposed to be sold by a Holder in a  registration
pursuant to Section  7(b)(ii),  (iii) or (iv) more than four (4) years

                                      -22-

<PAGE>

after the date of this Agreement,  or, if earlier, the date on which each Holder
receives a written opinion of counsel to the Company,  reasonably  acceptable to
counsel for the Holder, all such Registrable Securities proposed to be sold by a
Holder may then be sold under Rule 144 in one transaction  without exceeding the
volume limitations thereunder.

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

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

                                      -23-

<PAGE>

such assignee  shall receive such assigned  rights  subject to all the terms and
conditions of this Agreement.  Notwithstanding  anything in the foregoing to the
contrary, this Agreement may not be assigned by any Investor in whole or in part
to any Competitor of the Company. For purposes of this Section 8, a "Competitor"
of the Company shall mean any company,  one of whose principal lines of business
is the development and/or marketing of any product similar to the Company's Town
Square  product  line or any subset  thereof,  and/or call  accounting,  traffic
engineering,  facilities  and alarm  management,  PBX  security,  voicemail/auto
attendant or answer  detection  software  and  hardware  systems that operate on
personal computers, local area networks and stand-alone proprietary hardware and
that are used primarily in the commercial and hospitality markets.

         9. MISCELLANEOUS.

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

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

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

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

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

                  (f) No Finder's  Fees.  Each Investor will  indemnify and hold
harmless the Company from any liability for any  commission or  compensation  in
the nature of a finders' or broker's  fee for which such  Investor or any of its
officers, partners, employees or consultants, or representatives is responsible.
The Company will  indemnify  and hold  harmless each Investor from any liability
for any commission or  compensation  in the nature of a finder's or broker's fee
for which the  Company  or any of its  officers,  employees  or  consultants  or
representatives is responsible.

                                      -24-

<PAGE>

                  (g) Amendments and Waivers.  This Agreement may be amended and
the observance of any term of this Agreement may be waived (either  generally or
in a particular instance and either  retroactively or prospectively),  only with
the  written  consent  of the  Company  and  the  holders  of  Purchased  Shares
representing  at least  two-thirds  of the total  aggregate  number of Purchased
Shares then  outstanding  (excluding any of such shares that have been sold in a
transaction  in which rights under  Section 7(b) are not assigned in  accordance
with  this  Agreement  or  sold  to  the  public  pursuant  to SEC  Rule  144 or
otherwise).  Any amendment or waiver  effected in  accordance  with this Section
9(g) will be  binding  upon each  Investor,  the  Company  and their  respective
successors and assigns.

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

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

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

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

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

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

                  (n) Cooperation in HSR Act Filings.

                           (i) In the  event of a  conversion  of the  Purchased
Shares (or any other action by an Investor with respect to any Securities of the
Company held by such Investor) that would require a filing by the Investor under
the  Hart-Scott-Rodino  Antitrust  Improvements Act of

                                      -25-

<PAGE>

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

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

              [The remainder of this page is intentionally blank.]

                                      -26-

<PAGE>

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

AT COMM CORPORATION                          RENNES FOUNDATION

By:                                          By:  _____________________________
    -------------------------------------

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

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

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

Address: 577 Airport Boulevard, Suite 700    Address:  Rennes Foundation
Burlingame, CA 94010                                   Auelestrasse 38
                                                       FL - 9490 Vaduz
Telephone No:  (650) 375-8188                          Principality of
                                                       Liechtenstein

Facsimile No:   (650) 347-3988               Telephone No:  011 41-1 217 47 47

                                             Facsimile No:  011 41-1 217 47 00

                                             FLANDERS LANGUAGE  VALLEY FUND CVA,
                                             (Incorporated  under  the  laws  of
                                             Belgium)

                                             By:  _____________________________

                                             Name:

                                             Title:

                                             Date Signed:  _____________________

                                             Address: Flanders  Language  Valley
                                                      63 8900 Ieper
                                                      BELGIUM

                                             EDMUND   SHEA  &  MARY   SHEA  REAL
                                             PROPERTY TRUST TR UA 10/3/85

                                             By:  _____________________________

                                             Name:

                                             Title:

                                             Date Signed:  _____________________

                                             Address: 655 Brea Canyon Road
                                                      P.O. Box 489
                                                      Walnut, CA  91788-0489

Other signatures intentionally omitted.

              [Signature Page to Series C Stock Purchase Agreement]

                                      -27-

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