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                            STOCK PURCHASE AGREEMENT

                                  by and among

                Factory Automation & Computer Technologies, Inc.

                         Warburg, Pincus Investors, L.P.

                                       and

                                Craig Skevington

                            ------------------------

                                   Dated as of

                                  May 10, 1994

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                            STOCK PURCHASE AGREEMENT

           This Agreement is made and entered into as of this 10th day of May,
1994, by and among Factory Automation & Computer Technologies, Inc., a New York
corporation (the "Company"), Warburg, Pincus Investors, L.P., a Delaware limited
partnership ("Warburg"), and Craig Skevington ("Skevington").

           In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereby agree as follows:

SECTION 1. AUTHORIZATION OF CAPITAL STOCK

           (a)        The Company's Board of Directors has authorized the filing
of a Certificate of Amendment to the Certificate of Incorporation (the "Amended
Certificate") in the form of Exhibit A annexed hereto, authorizing 5,000,000
shares of Common Stock, par value $.01 per share (the "Voting Common Stock"),
and 3,000,000 shares of Class A Common Stock, par value $.01 per share (the
"Nonvoting Common Stock"), and creating two new series of preferred stock
consisting of 540,016 shares of Series B Preferred Stock, par value $1.00 per
share (the "Series B Preferred Stock"), and 2,376,651 shares of Series C
Preferred Stock, par value $1.00 per share (the "Series C Preferred Stock"). The
terms, limitations and relative rights and preferences of the Voting Common
Stock, the Nonvoting Common Stock, the Series B Preferred Stock and Series C
Preferred Stock are set forth in the Amended Certificate.

SECTION 2. PURCHASE AND SALE OF STOCK

           2.1        Series B Preferred Stock; Series C Preferred Stock

           Subject to the terms and conditions set forth in this Agreement and
in reliance upon the representations set forth below, on the Closing Date (as
defined below) the Company shall sell to Warburg, and Warburg shall purchase
from the Company at a purchase price equal to $2.40 per share, 540,016 shares of
Series B Preferred Stock and 2,376,651 shares of Series C Preferred Stock for an
aggregate purchase price of $7,000,000. Such sale and purchase shall be effected
on the Closing Date by the Company executing and delivering to Warburg, duly
registered in Warburg's name, duly executed stock certificates evidencing the
Series B Preferred Stock and the Series C Preferred Stock to be purchased
hereunder, against delivery by Warburg to the Company of (a) that certain
$150,000 promissory note made by the Company in favor of Warburg, which note
shall be cancelled and deemed paid in full, and (b) $6,849,167 in cash by wire
transfer or the delivery of a check in such amount payable to the order of the
Company.

           2.2        Use of Proceeds from Investment.

           (a)        The Company shall use the proceeds from Warburg's
investment as follows:

                      (i)        $1,966,570 shall be used to purchase 829,833
           shares of the Company's Convertible Class A Preferred Stock, par
           value $1.00 per share (the "Series A Preferred Stock"), and warrants
           (the "Warrants") to purchase 312, 461 shares of Series A Preferred
           Stock and 4,167 shares of Voting Common Stock, held by Aspen Venture

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           Partners L.P. pursuant to the terms of the Aspen Securities Purchase
           Agreement in the form of Exhibit B annexed hereto;

                      (ii)       $524,304 shall be used to purchase 291,280
           shares of Voting Common Stock held by Gabor Fulup ("Fulup");

                      (iii)      $348,750 shall be used to purchase options to
           purchase 225,000 shares of Voting Common Stock held by Dennis
           Gillespie ("Gillespie");

                      (iv)       $34,200 shall be used to purchase 19,000 shares
           of Voting Common Stock held by Elizabeth Clemens ("Clemens");

                      (v)        $34,200 shall be used to purchase 19,000 shares
           of Voting Common Stock held by Spencer Borden ("Borden"); and

                      (vi)       $4,091,976 shall be used by the Company as
           working capital.

           2.3        Closing.

           The closing of the sale and purchase referred to in Section 2.1 (the
"Closing") shall take place at 10:00 A.M., New York City time, on May 11, 1994,
or such other date as Warburg and the Company may mutually agree in writing (the
"Closing Date"), at the offices of Willkie Farr & Gallagher, 153 East 53rd
Street, New York, New York, or such other location as Warburg and the Company
shall mutually select.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

           The Company represents and warrants to Warburg that:

           3.1        Organization.

           (a)        The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York. Annexed
hereto as Exhibits C and D, respectively, are true and complete copies of the
Certificate of Incorporation (the "Certificate of Incorporation") and By-Laws
(the "By-Laws") of the Company, each as amended through the date hereof.

           (b)        The Company has all requisite corporate power and
authority and has all necessary governmental approvals, licenses, permits and
authorizations to own its properties and to carry on its business as now
conducted, except where the failure to have any such approval, license, permit
or authorization could not reasonably be expected to have a material adverse
effect on the business, financial position or prospects of the Company.

           3.2        Subsidiaries.

           The Company does not own, directly or indirectly, any capital stock
or other equity securities of any corporation nor does it have any direct or
indirect ownership interest in any business. The Company is not a participant in
any joint venture or partnership.

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           3.3        Capital Stock.

           (a)        On the date hereof, the authorized capital stock of the
Company consists of 3,500,000 shares of Voting Common Stock and 2,500,000 shares
of Series A Preferred Stock, of which 869,396 shares of Voting Common Stock and
829,833 shares of Series A Preferred Stock are outstanding. On the Closing Date,
after giving effect to the transactions contemplated hereby (including the
transactions contemplated by the Aspen Securities Purchase Agreement and the
agreements to repurchase Company Securities held by Fulup, Gillespie, Clemens
and Borden (collectively, the "Securities Purchase Agreements")) the authorized
capital stock of the Company will consist of 5,000,000 shares of Voting Common
Stock, 3,000,000 shares of Nonvoting Common Stock, 540,016 shares of Series B
Preferred Stock and 2,376,651 shares of Series C Preferred Stock, of which
540,116 shares of Voting Common Stock, 540,016 shares of Series B Preferred
Stock and 2,376,651 shares of Series C Preferred Stock will be outstanding.

           (b)        Under each of the Company's Incentive Stock Option Plan
and Nonqualified Stock Option Plan, each as amended through the date hereof
(collectively, the "Stock Option Plans") there are 650,000 shares of Voting
Common Stock reserved for issuance upon exercise of stock options granted
thereunder. As of the date hereof and prior to the transactions contemplated
herein, there are incentive stock options to purchase an aggregate of 561,150
shares of Voting Common Stock outstanding and nonqualified stock options to
purchase an aggregate of 352,500 shares of Voting Common Stock outstanding. The
holders of such options and the number of options held are set forth on Schedule
3.3 hereto.

           (c)        Schedule 3.3 sets forth a complete list of the holders of
the Company's Voting Common Stock, Series A Preferred Stock and Warrants and the
number of shares beneficially owned by such holders as of the date hereof and
prior to the transactions contemplated herein.

           3.4        Authorization.

           (a)        The Board of Directors of the Company has authorized the
execution, delivery and performance of this Agreement, the Shareholders'
Agreement (as defined herein), the Securities Purchase Agreements, the RPI
Preemptive Rights Termination Agreement (as defined herein) and each of the
transactions contemplated hereby and thereby including, without limitation,
authorization of the execution and filing of the Amended Certificate,
authorization of the issuance and delivery of the shares of Series B Preferred
Stock and Series C Preferred Stock in accordance with this Agreement and the
authorization of the amendment and restatement of the Company's by-laws (the
"Amended and Restated By-Laws") in the form of Exhibit E annexed hereto. Except
for the action by the Board of Directors described in the preceding sentence and
the shareholder action contemplated by Section 5.4, no other corporate action is
necessary to authorize the performance by the Company of its obligations
hereunder or under the Shareholders' Agreement or the Aspen Securities Purchase
Agreement.

           (b)        This Agreement, the Shareholders' Agreement, the
Securities Purchase Agreements and the RPI Preemptive Rights Termination
Agreement each constitute the valid and binding obligation of the Company,
enforceable against the Company in accordance with their respective terms.

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           3.5        Valid Issuance.

           (a)        All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth on Schedule 3.3 hereto or as contemplated by
this Agreement, the Amended Certificate and the Shareholders' Agreement and
after giving effect to the transactions contemplated by the Securities Purchase
Agreements, there are no shares of capital stock issuable upon conversion of any
security of the Company nor are there any rights, options or warrants
outstanding or other agreements to acquire shares of capital stock nor is the
Company contractually obligated to purchase, redeem or otherwise acquire any of
its outstanding shares of capital stock. Except as contemplated herein and in
the Shareholders' Agreement and after giving effect to the RPI Preemptive Rights
Termination Agreement, no shareholder of the Company is entitled to any
preemptive rights, rights of first refusal, redemption rights or similar rights.

           (b)        Upon issuance, sale and delivery as contemplated by this
Agreement, the shares of Series B Preferred Stock and Series C Preferred Stock
to be sold to Warburg under this Agreement will be duly authorized, validly
issued, fully paid and nonassessable shares of the Company, and free of
preemptive rights.

           (c)        Upon their issuance in accordance with the terms of the
Series B Preferred Stock and the Series C Preferred Stock, respectively, the
shares of Voting Common Stock issuable upon conversion of the Series B Preferred
Stock and the shares of Nonvoting Common Stock issuable upon conversion of the
Series C Preferred Stock will be duly authorized, validly issued, fully paid and
nonassessable shares of the Company, and free of preemptive rights.

           (d)        Upon their issuance in accordance with the terms of the
Nonvoting Common Stock, the shares of Voting Common Stock issuable upon
conversion of the Nonvoting Common Stock will be duly authorized, validly
issued, fully paid and nonassessable shares of the Company, and free of
preemptive rights.

           3.6        No Consents Required; No Violation of Laws.

           Neither the nature of the business which the Company conducts,, nor
any relationship between the Company and any other Person, nor any circumstance
in connection with the creation, authorization, issuance, offer or sale of the
Voting Common Stock, the Nonvoting Common Stock, the Series B Preferred Stock or
the Series C Preferred Stock as contemplated by this Agreement is such as to
require a consent, approval or authorization of, or filing, registration or
qualification with, any Person or any governmental authority on the part of the
Company, except for state and Federal securities law filings, or the vote,
consent or approval of the holders of any Security (as defined in Section 9) of
the Company as a condition to the execution and delivery of this Agreement or
the authorization, issuance, offer and sale of the Voting Common Stock, the
Nonvoting Common Stock, the Series B Preferred Stock or the Series C Preferred
Stock hereunder.

           3.7        Qualification To Do Business.

           The Company has filed all necessary documents to qualify to do
business as a foreign corporation in, and the Company is in good standing under
the laws of, each jurisdiction

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listed in Schedule 3.7 hereto, and such jurisdictions constitute the only
jurisdictions in which the conduct of the Company's business or the nature of
the property owned or leased by it require it to qualify to do business as a
foreign corporation, except where the failure to so qualify would not have a
material adverse effect on the business, financial position or prospects of the
Company.

           3.8        Absence of Defaults. Conflicts. etc.

           The execution and delivery of this Agreement, the Securities Purchase
Agreements and the Shareholders' Agreement, the authorization, issuance, offer
and sale of the Voting Common Stock, the Nonvoting Common Stock, the Series B
Preferred Stock and the Series C Preferred Stock contemplated hereby, the
adoption by the Board of Directors of the Company of the Amended Certificate and
the Amended and Restated By-Laws and the fulfillment of the terms hereof and
thereof by the Company, will not (A) result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, or permit the
acceleration of rights under or termination of, any indenture, mortgage, deed of
trust, credit agreement, note or other evidence of indebtedness, or other
agreement of the Company, or (B) violate the Certificate of Incorporation or
Amended Certificate or By-Laws or Amended and Restated By-laws of the Company,
or any rule or regulation of any court or Federal or state or other regulatory
board or body or administrative agency having jurisdiction over the Company or
over its properties or businesses. No event has occurred and no condition exists
which, upon notice or the passage of time, or both, would constitute a default
under any such agreements and instruments or in any license, permit or
authorization to which the Company is a party or by which it may be bound.

           3.9        Financial Statements. Material Liabilities.

           (a)        The Company has previously delivered to Warburg its
balance sheet as at December 31, 1993, and the related statement of income for
the year then ended, in each case compiled by the Company. (the "Financial
Statements"). Such Financial Statements, Including the notes thereto, have been
prepared from the books and records of the Company and present fairly the
financial position and the results of operations and cash flows of the Company
as at and for the periods indicated, in each case in conformity with generally
accepted accounting principles ("GAAP") consistently applied.

           (b)        The Company has previously delivered to Warburg its
interim balance sheet of the Company as at March 31, 1994 and statement of
income for the three months then ended. Such interim financial Statements have
been prepared from the books and records of the Company and, subject to
customary year end adjustments, present fairly the financial position and the
results of operations of the Company as at and for the period indicated.

           (c)        Except as set forth in the Financial Statements and the
interim statements described in Section 3.9(b), the Company has no material
liabilities or obligations, absolute or contingent, except (i) obligations and
liabilities incurred in the ordinary course of business since the respective
dates of such statements, none of which is material, (ii) obligations which are
not required to be reflected in the Financial Statements or such interim
statements, or (iii) as set forth on Schedule 3.9.

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           3.10       Absence of Certain Developments.

           Since December 31, 1993, there has been no (i) material adverse
change in the condition, financial or otherwise, of the Company or in its
assets, liabilities, properties, or business or prospects, taken as a whole,
(ii) declaration, setting aside or payment of any dividend or other distribution
with respect to the capital stock of the Company or redemption of any share of
capital stock of the Company, (iii) issuance of any capital stock or options or
rights to acquire capital stock other than as set forth on Schedule 3.10 hereto,
(iv) material loss, destruction or damage to any property of the Company,
whether or not insured, (v) acceleration or prepayment of any indebtedness for a
material amount of borrowed money or the refunding of any such indebtedness,
(vi) labor trouble involving the Company or any material change in its personnel
or the terms and conditions of employment, (vii) waiver of any valuable right
which could reasonably be expected to have a material adverse effect on the
business, financial position or prospects of the Company, (viii) loan or
extension of credit by the Company to any officer or employee of the Company
(other than reasonable travel advances) or (ix) acquisition or disposition of
any material assets (or any contract or arrangement therefor) otherwise than for
fair value in the ordinary course of business, or any other transaction by the
Company otherwise than for fair value in the ordinary course of business.

           3.11       Compliance with Law.

           The Company is not in violation of any laws, ordinances, governmental
rules or regulations to which it is subject, including without limitation laws
or regulations relating to the environment or to occupational health and safety,
and to its knowledge no material expenditures are or will be required in order
to cause its current operations or properties to comply with any such law,
ordinances, governmental rules or regulations.

           3.12       Pending Actions.

           There is no action, suit, investigation or proceeding pending or, to
the knowledge of the Company threatened, against the Company or any of its
properties or assets by or before any court, arbitrator or governmental
authority which questions the validity of this Agreement, the Aspen Securities
Purchase Agreement, the Shareholders' Agreement, the Restated Certificate, the
Amended and Restated By-laws or any action taken or to be taken pursuant hereto
or thereto, or which could reasonably be expected to have a material adverse
effect on the business, financial position or prospects of the Company, and the
Company is not in default with respect to any judgment, order, writ, injunction,
decree, or award having applicability to it or its business or properties.

           3.13       Tax Matters.

           The provisions for taxes on the balance sheets described in Section
3.9 are adequate under GAAP to reflect the accrued liability in respect of all
accrued and unpaid Federal, state, county and local taxes of the Company whether
or not assessed or disputed as of the respective dates of such balance sheets.
The Company has completed and duly filed all Federal, state, county and local
tax returns required to have been filed by it and all taxes which are shown on
such returns have been paid (other than taxes contested in good faith by

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appropriate proceeding). There are in effect no waivers of applicable
statutes of limitations with respect to taxes for any year. No tax returns have
been audited by taxing authorities.

           3.14       Employees.

           Except as reflected on Schedule 3.14 hereto, the Company does not
have any employment contract with any of its employees (other than employment
agreements terminable by the Company without premium or penalty on notice of 30
days or less), or any collective bargaining agreements covering any of its
employees, nor has the Company been subject to any labor organization activity.
There are no material controversies or labor troubles pending or, to the
knowledge of the Company threatened, between the Company and any of its
employees. The Company has complied with all applicable federal and state laws
and regulations respecting employment and employment practices, terms and
conditions of employment, wages and hours and other laws related to employment.
Except as reflected on Schedule 3.14, there are no overdue arrears in the
payments of wages, withholding or social securities taxes, unemployment
insurance premiums or other similar obligations. Schedule 3.14 sets forth a
complete list of the employees currently working for the Company indicating
those who have executed confidentiality and non-disclosure agreements together
with the date on which such agreement was signed, and there is attached to such
Schedule a copy of the form(s) of agreement used for this purpose by the
Company. Except as listed on Schedule 3.14, no employee or consultant of the
Company has within the prior three months given any indication to the Company
that he or she intends to leave the employ of the Company or is considering
doing so, or is being terminated.

           3.15       Employee Benefit Plans.

           All employee benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974 ("ERISA")) covering former and
current employees of the Company, or under which the Company has any obligation
or liability (each, a "Benefit Plan") are listed in Schedule 3.15. No Benefit
Plan is a multiemployer plan (as defined in Section 3(37) of ERISA) or is an
employee pension benefit plan, as defined in Section 3(2) of ERISA. The Benefit
Plans are and have been administered in substantial compliance with their terms
and with the requirements prescribed by ERISA (to the extent that ERISA applies)
and the applicable provisions of the Code. The Company has not incurred any
liability under Title IV of ERISA, including any liability to the Pension
Benefit Guaranty Corporation. No Benefit Plan provides retirement or other
post-termination benefits except as required under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended or as discussed on Schedule 3.15.
No Benefit Plan has engaged in a transaction which would subject the Company to
a material tax, penalty or liability under the Code or ERISA. There is no
litigation pending or threatened with respect to any Benefit Plan. Schedule 3.15
lists all plans, contracts, bonuses, commissions, profit-sharing, savings, stock
options, insurance, deferred compensation, or other similar fringe or employee
benefits covering former or current employees of the Company or under which the
Company has any obligation or liability (each, a "Benefit Arrangement"). The
Benefit Arrangements are and have been administered in substantial compliance
with their terms and with the requirements of applicable law.

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           3.16       Copyrights, Trademarks, Licenses. etc.

           The Company owns, free and clear of all encumbrances, restrictions,
liens, security interests and charges, and has good and marketable title to, or
holds adequate licenses or otherwise possess all such rights (or such rights are
in the public domain) as are necessary to use all patents (and applications
therefor), patent disclosures, trademarks, service marks, trade names,
copyrights (and applications therefor), inventions, discoveries, processes,
know-how, scientific, technical, engineering and marketing data, software code,
formulae and techniques used or proposed to be used, in or necessary for the
conduct of its business as now Conducted or as proposed to be conducted.
Schedule 3.16 lists all patents, copyrights, trademarks, trade names or other
intellectual property rights held by the Company.

           The Company has not received notice nor otherwise has knowledge of
any conflict or alleged conflict with the rights of others pertaining to the
tangible and intangible assets described in this Section 3.16. To the Company's
knowledge, the Company's business, as presently conducted, does not infringe
upon or violate any intellectual property rights or trade secrets of others. To
the Company's knowledge, the Company has the right to use, free and clear of any
rights or claims of others, all intellectual property and trade secrets,
processes, customer lists and other rights to the extent reasonably necessary
for the conduct of the Company's business as presently conducted.

           The Company is not currently obligated or under any existing
liability to make royalty or other payments to any owner of, licensor of, or
other claimant to, any patent, trademark, service name, trade name, copyright,
or other intangible asset, with respect to the use thereof or in connection with
the conduct of its business as now conducted. To the Company's knowledge, no
employee of the Company is subject to any employment agreement or proprietary
information agreement which he or she had with a previous employer or any
intellectual property policy of such employer, which affects the rights of the
Company to use the technologies, patents, trademarks, trade secrets, service
names, trade names, copyrights, licenses and the like currently employed by the
Company, or is a party to or threatened by any litigation concerning any
patents, trademarks, trade secrets, service names, trade names, copyrights,
licenses and the like.

           3.17       Title to Tangible Assets.

           The Company has good title to its tangible properties and assets and
good title to all its leasehold estates, in each case subject to no mortgage,
pledge, lien, lease, encumbrance or charge, other than, or resulting from, taxes
which have not yet become delinquent and minor liens and encumbrances which do
not in any case materially detract from the value of the property subject
thereto or materially impair the operations of the Company.

           3.18       Insurance.

           Schedule 3.18 sets forth a true and complete listing of the insurance
policies of the Company as in effect on the date hereof. No notice of any
termination or threatened termination of any of such policies has been received
by the Company and such policies are in full force and effect.

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           3.19       Transactions with Related Parties.

           Except as disclosed on Schedule 3.19, the Company is not a party to
any agreement with any of the Company's officers, shareholders or directors or
any Affiliate of any of the foregoing under which it: (i) leases any real or
personal property (either to or from such person), (ii) has incurred any debt
for borrowed money or under which it has lent money (other than routine travel
advances), (iii) licenses technology (either to or from such person), (iv) is
obligated to purchase any tangible or intangible asset from or sell such asset
to such person, or (v) purchases products or services from such person (other
than pursuant to employment agreements described in Schedule 3.14).

           3.20       Interest in Competitors.

           Neither the Company nor to its knowledge any of its officers, has any
interest, either by way of contract or by way of investment (other than as
holder of not more than 5% of the outstanding capital stock of a publicly traded
Person) or otherwise, directly or indirectly, in any Person other than the
Company that (i) provides any services or designs, produces or sells any product
or product lines or engages in any activity similar to or competitive with any
activity currently conducted or proposed to be conducted by the Company or (ii)
has any direct or indirect interest in any asset or property, real or personal,
tangible or intangible, of the Company.

           3.21       Registration Rights.

           Except as set forth herein and after giving effect to the provisions
of the Aspen Securities Purchase Agreement, the Company is not under any
obligation to register any of its Securities under the Act.

           3.22       Brokers, Finders.

           There are no claims for brokerage commissions or finder's fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement made by or on behalf of the Company.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF WARBURG

           Warburg represents and warrants to the Company that:

           4.1 Authorization.

           This Agreement constitutes the valid and binding obligation of
Warburg, enforceable against Warburg in accordance with its terms. The
execution, delivery and performance of this Agreement have been duly authorized
by all necessary action on the part of Warburg and all consents of any third
parties that may be required to be obtained by Warburg for the consummation of
the transactions contemplated hereby have been obtained.

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           4.2        Investment for Own Account.

           Warburg is acquiring the Series B Preferred Stock and the Series C
Preferred Stock purchased hereunder (and will acquire the Voting Common Stock
upon conversion of the Series B Preferred Stock, the Nonvoting Common Stock upon
conversion of the Series C Preferred Stock and the Voting Common Stock upon
conversion of the Nonvoting Common Stock) for its own account for investment and
not with a view towards the resale, transfer or distribution thereof, nor with
any present intention of distributing such Series B Preferred Stock or Series C
Preferred Stock (or the shares of the Voting Common Stock acquired upon
conversion of the Series B Preferred Stock, the Nonvoting Common Stock acquired
upon conversion of the Series C Preferred Stock or the Voting Common Stock
acquired upon conversion of the Nonvoting Common Stock). No other Person has any
right with respect to or interest in the Series B Preferred Stock or the Series
C Preferred Stock to be purchased by Warburg, nor has Warburg agreed to give any
Person any such interest or right in the future.

           4.3        Offering Exemption.

           Warburg understands that the shares of the Series B Preferred Stock
and the Series C Preferred Stock being purchased hereunder have not been
registered under the Act, nor qualified under any state securities laws, and
that the Series B Preferred Stock and the Series C Preferred Stock are being
offered and sold pursuant to an exemption from such registration and
qualification based in part upon the representations of Warburg contained
herein.

           4.4        Knowledge and Experience; Ability to Bear Economic Risks.

           Warburg has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the investment
contemplated by this Agreement and Warburg is able to bear the economic risk of
its investment in the Company (including a complete loss of its investment).

           4.5        Limitations on Disposition.

           Warburg recognizes that no public market exists for the Series B
Preferred Stock and the Series C Preferred Stock to be sold hereunder, and no
representation has been made to Warburg that any such public market will exist
in the future. Warburg understands that it must bear the economic risk of this
investment indefinitely unless the Series B Preferred Stock and the Series C
Preferred Stock (or the Voting Common Stock and the Nonvoting Common Stock
issuable upon conversion thereof) are registered pursuant to the Act or an
exemption from such registration is available, and unless the disposition of the
Series B Preferred Stock and the Series C Preferred Stock (or the Voting Common
Stock and the Nonvoting Common Stock issuable upon conversion thereof) are
qualified under applicable state securities laws or an exemption from such
qualification is available, and that, except as provided in this Agreement, the
Company has no obligation or present intention of so registering the Series B
Preferred Stock or the Series C Preferred Stock (or the Voting Common Stock or
the Nonvoting Common Stock issuable upon conversion thereof). Warburg
understands that there is no assurance that any exemption from the Act will be
available, or, if available, that such exemption will allow it to dispose of or
otherwise transfer any or all of the Series B Preferred Stock or Series C
Preferred

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Stock, or the Voting Common Stock issuable on the Series B Preferred Stock,
conversion hereof Nonvoting Common Stock issuable upon conversion of the Series
C Preferred Stock or the Voting Common Stock issuable upon conversion of the
Nonvoting Common Stock, in the amounts or at the times Warburg might desire.
Warburg understands that at the present time Rule 144 promulgated under the Act
by the Securities and Exchange Commission ("Rule 144") is not applicable to
sales of the Series B Preferred Stock the Series C Preferred Stock, the Voting
Common Stock or the Nonvoting Common Stock because they are not registered under
Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act"), and
there is not publicly available the information concerning the Company specified
in Rule 144. Warburg acknowledges that the Company is not presently under any
obligation to register under Section 12 of the Exchange Act or to make publicly
available the information specified in Rule 144 and that except as provided
herein, is not otherwise required to do so.

           4.6        Brokers, Finders.

           The transactions contemplated hereby were not submitted to Warburg by
any broker or other person entitled to a commission, a finder's fee or like
payment thereon and were not with Warburg's authority submitted to the Company
by any broker or other person, and Warburg's action has not given rise to any
valid claim by any person against Warburg or the Company for a commission,
finder's fee or like payment.

SECTION 5. WARBURG'S CLOSING CONDITIONS

           The obligation of Warburg to purchase the Series B Preferred Stock
and the Series C Preferred Stock to be sold hereunder on the Closing Date shall
be subject to the following closing conditions having been fulfilled by the
Company on or prior to the Closing Date:

           5.1        Representations and Warranties.

           The representations and warranties of the Company contained in this
Agreement shall be true on and as of the Closing Date in all material respects
as though such representations and warranties were made at and as of such date,
except as otherwise affected by the transactions contemplated hereby.

           5.2        Compliance with Agreement.

           The Company shall have performed and complied in all material
respects with all agreements, covenants and conditions contained in this
Agreement which are required to be performed or complied with by the Company
prior to or on the Closing Date.

           5.3        Officer's Certificates.

           Warburg shall have received a certificate, dated the Closing Date,
signed by an executive officer of the Company on behalf of the Company,
certifying that with respect to the Company, the conditions specified in the
foregoing Sections 5.1 and 5.2 hereof have been fulfilled.

                                      -11-
<PAGE>   13

           5.4        Amended Certificate; Amended and Restated By-Laws;
                      Shareholder Action.

           (a)        The Amended Certificate shall have been duly approved and
adopted by the requisite shareholder vote and shall have been filed and become
effective under New York law.

           (b)        The Amended and Restated By-Laws shall have been duly
approved and adopted by the Board of Directors of the Company and shall have
become effective under New York law.

           (c)        All other action required to be taken by the Company's
shareholders in connection with the transactions contemplated by this Agreement,
the Shareholders' Agreement and the Securities Purchase Agreements shall have
been duly taken by such holders.

           5.5        Shareholders' Agreement.

           The Company and Craig Skevington shall have entered into a
Shareholders' Agreement in the form of Exhibit F annexed hereto (the
"Shareholders' Agreement").

           5.6        Purchase of Securities by the Company; Termination of
                      Preemptive Rights.

           (a)        The Company and each party to a Securities Purchase
Agreement shall have consummated the transactions contemplated by the Securities
Purchase Agreements in accordance with the terms thereof.

           (b)        The Company and Rensselear Polytechnic Institute ("RPI")
shall have entered into an agreement which terminates RPI's preemptive rights
with respect to the Company's capital stock (the "RPI Preemptive Rights
Termination Agreement").

           5.7        Appointment of President and Chief Operating Officer;
                      Appointment of Directors.

           (a)        The Company's Board of Directors shall have appointed
Joseph Trino as the President and Chief Operating Officer of the Company and
entered into an agreement relating to Mr. Trino's employment, the term of which
shall be satisfactory to Warburg.

           (b)        All necessary corporate action shall have been taken to
reconstitute the Company's Board of Directors so that it shall be a Board of six
members, with one vacancy and five members being: Craig Skevington, Joseph
Trino, Henry Kressel, Jeffrey Horing and Donald Payne.

           5.8        Legal Opinion.

           Warburg shall have received an opinion of Harris, Beach & Wilcox,
counsel to the Company, substantially to the effect that:

                                      -12-
<PAGE>   14

                      (i)        The Company was duly organized as a corporation
and is existing in good standing under the laws of the State of New York and has
all requisite power and authority to own its properties and to carry on its
business as now conducted.

                      (ii)       The Company is duly qualified and in good
standing as a foreign corporation in all jurisdictions in which the conduct of
the Company's business or the nature of the property owned or leased by the
Company requires such qualification, except where the failure to so qualify
would not have a material adverse effect on the business or financial position
of the Company.

                      (iii)      All Board of Directors and shareholder action
required to authorize the amendments and restatements included in the Amended
Certificate and the Amended and Restated By-Laws have been duly and validly
taken, the Amended Certificate has been duly filed and the Amended Certificate
and the Amended and Restated By-Laws have become effective under New York law.

                      (iv)       Section 3.3 of the Agreement accurately sets
forth the authorized and issued capital stock of the Company existing as of the
date of this Agreement and after giving effect to the purchases and sales
contemplated herein and by the Securities Purchase Agreements, and all such
outstanding shares of capital stock of the Company as described in Section 3.3
are duly authorized, validly issued, fully paid and nonassessable and free of
preemptive rights.

                      (v)        The Company has duly authorized the issuance
and delivery of the Series B Preferred Stock and the Series C Preferred Stock in
accordance with this Agreement and the Company has duly reserved for issuance
shares of Voting Common Stock issuable upon conversion of the Series B Preferred
Stock, shares of Nonvoting Common Stock issuable upon conversion of the Series C
Preferred Stock and Voting Common Stock issuable upon conversion of the
Nonvoting Stock Common. Upon their issuance in accordance with the terms of the
Series B Preferred Stock, the shares of Voting Common Stock issuable upon
conversion of the Series B Preferred Stock will be duly authorized, validly
issued, fully paid and nonassessable shares of Voting Common Stock of the
Company, and free of preemptive rights; upon their issuance in accordance with
the terms of the Series C Preferred Stock, the Nonvoting Common Stock will be
duly authorized, validly issued, fully paid and nonassessable shares of
Nonvoting Common Stock, and free of preemptive rights; and upon their issuance
in accordance with the terms of the Nonvoting Common Stock, the Voting Common
Stock will be duly authorized, validly issued, fully paid and non assessable
shares of Voting Common Stock, and free of preemptive rights.

                      (vi)       The Company has duly authorized the execution,
delivery and performance of this Agreement, the Securities Purchase Agreements,
the Shareholders' Agreement and the RPI Preemptive Rights Termination Agreement
and each of the transactions and agreements contemplated hereby and thereby, and
no other corporate action is necessary to authorize such execution, delivery or
performance. This Agreement, the Securities Purchase Agreements, the
Shareholders' Agreement and the RPI Preemptive Rights Termination Agreement have
been duly executed and delivered

                                      -13-
<PAGE>   15

on behalf of the Company and constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights, and the effect of general principles of equity whether
applied by a court of law or equity.

                      (vii)      The execution and delivery by the Company of
this Agreement, the Securities Purchase Agreements, the Shareholders' Agreement
and the RPI Preemptive Rights Termination Agreement, the performance by the
Company of its obligations hereunder and thereunder and the consummation by the
Company of the transactions contemplated hereby and thereby do not require the
Company to obtain any consent, approval or action of, or make any filing with or
give any notice to any governmental authority, except such as have been duly
obtained or made, as the case may be, and are in full force and effect.

                      (viii)     The execution and delivery of this Agreement,
the Securities Purchase Agreements, the Shareholders' Agreement and the RPI
Preemptive Rights Termination Agreement and the adoption by the Board of
Directors of the Company of the Amended Certificate and the Amended and Restated
By-Laws do not, and the fulfillment of the terms hereof and thereof by the
Company, and if the Company were now to issue the Voting Common Stock upon
conversion of the Series B Preferred Stock, the Nonvoting Common Stock upon the
conversion of the Series C Preferred Stock or the Voting Common Stock upon
conversion of the Nonvoting Common Stock, such issuances would not, (A) result
in a breach of any of the terms, conditions or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, credit agreement, note or
other evidence of indebtedness, or other material agreement to which the Company
is a party, or (B) violate the Certificate of Incorporation or Amended
Certificate or By-laws or Amended and Restated By-Laws, or any rule or
regulation known to such counsel of any court or Federal, state or other
regulatory board or body or administrative agency having jurisdiction over the
Company or over its properties or businesses.

                      (ix)       To the knowledge of such counsel, there is no
action, suit, investigation or proceeding pending or threatened against the
Company or any of its properties or assets by or before any court, arbitrator or
governmental authority which questions the validity of this Agreement, the
Securities Purchase Agreements, the Shareholders Agreement, the RPI Preemptive
Rights Termination Agreement, the Amended Certificate, the Amended and Restated
By-Laws or any action taken or to be taken pursuant hereto or thereto, and the
Company is not in default with respect to any judgment, order, writ, injunction,
decree or award having applicability to the Company or its business or
properties.

           5.9        Skevington Employment Agreement.

           The Company and Craig Skevington shall enter into an agreement
relating to Skevington's employment, the terms of which shall be satisfactory to
Warburg and Skevington.

                                      -14-
<PAGE>   16

           5.10       Approval of Proceedings.

           All proceedings to be taken in connection with the transactions
contemplated by this Agreement, and all documents incident thereto, shall be
satisfactory in form and substance to Warburg and its special counsel, Willkie
Farr & Gallagher; and Warburg shall have received copies of all documents or
other evidence which it and Willkie Farr & Gallagher may request in connection
with such transactions and of all records of corporate proceedings in connection
therewith in form and substance satisfactory to Warburg and Willkie Farr &
Gallagher.

           5.11       Injunction.

           There shall be no effective injunction, writ, preliminary restraining
order or any order of any nature issued by a court of competent jurisdiction
directing that the transactions provided for herein or any of them not be
consummated as herein provided.

           5.12       Adverse Development.

           Except as set forth in this Agreement and the schedules hereto, there
shall have been no developments in the business of the Company since March 31,
1994 which in the opinion of Warburg would have a materially adverse affect upon
the value of such business or on the financial condition, goodwill or prospects
of the Company.

SECTION 6. COMPANY'S CLOSING CONDITIONS

           The obligation of the Company to sell the Series B Preferred Stock to
be sold hereunder on the Closing Date shall be subject to the following closing
conditions having been fulfilled by Warburg on or prior to the Closing Date:

           6.1        Representations and Warranties.

           The representations and warranties of Warburg contained in this
Agreement shall be true on and as of the Closing Date in all material respects
as though such representations and warranties were made at and as of such date,
except as otherwise affected by the transactions contemplated hereby.

           6.2        Compliance with Agreement.

           Warburg shall have performed and complied in all material respects
with all agreements, covenants and conditions contained in this Agreement which
are required to be performed or complied with by Warburg prior to or on the
Closing Date.

           6.3        Officer's Certificates.

           The Company shall have received a certificate, dated the Closing
Date, signed by a duly authorized representative of Warburg, certifying that
with respect to Warburg, the conditions specified in the foregoing Sections 6.1
and 6.2 hereof have been fulfilled.

                                      -15-
<PAGE>   17

           6.4        Approval of Proceedings.

           All proceedings to be taken in connection with the transactions
contemplated by this Agreement, and all documents incident thereto, shall be
satisfactory in form and substance to the Company and its counsel, Harris, Beach
& Wilcox; and the Company shall have received copies of all documents or other
evidence which the Company and its counsel may reasonably request in connection
with such transactions and of all records of corporate proceedings in connection
therewith in form and substance satisfactory to the Company and its counsel.

           6.5        Injunction.

           There shall be no effective injunction, writ, preliminary restraining
order or any order of any nature issued by a court of competent jurisdiction
directing that the transactions provided for herein or any of them not be
consummated as herein provided.

SECTION 7. REGISTRATION RIGHTS

           7.1        Definitions.

           As used in this Section 7:

           (a)        the terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;

           (b)        the term "Registrable Securities" means (A) shares of
Voting Common Stock issuable upon conversion of Series B Preferred Stock, (B)
shares of Voting Common Stock issuable upon conversion of Nonvoting Common Stock
issuable upon conversion of Series C Preferred Stock, (C) shares of Voting
Common Stock held by Skevington on the date hereof, (D) any shares of Voting
Common Stock which the parties hereto may hereafter acquire and (E) any capital
stock of the Company issued as a dividend or other distribution with respect to,
or in exchange for or in replacement of, the shares of Voting Common Stock
referred to in clauses (A)-(D) above;

           (c)        the term "Holder" shall mean any holder of Registrable
Securities;

           (d)        the term "Initiating Holder" shall mean Warburg (and its
successors and assigns) so long as such party holds (directly or indirectly) at
least 20% of the Voting Common Stock on a fully diluted basis;

           (e)        "Commission" shall mean the Securities and Exchange
Commission or any other Federal agency at the time administering the Act;

           (f)        "Registration Expenses" shall mean all expenses incurred
by the Company in compliance with Sections 7.2 and 7.3 hereof, including,
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such

                                      -16-
<PAGE>   18

registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company); and

           (g)        "Selling Expenses" shall mean all underwriting discounts
and selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for each of the Holders.

           7.2        Requested Registration.

           (a)        Request for Registration. If the Company shall receive
from an Initiating Holder, at any time while this Agreement remains in effect, a
written request that the Company effect a registration under the Act of all or
part of such Initiating Holder's Registrable Securities, the Company shall:

                      (i)        promptly give written notice of the proposed
           registration, qualification or compliance to all other Holders of
           Registrable Securities; and

                      (ii)       as soon as practicable, use its diligent best
           efforts to effect such registration under the Act (including, without
           limitation, the execution of an undertaking to file post-effective
           amendments, appropriate qualification under applicable blue sky or
           other state securities laws and appropriate compliance with
           applicable regulations issued under the Act) as may be so requested
           and as would permit or facilitate the sale and distribution of all or
           such portion of such Registrable Securities as are specified in such
           request, together with all or such portion of the Registrable
           Securities of any Holder or Holders joining in such request as are
           specified in a written request received by the Company within ten
           business days after written notice from the Company is given under
           Section 6.2 (a) (i) above;

provided, however, that the Company shall not be obligated to effect or take any
action to effect, more than two registrations pursuant to this Section 7.2
(unless the Company is eligible to register under the Act on Form S-3, in which
case, the Initiating Holder may make an unlimited number of requests for
registration) and provided, further, that the Company will not be obligated to
effect, or take any action to effect, any registration pursuant to this Section
7.2 in any particular jurisdiction in which the Company would be required to
execute a general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to such
jurisdiction and except as may be required by the Act or applicable rules or
regulations thereunder.

The registration statement filed pursuant to the request of the Initiating
Holder may, subject to the provisions of Section 7.2(b) below, include other
Securities of the Company which are held by officers or directors of the
Company, or which are held by persons who, by virtue of agreements with the
Company, are entitled to include their Securities in any such registration, but
the Company shall have no absolute right to include any of its Securities in any
such registration.

                                      -17-
<PAGE>   19

           (b)        Underwriting. If the Initiating Holder intends to
distribute the Registrable Securities covered by its request by means of an
underwriting, it shall so advise the Company as a part of its request made
pursuant to Section 7.2(a).

           If officers or directors of the Company holding other Securities of
the Company shall request inclusion in any registration pursuant to Section 7.2,
or if holders of Securities of the Company other than Registrable Securities who
are entitled, by contract with the Company or otherwise, to have Securities
included in such a registration (the "Other Shareholders") request such
inclusion, the Company shall offer to include the Securities of such officers,
directors and Other Shareholders in the underwriting and may condition such
offer on their acceptance of the further applicable provisions of this Section
7. The Company and the Initiating Holder shall (together with all officers,
directors and Other Shareholders proposing to distribute their Securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected for
such underwriting by the Initiating Holder and reasonably acceptable to the
Company. Notwithstanding any other provision of this Section 7.2, if the
managing underwriter or representative of the managing underwriter advises the
Holders in writing that marketing factors require a limitation on the number of
shares to be underwritten, the Securities of the Company held by officers or
directors (other than Registrable Securities) of the Company and the Securities
held by Other Shareholders shall be excluded from such registration to the
extent so required by such limitation. If, after the exclusion of Securities of
the Company held by officers or directors and Other Shareholders, further
reductions are still required, the number of shares included in the registration
by each Holder shall be reduced on a pro rata basis, by such minimum number of
shares as is necessary to comply with such request. No Registrable Securities or
any other Securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration. If
any officer, director or Other Shareholder who has requested inclusion in such
registration as provided above disapproves of the terms of the underwriting,
such Person may elect to withdraw therefrom by written notice to the Company,
the underwriter and the Initiating Holder. The Securities so withdrawn shall
also be withdrawn from registration. If the underwriter has not limited the
number of Registrable Securities or other Securities to be underwritten, the
Company may include its Securities for its own account in such registration if
the underwriter so agrees and if the number of Registrable Securities and other
Securities which would otherwise have been included in such registration and
underwriting will not thereby be limited.

           7.3        Company Registration.

           (a)        If the Company shall determine to register any of its
Securities either for its own account or for the account of a security holder or
Holders exercising their respective demand registration rights, other than a
registration relating solely to employee benefit plans, or a registration
relating solely to a transaction of the type described in Rule 145 under the Act
or any successor to Rule 145, or a registration on any registration form which
does not permit secondary sales or does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:

                                      -18-
<PAGE>   20

                      (i)        promptly give to each of the Holders a written
           notice thereof (which shall include a list of the jurisdictions in
           which the Company intends to attempt to qualify such Securities under
           the applicable blue sky or other state securities laws); and

include in such registration (and any related qualification Under blue sky laws
or other compliance), and in any underwriting involved therein, all the
Registrable Securities specified in a written request or requests, made by the
Holders within 10 days after receipt of the written notice from the Company
described in clause (i) above, except as the number of such Registrable
Securities may be limited by Section 7.3(b) below. Such written request may
specify all or a part of the Holders' Registrable Securities.

           (b)        Underwriting. If the registration of which the Company
gives notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 7.3(a) (i). In such event, the right of each of the
Holders to registration pursuant to this Section 7.3 shall be conditioned upon
such Holders' participation in such underwriting and the inclusion of such
Holders' Registrable Securities in the underwriting to the extent provided
herein. The Holders shall (together with the Company and the Other Shareholders
distributing their Securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for underwriting by the Company. Notwithstanding any other provision of
this Section 7.3, if the underwriter or underwriters determine that marketing
factors require a limitation on the number of shares to be underwritten, and (x)
if such registration is the first registered offering of the Company's
Securities to the public, the underwriter may (subject to the allocation
priority set forth below) exclude from such registration and underwriting some
or all of the Registrable Securities which would otherwise be underwritten
pursuant hereto, and (y) if such registration is other than the first registered
offering of the Company's Securities to the public, the underwriter may (subject
to the allocation priority set forth below) limit the number of Registrable
Securities to be included in the registration and underwriting to not less than
twenty five percent (25%) of the Securities included therein (based on aggregate
market values). The Company shall so advise all Holders of Securities requesting
registration, and the number of Securities that are entitled to be included in
the registration and underwriting shall be allocated in the following manner:
the Securities of the Company held by officers, directors and Other Shareholders
of the Company (other than Registrable Securities and other than Securities held
by holders who by contractual right demanded such registration ("Demanding
Holders")) shall be excluded from such registration and underwriting to the
extent required by such limitation, and, if a limitation on the number of shares
is still required, the number of shares that may be included in the registration
and underwriting by each of the Holders and Demanding Holders shall be reduced,
on a pro rata basis, by such minimum number of shares as is necessary to comply
with such limitation. If any of the Holders or any officer, director or Other
Shareholder disapproves of the terms of any such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the underwriter. Any
Registrable Securities or other Securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.

           (c)        Number. Each of the Holders shall be entitled, pursuant to
this Section 7.3, to have his or its Registrable Securities included in an
unlimited number of registrations which have been declared or ordered effective.

                                      -19-
<PAGE>   21

           7.4        Expenses of Registration.

           All Registration Expenses incurred in connection with any
registration, qualification or compliance pursuant to this Section 7 shall be
borne by the Company, and all Selling Expenses shall be borne by the holders of
the Securities so registered pro rata on the basis of the number of their shares
so registered; provided, however, that the Company shall not be required to pay
any Registration Expenses if, as a result of the withdrawal of a request for
registration by any of the Holders of Securities, as applicable, the
registration statement does not become effective, in which case each of the
Holders and Other Shareholders requesting registration shall bear such
Registration Expenses pro rata on the basis of the number of their shares so
included in the registration request, and provided, further, that such
registration shall not be counted as a registration for purposes of Section
7.2(a) hereof.

           7.5        Registration Procedures.

           In the case of each registration effected by the Company pursuant to
Section 7, the Company will keep the Holders, as applicable, advised in writing
as to the initiation of each registration and as to the completion thereof. At
its expense, the Company will:

           (a)        Keep such registration effective for a period of 120 days
or until the Holders, as applicable, have completed the distribution described
in the registration statement relating thereto, whichever first occurs;
provided, however, that (i) such 120-day period shall be extended for a period
of time equal to the period during which the Holders, as applicable, refrain
from selling any Securities included in such registration in accordance with the
provisions of Section 7.9 hereof; and (ii) in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, such 120-day period shall be extended until all
such Registrable Securities are sold, provided that Rule 415, or any successor
rule under the Act, permits an offering on a continuous or delayed basis, and
provided further that applicable rules under the Act governing the obligation to
file a post-effective amendment permit, in lieu of filing a post-effective
amendment which (y) includes any prospectus required by Section 10(a) (3) of the
Act or (z) reflects facts or events representing a material or fundamental
change in the information set forth in the registration statement, the
incorporation by reference of information required to be included in (y) and (z)
above to be contained in periodic reports filed pursuant to Section 13 or 15(d)
of the Exchange Act in the registration statement; and

           (b)        Furnish such number of prospectuses and other documents
incident thereto as each of the Holders, as applicable, from time to time may
reasonably request.

           7.6        Indemnification.

           (a)        The Company will indemnify each of the Holders, each of
the Holders' officers, directors and partners, and each person controlling each
of the Holders, as applicable, with respect to each registration which has been
effected pursuant to this Section 7, and each underwriter, if any, and each
Person who controls any underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering

                                      -20-
<PAGE>   22

circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on any 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 any violation by the Company of the Act or any rule
or regulation thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each of the Holders, each of the
Holders' officers, directors and partners, and each Person controlling each of
the Holders, each such underwriter and each Person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by any of the Holders or underwriter or
Person controlling such Holder or underwriter and stated to be specifically for
use therein.

           (b)        Each of the Holders will, if Registrable Securities held
by it are included in the Securities as to which such registration,
qualification or compliance is being effected, severally indemnify the Company,
each of the Company's directors and officers and each underwriter, if any, of
the Company's Securities covered by such a registration statement, each Person
who controls the Company or such underwriter within the meaning of the Act and
the rules and regulations thereunder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement, prospectus, offering circular or other document
made by such Holder, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading by such Holder, and will reimburse the Company,
directors, officers, partners, Persons, underwriters or control persons for any
legal or any other expenses reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein; provided, however, that unless
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is willfully made, the obligations of each of the Holders hereunder
shall be limited to an amount equal to the net proceeds to such Holder of
Securities sold as contemplated herein.

           (c)        Each party entitled to indemnification under this Section
7.6 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless (i) the employment of counsel by such
Indemnified Party has been authorized by the Indemnifying Party, (ii) the
Indemnified Party shall have reasonably concluded that there may be a conflict
of interest between the Indemnifying Party and the Indemnified Party in the
defense of

                                      -21-
<PAGE>   23

such action, in each of which cases the fees and expenses of counsel shall be at
the expense of the Indemnifying Party), and provided further that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 7. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. Each Indemnified Party
shall furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with the defense of such claim and litigation resulting
therefrom.

           (d)        If the indemnification provided for in this Section 7.6 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party thereunder, 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 of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates 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.

           (e)        Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in a negotiated
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall be controlling.

           7.7        Information by the Holders.

           Each of the Holders shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may reasonably request in writing and as shall be reasonably required in
connection with any registration, qualification or compliance referred to in
this Section 7. The Company shall request the same information from the Other
Shareholders holding Securities requested to be included in a registration.

           7.8        Rule 144 Reporting.

           With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted Securities
to the public without registration, the Company agrees to:

                                      -22-
<PAGE>   24

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

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

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

           7.9        "Market Stand-off" Agreement.

           Each of the Holders shall agree, if requested by the Company and the
underwriter or underwriters, not to sell or otherwise transfer or dispose of any
Securities of the Company held by such Holder during the one hundred eighty
(180) day period following the effective date of a registration statement of the
Company filed under the Act, provided that:

           (a)        such agreement shall only be required in connection with
the first such registration statement of the Company which includes Securities
to be sold on the Company's behalf to the public in an underwritten offering;
and

           (b)        all Other Shareholders and officers and directors of the
Company enter into similar agreements.

           The agreement shall be in writing in a form satisfactory to the
Company and such underwriter. The Company may impose stop-transfer instructions
with respect to the Securities of the Company subject to the foregoing
restriction until the end of said one hundred eighty (180) day period.

           7.10       Partnership Distribution.

           In the event that Warburg advises the Company that it desires to
exercise one of the registration rights granted to it under Sections 7.2 or 7.3
of this Agreement as a Holder of Registrable Securities in order to effect a
distribution of some or all of such Registrable Securities to its partners,
then, notwithstanding any provision of this Agreement conditioning the inclusion
of Registrable Securities in a registration statement upon the Holder's
participation in an underwriting, Warburg may refrain from including such shares
in an underwriting and nevertheless cause such shares to be included in the
applicable registration statement, provided only that (a) such registration is
not the initial registration hereunder of the Company's

                                      -23-
<PAGE>   25

Securities, and (b) such Holder agrees not to effect such distribution until the
expiration of a standstill period requested by the managing underwriter of the
underwriting of the other Securities included in such registration, provided
that such period shall not exceed 90 days after the effective date of such
registration.

           7.11       Limitation of Registration Rights.

           Notwithstanding anything to the contrary contained in this Agreement,
the Company shall not be required to include in any registration statement filed
pursuant to Section 7.2 or 7.3 of this Agreement Registrable Securities held by
a Holder (i) if the Company shall have received opinions of counsel reasonably
satisfactory to such Holder and the Company to the effect that the proposed
disposition of such Registrable Securities by such Holder may be effected
without registration under the Act or (ii) to the extent such Holder's
Registrable Securities can then be sold during a single three month period
pursuant to Rule 144 under the Act.

           7.12       Assignability of Registration Rights.

           The registration rights granted pursuant to this Section 7 shall be
assignable at the option of each of the Holders, in whole or in part, to any
transferee of Registrable Securities (i) so long as such transferee owns at
least 1% of the Voting Common Stock (computed on a fully diluted basis) of the
Company or (ii) the transferee is an Affiliate of Warburg or Skevington;
provided, that the Company is given written notice by such Holder at the time or
within a reasonable period of time after said transfer, stating the name and
address of such transferee or assignee and identifying the Securities with
respect to which such registration rights are assigned.

SECTION 8. COVENANTS

           8.1        Financial and Business Information.

           From and after the date hereof, the Company shall deliver to Warburg
so long as it holds at least 10% of the Voting Common Stock on a fully diluted
basis:

           (a)        Monthly and Quarterly Statements - As soon as practicable,
and in any event within 30 days after the close of each month of each fiscal
year of the Company in the case of monthly statements and 45 days after the
close of each of the first three fiscal quarters of each fiscal year of the
Company in the case of quarterly statements, a consolidated balance sheet,
statement of income and statement of cash flows of the Company and its
subsidiaries as at the close of such month or quarter and covering operations
for such month or quarter, as the case may be, and the portion of the Company's
fiscal year ending on the last day of such month or quarter, all in reasonable
detail and prepared in accordance with generally accepted accounting principles,
consistently applied, subject to audit and year-end adjustments, setting forth
in each case in comparative form the figures for the comparable period of the
previous fiscal year and accompanied by a narrative description of the Company's
business and results of operations for such month or quarter. The Company shall
also provide comparisons of each pertinent item to the budget referred to in
subsection (c) below.

                                      -24-
<PAGE>   26

           (b)        Annual Statements - As soon as practicable after the end
of each fiscal year of the Company, and in any event within 60 days thereafter,
duplicate copies of:

           (1)        consolidated and consolidating balance sheets of the
     Company and its subsidiaries at the end of such year; and

           (2)        consolidated and consolidating statements of income,
     stockholders' equity and cash flows of the Company and its subsidiaries for
     such year, setting forth in each case in comparative form the figures for
     the previous fiscal year, all in reasonable detail and accompanied by an
     opinion thereon of a firm of independent certified public accountants of
     recognized national standing selected by the Company and reasonably
     acceptable to Warburg, which opinion shall state that such financial
     statements fairly present the financial position of the Company and its
     subsidiaries on a consolidated basis, as applicable, and have been prepared
     in accordance with generally accepted accounting principles consistently
     applied (except for changes in application in which such accountants
     concur) and that the examination of such accountants in connection with
     such financial statements has been made in accordance with generally
     accepted auditing standards, and accordingly included such tests of the
     accounting records and such other auditing procedures as were considered
     necessary in the circumstances, and the Company shall also provide
     comparisons of each pertinent item to the budget referred to in subsection
     (c) below.

           (c)        Business Plan: Projections - No later than 30 days prior
to the commencement of each fiscal year of the Company, an annual business plan
of the Company and projections of operating results, prepared on a monthly
basis, and a three year business plan of the Company and projections of
operating results. Within 45 days of the close of each semi-annual fiscal period
of the Company, the Company shall provide Warburg with an update of such monthly
projections. Such business plans, projections and updates shall contain such
substance and detail and shall be in such form as will be reasonably acceptable
to Warburg.

           (d)        Audit Reports - Promptly upon receipt thereof, one copy of
each other financial report and internal control letter submitted to the Company
by independent accountants in connection with any annual, interim or special
audit made by them of the books of the Company and its subsidiaries, as
applicable.

           (e)        Other Reports - Promptly upon their becoming available,
one copy of each financial statement, report, notice or proxy statement sent by
the Company to stockholders generally, of each financial statement, report,
notice or proxy statement sent by the Company or any of its subsidiaries to the
SEC or any successor agency, if applicable, of each regular or periodic report
and any registration statement, prospectus or written communication (other than
transmittal letters) in respect thereof filed by the Company or any of its
subsidiaries with, or received by such Person in connection therewith from, any
securities exchange or the SEC or any successor agency, of any press release
issued by the Company or any of its subsidiaries, and of any material of any
nature whatsoever prepared by the SEC or any successor agency thereto or any
state blue sky or securities law commission which relates to or affects in any
way the Company or any of its subsidiaries;

                                      -25-
<PAGE>   27

           (f)        ERISA - Promptly upon becoming aware of the occurrence of
any (i) "reportable event," as such term is defined in Section 4043 of ERISA and
the rules and regulations thereunder, or (ii) "prohibited transaction," as such
term is defined in Section 4975 of the Code, in connection with any employee
benefit pension plan, as defined in Section 3(2) of ERISA, or any trust created
thereunder, a written notice specifying the nature thereof, what action the
Company is taking or proposes to take with respect thereto, and, when known, any
action taken by the Internal Revenue Service with respect thereto;

           (g)        Progress Report - Prior to each regularly scheduled
meeting of the Board of Directors of the Company, a narrative report describing
the Company's activities since the date of the last such report, including a
description of business development, operating results and marketing efforts;
and

           (h)        Requested Information - With reasonable promptness, such
other data and information as from time to time may be reasonably requested.

           8.2        Inspection.

           As long as Warburg holds at least 10% of the Voting Common Stock or
holds Securities convertible into a number of shares of Voting Common Stock that
if converted would equal at least 10% of the Voting Common Stock outstanding
upon conversion, the Company shall permit Warburg, its nominees, assignees and
representatives to visit and inspect any of the properties of the Company, to
examine all its books of account, records, reports and other papers not
contractually required of the Company to be confidential or secret, to make
copies and extracts therefrom, and to discuss its affairs, finances and accounts
with its officers, directors, key employees and independent public accountants
or any of them (and by this provision the Company authorizes said accountants to
discuss with Warburg, its nominees, assignees and representatives the finances
and affairs of the Company and its subsidiaries), all at such reasonable times
and as often as may be reasonably requested.

           8.3        Confidentiality.

           (a)        As to so much of the information and other material
furnished under or in connection with this Agreement (whether furnished before,
on or after the date hereof, including without limitation, information furnished
pursuant to Sections 8.1 and 8.2 hereof) as constitutes or contains confidential
business, financial or other information of the Company or its subsidiaries,
Warburg covenants for itself, and, as applicable, for its directors, officers
and partners, that, Warburg will use due care to prevent its officers,
directors, partners, employees, counsel, accountants and other representatives
from disclosing such information to persons other than their respective
authorized employees, counsel, accountants, shareholders, partners, limited
partners and other authorized representatives; provided, however, that Warburg
may disclose or deliver any information or other material disclosed to or
received by it should it be advised by such counsel that such disclosure or
delivery is required by law, regulation or judicial or administrative order.

                                      -26-
<PAGE>   28

           For purposes of this Section 8.3(a), "due care" means at least the
same level of care that Warburg would use to protect the confidentiality of its
own sensitive or proprietary information, and this obligation shall survive
termination of this Agreement.

           (b)        From and after the consummation of an initial public
offering of Securities, to the extent that any of the information furnished
pursuant to Sections 8.1 or 8.2 hereof would constitute material, nonpublic
information for purposes of the Exchange Act, Warburg covenants for itself that
Warburg will not engage in any purchase or sale of Company Securities while in
possession of such information and prior to the time that such information is
made generally known to the public and that Warburg shall use due care to
prevent its officers, directors, partners, employees, counsel and other
representatives, who have been given access to such material, nonpublic
information, from engaging in any such purchase or sale during such period.

           8.4        Resale of Securities.

           (a)        Warburg covenants that it will not sell or otherwise
transfer the Series B Preferred Stock or the Series C Preferred Stock purchased
hereunder (or any shares of Voting Common Stock acquired upon the conversion of
shares of Series B Preferred Stock, any shares of Nonvoting Common Stock
acquired upon the Conversion of shares of Series C Preferred Stock or any shares
of Voting Common Stock acquired upon conversion of shares of Nonvoting Common
Stock) except pursuant to an effective registration under the Act or in a
transaction which, in the opinion of counsel reasonably satisfactory to the
Company, qualifies as an exempt transaction under the Act and the rules and
regulations promulgated thereunder and any applicable state securities laws.

           (b)        The certificates evidencing the shares of Series B
Preferred Stock and Series C Preferred Stock purchased hereunder and the shares
of Voting Common Stock and Nonvoting Common Stock acquired upon conversion
thereof shall bear the following legend:

                      "The securities evidenced hereby have not been registered
           under the Securities Act of 1933, as amended (the "Act"), and may not
           be transferred except pursuant to an effective registration under the
           Act or in a transaction which, in the opinion of counsel reasonably
           satisfactory to the Company, qualifies as an exempt transaction under
           the Act and the rules and regulations promulgated thereunder."

           8.5        Relocation of Corporate Headquarters.

           Within 90 days after the Closing Date, the Company shall provide to
Warburg a written commitment to relocate and a comprehensive relocation plan
relating to its relocation from Clifton Park, New York to Atlanta, Georgia or
Boston, Massachusetts.

           8.6        Covenants Pending Closing.

Pending the Closing of the transactions contemplated hereby, the Company will
not, without Warburg's prior written consent, take any action which would result
in any of the representations or warranties contained in this Agreement not
being true at and as of the time immediately after such action, or in any of the
covenants contained in this Agreement becoming incapable of performance. The
Company will promptly advise Warburg of any action or event of which it becomes
aware which has the effect of making incorrect any of such representations or
warranties or which has the effect of rendering any of such covenants incapable
of

                                      -27-
<PAGE>   29

performance. Pending the Closing, the Company shall not issue shares of capital
stock of the Company except pursuant to the terms of this Agreement.

           8.7        Keeping of Books.

           The Company shall keep proper books of record and account, in which
full and correct entries shall be made of all financial transactions and the
assets and business of the Company in accordance with GAAP consistently applied.

           8.8        Further Assurances.

           Each of the parties shall execute such documents and other papers and
take such further actions as may be reasonably required or desirable to carry
out the provisions hereof and the transactions contemplated hereby. Each such
party shall use its best efforts to fulfill or obtain the fulfillment of the
conditions to the Closing as promptly as practicable.

           8.9        Insurance.

           The Company shall maintain with financially sound and reputable
insurance companies insurance on the business and properties of the Company
(including, without limitation, product liability coverage, and directors and
officers liability insurance) in at least such amounts and against at least such
risks as are usually insured against by companies engaged in similar businesses
and as shall be reasonably acceptable to Warburg.

           8.10       Post-Closing Matters.

           (a)        The Company shall file an Amended and Restated Certificate
of Incorporation that deletes the Series A Preferred Stock within 7 Business
Days after the Closing.

           (b)        The Company shall enter into a ,,non-compete" agreement in
the form of Exhibit G annexed hereto with Anthony Conti within 10 Business Days
after the Closing.

           (c)        The Company and David Wachtel shall enter into the Company
standard form Proprietary Information Agreement for Consultants within 30
Business Days after Closing.

SECTION 9. INTERPRETATION OF THIS AGREEMENT

           9.1        Terms Defined.

           As used in this Agreement, the following terms have the respective
meanings set forth below:

           "Act" shall mean the Securities Act of 1933, as amended.

                                      -28-
<PAGE>   30

           "Affiliate" shall mean with respect to any Person, any other Person
which directly or indirectly, by itself or through one or more intermediaries,
controls, or is controlled by, or is under direct or indirect common control
with, such Person. The term "control" means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.

           "Aspen Securities Purchase Agreement" shall mean the Securities
Purchase Agreement dated May 6, 1994 between the Company and Aspen Venture
Partners, L.P.

           "Business Day" shall mean any day which is not a Saturday, Sunday or
day on which banks are authorized by law to be closed in the State of New York.

           "Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder.

           "Exchange Act" shall mean the Securities Exchange Act of 1934.

           "Person" shall mean an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof.

           "Security, Securities" shall have the meanings ascribed thereto in
Section 2(1) of the Act.

           "Securities Purchase Agreements" shall mean the Securities Purchase
Agreements between the Company and each of Aspen Venture Partners L.P., Borden,
Clemens and Fulup dated May 6, 1994 and between the Company and Gillespie dated
May 10, 1994.

           9.2        Accounting Principles.

           Where the character or amount of any asset or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, this shall be done in accordance with generally
accepted accounting principles at the time in effect, to the extent applicable,
except where such principles are inconsistent with the requirements of this
Agreement.

           9.3        Directly or Indirectly.

           Where any provision in this Agreement refers to action to be taken
by, or prohibited to be taken by, any Person, such provision shall be applicable
whether such action is taken directly or indirectly by such Person.

           9.4        Governing Law.

           This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.

                                      -29-
<PAGE>   31

           9.5        Section Headings.

           The headings of the sections and subsections of this Agreement are
for convenience only and shall not be deemed to constitute a part of this
Agreement.

SECTION 10. MISCELLANEOUS

           10.1       Notices.

           All notices, instructions or other communications required or
permitted to be given hereunder or necessary in connection herewith shall be in
writing and shall be deemed to have been duly delivered upon the delivery
thereof, if delivered personally, upon the transmission thereof, if sent by
facsimile transmission, on the second business day after delivery to an air
courier company for express delivery, or on the seventh business day after
mailing, if mailed, postage prepaid, registered or certified mail, as follows:

                      (i)        if to Warburg, at the address shown below,
           marked for attention as there indicated, or at such other address as
           Warburg may have furnished to the Company and Skevington in writing:

                                 Warburg, Pincus Investors, L.P.
                                 466 Lexington Avenue
                                 New York, New York 10017
                                 Facsimile: (212) 878-9351
                                 Attention: Jeffrey Horing

                      (ii)       if to the Company, at the address shown below,
           or at such other address as the Company may have furnished to Warburg
           and Skevington in writing:

                                 Factory Automation & Computer
                                 Technologies, Inc.
                                 3 Tallow Wood Drive
                                 Clifton Park, New York 12065
                                 Facsimile: (518) 373-1039
                                 Attention: Chief Executive Officer

                      (iii)      if to Skevington, at the address shown below,
           or at such other address as Skevington may have furnished to Warburg
           and the Company in writing:

                                 Craig Skevington
                                 c/o Factory Automation & Computer
                                     Technologies, Inc.
                                 3 Tallow Wood Drive
                                 Clifton Park, New York 12065
                                 Facsimile: (518) 373-1039

                                      -30-
<PAGE>   32

           10.2       Expenses and Taxes.

           (a)        The Company shall be responsible for the fees and
disbursements of its legal counsel, Harris, Beach & Wilcox, and the fees and
disbursements of Warburg's legal counsel, Willkie Fart & Gallagher, in each
case, incurred in connection with the negotiation, execution and delivery of
this Agreement, the Securities Purchase Agreements, the Restated Certificate,
the Shareholders' Agreement, the RPI Preemptive Rights Termination Agreement and
the employment agreements with Skevington and Joseph Trino and the closing of
the transactions contemplated thereby.

           (b)        The Company will pay, and save Warburg harmless from any
and all liabilities (including interest and penalties) with respect to, or
resulting from any delay or failure in paying, stamp and other taxes (other than
income taxes), if any, which may be payable or determined to be payable on the
execution and delivery of this Agreement or acquisition of Warburg's capital
stock pursuant to this Agreement.

           10.3       Reproduction of Documents.

           This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by Warburg pursuant hereto (except for
certificates evidencing the Voting Common Stock, the Nonvoting Common Stock, the
Series B Preferred Stock and the Series C Preferred Stock) and (c) financial
statements, certificates and other information previously or hereafter furnished
to Warburg, may be reproduced by Warburg by any photographic, photostatic,
microfilm, microcard, miniature photographic or other similar process and
Warburg may destroy any original document so reproduced. The parties hereto
agree and stipulate that any such reproduction shall be admissible in evidence
as the original itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such reproduction was made
by Warburg in the regular course of business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.

           10.4       Successors and Assigns.

           This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. Except to the extent
otherwise provided for herein, neither this Agreement nor the rights of the
parties hereunder may be assigned without the written consent of the
nonassigning party.

           10.5       Entire Agreement; Amendment and Waiver.

           This Agreement constitutes the entire understanding of the parties
hereto and supersedes all prior term sheets, letters of intent, agreements or
understandings among such parties relating to the subject matter hereof. This
Agreement may be amended, and the observance of any term of this Agreement may
be waived, with (and only with) the written consent of the Company and Warburg.

                                      -31-
<PAGE>   33

           10.6       Counterparts.

           This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, and such
counterparts together shall constitute only one instrument.

                                      -32-
<PAGE>   34

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

                           FACTORY AUTOMATION & COMPUTER
                             TECHNOLOGIES, INC.

                           By: /s/ Craig Skevington
                              --------------------------------------------------
                              Name: Craig Skevington
                              Title: CEO

                           WARBURG, PINCUS INVESTORS, L.P.

                           By:      Warburg, Pincus & Co., its General Partner

                           By: /s/ Henry Kressel
                              --------------------------------------------------
                              Henry Kressel
                              Managing Director

                            /s/ Craig Skevington
                           -----------------------------------------------------
                           Craig Skevington<PAGE>   1

                                                                     EXHIBIT 4.3

===============================================================================

                       PREFERRED STOCK PURCHASE AGREEMENT

-------------------------------------------------------------------------------

                                 SYNQUEST, INC.

                                     Sale of
                      Series G Convertible Preferred Stock

                                  March 3, 1999
================================================================================

<PAGE>   2

                                TABLE OF CONTENTS

<TABLE>
<S>               <C>                                                                                             <C>
SECTION 1.        AUTHORIZATION OF CAPITAL STOCK..................................................................1

SECTION 2.        PURCHASE AND SALE OF STOCK......................................................................1

SECTION 3.        REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................................2

       3.1      Organization......................................................................................2

       3.2      Subsidiaries......................................................................................2

       3.3      Capital Stock.....................................................................................2

       3.4      Authorization.....................................................................................2

       3.5      Valid Issuance....................................................................................3

       3.6      No Consents Required; No Violation of Laws........................................................3

       3.7      Qualification To Do Business......................................................................4

       3.8      Absence of Defaults, Conflicts, etc...............................................................4

       3.9      Financial Statements, Material Liabilities........................................................4

       3.10     Absence of Certain Developments...................................................................4

       3.11     Compliance with Law...............................................................................5

       3.12     Pending Actions...................................................................................5

       3.13     Tax Matters.......................................................................................5

       3.14     Employees.........................................................................................5

       3.15     Employee Benefit Plans............................................................................6

       3.16     Copyrights, Trademarks, Licenses, etc.............................................................6

       3.17     Title to Tangible Assets..........................................................................7

       3.18     Insurance.........................................................................................7

       3.19     Transactions with Related Parties.................................................................7

       3.20     Interest in Competitors...........................................................................7
</TABLE>

                                        i
<PAGE>   3

<TABLE>
       <S>        <C>                                                                                             <C>
       3.21       Registration Rights.............................................................................7

       3.22       Disclosure......................................................................................7

SECTION 4.        REPRESENTATIONS AND WARRANTIES OF PURCHASERS....................................................7

       4.1        Authorization...................................................................................8

       4.2        Investment for Own Account......................................................................8

       4.3        Offering Exemption..............................................................................8

       4.4        Knowledge and Experience; Ability to Bear Economic Risks........................................8

       4.5        Limitations on Disposition......................................................................8

       4.6        Brokers, Finders................................................................................9

       4.7        Residence.......................................................................................9

       4.8        Representations and Warranties as of Closing Date...............................................9

SECTION 5.        PURCHASERS' CLOSING CONDITIONS..................................................................9

       5.1        Representations and Warranties..................................................................9

       5.2        Compliance with Agreement.......................................................................9

       5.3        Officer's Certificates..........................................................................9

       5.4        Certificate of Designation; Shareholder Action.................................................10

       5.5        Shareholders' Agreement........................................................................10

       5.6        Legal Opinion..................................................................................10

       5.7        Approval of Proceedings........................................................................10

       5.8        Injunction.....................................................................................10

       5.9        Legal Investment...............................................................................10

SECTION 6.        COMPANY'S CLOSING CONDITIONS...................................................................10

       6.1        Representations and Warranties.................................................................10

       6.2        Compliance with Agreement......................................................................11
</TABLE>

                                       ii
<PAGE>   4

<TABLE>
       <S>        <C>                                                                                            <C>
       6.3        Shareholders' Agreement.........................................................................11

       6.4        Approval of Proceedings........................................................................11

       6.5        Injunction.....................................................................................11

       6.6        Legal Investment...............................................................................11

SECTION 7.        REGISTRATION RIGHTS............................................................................11

       7.1        Definitions.:..................................................................................11

       7.2        Requested Registration.........................................................................12

       7.3        Piggyback Registration.........................................................................13

       7.4        Request for Registration on Form S-3...........................................................14

       7.5        Expenses of Registration.......................................................................15

       7.6        Registration Procedures........................................................................15

       7.7        Indemnification................................................................................15

       7.8        Information by the Holders.....................................................................17

       7.9        Rule 144 Reporting.............................................................................17

       7.10       "Market Stand-Off" Agreement...................................................................18

       7.11       Limitation of Registration Rights..............................................................18

       7.12       Company Delay Rights...........................................................................18

       7.13       Assignability..................................................................................19

SECTION 8.        COVENANTS......................................................................................19

       8.1        Financial and Business Information.:...........................................................19

       8.2        Confidentiality................................................................................20

       8.3        Resale of Securities...........................................................................20

       8.4        Further Assurances.............................................................................21

SECTION 9.        INTERPRETATION OF THIS AGREEMENT...............................................................21
</TABLE>

                                      iii
<PAGE>   5

<TABLE>
<S>               <C>                                                                                            <C>
       9.1      Defined Terms....................................................................................21

       9.2      Directly or Indirectly...........................................................................21

       9.3      Governing Law....................................................................................22

       9.4      Section Headings.................................................................................22

SECTION 10.     MISCELLANEOUS....................................................................................22

      10.1      Notices..........................................................................................22

      10.2      Expenses.........................................................................................22

      10.3      Reproduction of Documents........................................................................23

      10.4      Successors and Assigns...........................................................................23

      10.5      Entire Agreement; Disclosure Schedules; Amendment and Waiver.....................................23

      10.6      Counterparts.....................................................................................23

      10.7      Survival.........................................................................................23
</TABLE>

                                    EXHIBITS
                                    --------

A   - Form of Escrow Agreement

B   - Form of Certification of Designation

C   - Articles of Incorporation

C2  - Form of Amended and Restated Articles of Incorporation

D   - By-laws

E   - Form of Shareholders' Agreement

F   - Form of Legal Opinion

                                    iv
<PAGE>   6

                                    SCHEDULES
                                    ---------

2.1      List of Purchasers
3.3      Capital Stock
3.6      Consents
3.7      Qualification to do Business
3.13     Tax Matters
3.14     Employment Agreements
3.15     Benefit Plans/Benefit Arrangements
3.16     Copyrights, Trademarks, Licenses
3.17     Tangible Assets
3.18     Insurance
3.19     Related Parties Transactions
3.21     Registration Rights
4.7      Purchaser's Residence
10.1     Notice

                                       v
<PAGE>   7

                       PREFERRED STOCK PURCHASE AGREEMENT

         This Agreement is made and entered into as of this 3rd day of March,
1999, by and between SynQuest, Inc., a Georgia corporation (the "Company"), and
those individuals and entities listed on Schedule I attached hereto
("Purchasers"). Certain capitalized terms used in this Agreement are defined in
Section 9.

         In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereby agree as follows:

SECTION 1. AUTHORIZATION OF CAPITAL STOCK.

         The Company's Board of Directors has authorized the filing of a
Certificate of Designation, Preferences and Rights of Series G Preferred Stock
(the "Certificate of Designation") in the form of Exhibit A attached hereto,
creating a new series of preferred stock consisting of 5,636,071 shares of
Series G Preferred Stock, par value $.01 per share (the "Series G Preferred
Stock"). The terms, limitations and relative rights and preferences of the
Series G Preferred Stock are set forth in the Certificate of Designation.

SECTION 2. PURCHASE AND SALE OF STOCK.

         2.1      Series G Preferred Stock. Subject to the terms and conditions
set forth in this Agreement and in reliance upon the representations set forth
below, on the Closing Date (as defined below) the Company will sell to
Purchasers, and Purchasers will purchase from the Company at a purchase price
equal to $6.21 per share, up to 5,636,071 shares of Series G Preferred Stock for
an aggregate purchase price of up to $35,000,000. Such sale and purchase shall
be effected on the Closing Date by the Company executing and delivering to
Purchasers, duly registered in Purchasers' name, duly executed stock
certificates evidencing the Series G Preferred Stock to be purchased under this
Agreement, against delivery by Purchasers to the Company of (a) that certain
$5,000,000 promissory note made by the Company in favor of Warburg, Pincus
Investors, L.P., a Delaware limited partnership, which note shall be canceled
and deemed paid in full, and (b) an aggregate of up to $30,000,000 payable by
Purchasers. Each Purchaser will purchase the number of shares of Series G
Preferred Stock set forth on Schedule 2.1 beside such Purchaser's name. Each
Purchaser agrees to pay the amount set forth on Schedule 2.1 beside such
Purchaser's name by wire transfer payable to the order of the Nationsbank as
escrow agent pursuant to an Escrow Agreement in the form of Exhibit A attached
to this Agreement, for the benefit of the Company.

         2.2      Closing. The closing of the sale and purchase referred to in
Section 2.1 (the "Closing") shall take place at 10:00 A.M., Eastern Standard
time, on March 1, 1999, or such other date as Purchasers and the Company may
mutually agree in writing (the "Closing Date"), at the offices of King &
Spalding, 191 Peachtree Street, Atlanta, Georgia 30303, or such other location
as Purchasers and the Company shall mutually select.

<PAGE>   8

SECTION 3.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company represents and warrants to Purchasers that:

         3.1      Organization. The Company is a corporation validly existing
under the laws of the State of Georgia. Attached hereto as Exhibits C and D are
true and complete copies of the Articles of Incorporation (the "Articles of
Incorporation") and Bylaws (the "Bylaws") of the Company, respectively, each as
amended through the date hereof. The Company has all requisite corporate power
and authority and has all necessary governmental approvals, licenses, permits
and authorizations to own its properties and to carry on its business as now
conducted, except where the failure to have any such approval, license, permit
or authorization could not reasonably be expected to have a material adverse
effect on the business or financial position of the Company.

         3.2      Subsidiaries. The Company does not own, directly or
indirectly, any capital stock or other equity securities of any corporation nor
does it have any direct or indirect ownership interest in any business. The
Company is not a participant in any joint venture or partnership.

         3.3      Capital Stock.

         (a)      On the date hereof, the authorized and outstanding capital
stock of the Company is as set forth on Schedule 3.3. On the Closing Date, after
giving effect to the transactions contemplated hereby the authorized and
outstanding capital stock of the Company will be as set forth on Schedule 3.3.

         (b)      Pursuant to the Company's Stock Option Plan, as amended
through the date of this Agreement (the "Stock Option Plan"), there are
4,205,130 shares of the common stock of the Company (the "Common Stock")
reserved for issuance upon the exercise of stock options. As of the date of this
Agreement, there are outstanding stock options to purchase an aggregate of
3,911,230 shares of Common Stock.

         (c)      Schedule 3.3 sets forth a complete list of the holders of the
Company's outstanding capital stock and warrants to purchase capital stock as of
the date of the Agreement and prior to the transactions contemplated by this
Agreement.

         3.4      Authorization.

                  (a)      The Board of Directors of the Company has authorized
the execution, delivery and performance of this Agreement, the Shareholders'
Agreement (as defined herein), and each of the transactions contemplated hereby
and thereby, including the execution and filing of the Certificate of
Designation and the issuance and delivery of the shares of Series G Preferred
Stock in accordance with this Agreement. Except for the action by the Board of
Directors described in the preceding sentence and the shareholder action
contemplated by Section 5.4, no other corporate action is necessary to authorize
the performance by the Company of its obligations under this Agreement or under
the Shareholders' Agreement.

                                       2
<PAGE>   9
                  (b)      This Agreement and the Shareholders' Agreement each
constitute the valid and binding obligation of the Company, enforceable against
the Company in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights; and (ii) general
principles of equity that restrict the availability of equitable remedies.

         3.5      Valid Issuance.

                  (a)      All outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth on Schedule 3.3 hereto or as contemplated by
this Agreement, the Articles of Incorporation of the Company, as amended, the
Certificate of Designation and the Shareholders' Agreement, there are no shares
of capital stock issuable upon conversion of any security of the Company nor are
there any rights, options or warrants outstanding or other agreements to acquire
shares of capital stock nor is the Company contractually obligated to purchase,
redeem or otherwise acquire any of its outstanding shares of capital stock.
Except as contemplated in this Agreement or in the Shareholders' Agreement, no
shareholder of the Company (other than Warburg, Pincus Investors, L.P. or Paul
Bender) is entitled to any preemptive rights, rights of first refusal, or
redemption rights.

                  (b)      Upon issuance, sale and delivery of the Series G
Preferred Stock as contemplated by this Agreement, the shares of Series G
Preferred Stock to be sold to Purchasers under this Agreement will be duly
authorized, validly issued, fully paid and nonassessable and will be free of
preemptive rights.

                  (c)      Upon their issuance in accordance with the
Certificate of Designation, the shares of Common Stock issuable upon conversion
of the Series G Preferred Stock will be duly authorized, validly issued, fully
paid and nonassessable and will be free of preemptive rights.

         3.6      No Consents Required; No Violation of Laws. Except as set
forth on Schedule 3.6, the nature of the business that the Company conducts, any
relationship between the Company and any other Person, and the creation,
authorization, issuance, offer or sale of the Series G Preferred Stock as
contemplated by this Agreement do not require a consent, approval or
authorization of, or filing, registration or qualification with, any Person or
any governmental authority on the part of the Company, except for state and
Federal securities law filings. No vote, consent or approval of the holders of
any security of the Company is required as a condition to the execution and
delivery of this Agreement or the authorization, issuance, offer and sale of the
Series G Preferred Stock under this Agreement, except for the consent of the
holders of a majority of the outstanding shares of (i) capital stock of the
Company, (ii) each class of capital stock of the Company entitled to vote as a
separate voting group on the transactions contemplated by this Agreement.

                                       3
<PAGE>   10

         3.7      Qualification To Do Business. The Company is qualified to do
business as a foreign corporation in each jurisdiction listed on Schedule 3.7,
and such jurisdictions constitute the only jurisdictions in which the conduct of
the Company's business or the nature of the property owned or leased by it
require it to qualify to do business as a foreign corporation, except where the
failure to so qualify would not have a material adverse effect on the business
or financial position of the Company.

         3.8      Absence of Defaults, Conflicts, etc. The execution and
delivery of this Agreement, and the Shareholders' Agreement, the authorization,
issuance, offer and sale of the Series G Preferred Stock contemplated by this
Agreement, the adoption by the Company of the Certificate of Designation and the
fulfillment of the terms of such documents by the Company will not (A) result in
a breach of any of the terms, conditions or provisions of, or constitute a
default under, or permit the acceleration of rights under or termination of, any
indenture, mortgage, deed of trust, credit agreement, note or other evidence of
indebtedness, or other agreement of the Company, or (B) violate the Articles of
Incorporation or Bylaws of the Company, or any rule or regulation of any court
or Federal or state or other regulatory board or body or administrative agency
having jurisdiction over the Company or over its properties or businesses. No
event has occurred and no condition exists which, upon notice or the passage of
time, or both, would constitute a default under any such agreements and
instruments or in any license, permit or authorization to which the Company is a
party or by which it may be bound.

         3.9      Financial Statements, Material Liabilities.

                  (a)      The Company has previously delivered to Purchasers a
private placement memorandum containing certain financial statements of the
Company (the "Financial Statements"). Such Financial Statements, including the
notes thereto, have been prepared from the books and records of the Company and
present fairly the financial position and the results of operations and cash
flows of the Company as at and for the periods indicated, in each case in
conformity with generally accepted accounting principles ("GAAP") consistently
applied.

                  (b)      Except as set forth in the Financial Statements the
Company has no material liabilities or obligations, absolute or contingent,
except (i) obligations and liabilities incurred in the ordinary course of
business since the respective dates of such statements, none of which is
material, or (ii) obligations which are not required by GAAP to be reflected in
the Financial Statements or such interim statements.

         3.10     Absence of Certain Developments. Since December 31, 1998,
there has been no (i) material adverse change in the condition, financial or
otherwise, of the Company or in its assets, liabilities, properties or business,
taken as a whole, (ii) declaration, setting aside or payment of any dividend or
other distribution with respect to the capital stock of the Company or
redemption of any share of capital stock of the Company, (iii) material loss,
destruction or damage to any property of the Company, whether or not insured,
(iv) acceleration or prepayment of any indebtedness for a material amount of
borrowed money or the refunding of any such indebtedness, (v) labor trouble
involving the Company or any material change in its personnel or the terms and
conditions of employment, (vi) waiver of any valuable right which could

                                       4
<PAGE>   11

reasonably be expected to have a material adverse effect on the business or
financial position of the Company, (vii) material loan or extension of credit by
the Company to any officer or employee of the Company (other than reasonable
travel advances) or (viii) acquisition or disposition of any material assets (or
any contract or arrangement therefor) otherwise than for fair value in the
ordinary course of business, or any other transaction by the Company otherwise
than for fair value in the ordinary course of business.

         3.11     Compliance with Law. The Company has not been notified of any
violation of any laws, ordinances, governmental rules or regulations to which it
is subject, including without limitation laws or regulations relating to the
environment or to occupational health and safety, and to its knowledge no
material expenditures are or will be required in order to cause its current
operations or properties to comply with any such law, ordinances, governmental
rules or regulations.

         3.12     Pending Actions. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company threatened, against the
Company or any of its properties or assets by or before any court, arbitrator or
governmental authority which questions the validity of this Agreement, the
Shareholders' Agreement, the Certificate of Designation, or any action taken or
to be taken pursuant hereto or thereto, or which could reasonably be expected to
have a material adverse effect on the business or financial position of the
Company, and the Company is not in default with respect to any judgment, order,
writ, injunction, decree or award applicable to it or its business or
properties.

         3.13     Tax Matters. The Company has completed and duly filed all
Federal, state, county and local tax returns required to have been filed by it
and all taxes which are shown on such returns have been paid (other than taxes
contested in good faith by appropriate proceeding). There are in effect no
waivers of applicable statutes of limitations with respect to taxes for any
year. No tax returns have been audited by taxing authorities except as set forth
on Schedule 3.13.

         3.14     Employees. Except as reflected on Schedule 3.14, the Company
does not have any employment contract with any of its employees (other than
employment agreements terminable by the Company without premium or penalty on
notice of 30 days or less), or any collective bargaining agreements covering any
of its employees, nor has the Company been subject to any labor organization
activity. There are no material controversies or labor troubles pending or, to
the knowledge of the Company threatened, between the Company and any of its
employees. The Company has complied with all applicable federal and state laws
and regulations respecting employment and employment practices, terms and
conditions of employment, wages and hours and other laws related to employment.
No key employee or consultant of the Company has within the prior three months
given any written notice to the Company that he or she intends to leave the
employ of the Company and, during such period, no such employee or consultant
has been terminated.

         3.15     Employee Benefit Plans. All employee benefit plans (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974
("ERISA")) covering former and current employees of the Company, or under which
the Company has any obligation or liability

                                       5
<PAGE>   12

(each, a "Benefit Plan") are listed on Schedule 3.15. The Benefit Plans are and
have been administered in substantial compliance with their terms and with the
requirements prescribed by ERISA (to the extent that ERISA applies) and the
applicable provisions of the Internal Revenue Code. The Company has not incurred
any liability under Title IV of ERISA, including any liability to the Pension
Benefit Guaranty Corporation. No Benefit Plan has engaged in a transaction which
would subject the Company to a material tax, penalty or liability under the Code
or ERISA. There is no litigation pending or, to the Company's knowledge,
threatened with respect to any Benefit Plan. Schedule 3.15 lists all plans,
contracts, bonuses, commissions, profit-sharing, savings, stock options,
insurance, deferred compensation, or other similar fringe or employee benefits
covering former or current employees of the Company or under which the Company
has any obligation or liability (each, a "Benefit Arrangement"). The Benefit
Arrangements are and have been administered in substantial compliance with their
terms and with the requirements of applicable law.

         3.16     Copyrights, Trademarks, Licenses, etc. The Company owns, free
and clear of all encumbrances, restrictions, liens, security interests and
charges, and has good and marketable title to, or holds adequate licenses or
otherwise possesses all such rights (or such rights are in the public domain) as
are necessary to use all patents (and applications therefor), patent
disclosures, trademarks, service marks, trade names, copyrights (and
applications therefor), inventions, discoveries, processes, know-how,
scientific, technical, engineering and marketing data, software code, formulae
and techniques used or proposed to be used, in or necessary for the conduct of
its business as now conducted or as proposed to be conducted, except as set
forth on Schedule 3.16 and except where the failure to have such rights would
not have a material adverse effect on the business or financial position of the
Company. Schedule 3.16 lists all issued patents, registered copyrights,
registered trademarks, or registered trade names.

         The Company has not received written notice of any conflict or alleged
conflict with the rights of others pertaining to the tangible and intangible
assets described in this Section 3.16. To the Company's knowledge, the Company's
business, as presently conducted, does not infringe upon or violate any
intellectual property rights or trade secrets of others. To the Company's
knowledge, the Company has the right to use, free and clear of any rights or
claims of others, all intellectual property and trade secrets, processes,
customer lists and other rights to the extent reasonably necessary for the
conduct of the Company's business as presently conducted.

         The Company is not currently obligated or under any existing liability
to make royalty or other payments to any owner of, licensor of, or other
claimant to, any patent, trademark, service name, trade name, copyright, or
other intangible asset, with respect to the use thereof or in connection with
the conduct of its business as now conducted, except where the failure to make
any such payments would not have a material adverse effect on the business or
financial position of the Company. To the Company's knowledge, no employee of
the Company is subject to any employment agreement or proprietary information
agreement which he or she had with a previous employer or any intellectual
property policy of such employer, which affects the rights of the Company to use
the technologies, patents, trademarks, trade secrets, service names, trade
names, copyrights, licenses and the like currently employed by the Company, or
is a party to or

                                       6
<PAGE>   13

threatened by any litigation concerning any patents, trademarks, trade secrets,
service names, trade names, copyrights, licenses and the like.

         3.17     Title to Tangible Assets. Except as set forth on Schedule
3.17, the Company has good title to its tangible properties and assets and good
title to all its leasehold estates, in each case subject to no mortgage, pledge,
lien, lease, encumbrance or charge, other than, or resulting from, taxes which
have not yet become delinquent and minor liens and encumbrances which do not in
any case materially detract from the value of the property subject thereto or
materially impair the operations of the Company.

         3.18     Insurance. Schedule 3.18 sets forth a true and complete
listing of the insurance policies of the Company as in effect on the date of
this Agreement. No notice of any termination or threatened termination of any of
such policies has been received by the Company and such policies are in full
force and effect.

         3.19     Transactions with Related Parties. Except as disclosed on
Schedule 3.19, the Company is not a party to any agreement in excess of $20,000
with any of its officers, shareholders or directors or any Affiliate of any of
the foregoing under which it: (i) leases any real or personal property (either
to or from such person), (ii) has incurred any debt for borrowed money or under
which it has lent money (other than routine travel advances), (iii) licenses
technology (either to or from such person), (iv) is obligated to purchase any
tangible or intangible asset from or sell such asset to such person, or (v)
purchases products or services from such person (other than pursuant to
employment agreements described in Schedule 3.14).

         3.20     Interest in Competitors. Neither the Company nor to its
knowledge any of its officers, has any interest, either by way of contract or by
way of investment (other than as holder of not more than 5% of the outstanding
capital stock of a publicly traded Person) or otherwise, directly or indirectly,
in any Person other than the Company that (i) provides any services or designs,
produces or sells any product or product lines or engages in any activity
similar to or competitive with any activity currently conducted or proposed to
be conducted by the Company or (ii) has any direct or indirect interest in any
asset or property, real or personal, tangible or intangible, of the Company.

         3.21     Registration Rights. Except as set forth in this Agreement or
on Schedule 3.21, the Company is not under any obligation to register any of its
securities under the Act.

         3.22     Disclosure. The confidential private placement memorandum of
the Company dated January 19, 1999, as amended and supplemented, does not
contain an untrue statement of a material fact or omit a material fact necessary
to make the statements contained therein not misleading.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF PURCHASERS.

         Each Purchaser represents and warrants, severally and jointly, to the
Company that:

                                       7
<PAGE>   14

         4.1      Authorization. This Agreement constitutes the valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance
with its terms. The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action on the part of Purchaser and all
consents of any third parties that may be required to be obtained by Purchaser
for the consummation of the transactions contemplated by this Agreement have
been obtained.

         4.2      Investment for Own Account. Purchaser is acquiring the Series
G Preferred Stock purchased under this Agreement (and will acquire the Common
Stock upon conversion of the Series G Preferred Stock) for its own account for
investment and not with a view towards the resale, transfer or distribution
thereof. Such Purchaser has no present intention of distributing such Series G
Preferred Stock (or the shares of the Common Stock acquired upon conversion of
the Series G Preferred Stock). No other Person has any right with respect to or
interest in the Series G Preferred Stock to be purchased by Purchaser, nor has
Purchaser agreed to give any Person any such interest or right in the future.

         4.3      Offering Exemption. Purchaser understands that the shares of
the Series G Preferred Stock being purchased under this Agreement have not been
registered under the Act, nor qualified under any state securities laws, and
that the shares of Series G Preferred Stock are being offered and sold pursuant
to an exemption from such registration and qualification based in part upon the
representations of such Purchaser contained herein.

         4.4      Knowledge and Experience; Ability to Bear Economic Risks.
Purchaser has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of the investment
contemplated by this Agreement, and Purchaser is able to bear the economic risk
of its investment in the Company (including a complete loss of its investment).
Purchaser represents that it is an accredited investor within the meaning of
Regulation D under the Act. Purchaser represents that it has had an opportunity
to discuss the Company's business management and financial affairs with
directors, officers and management of the Company. Purchaser has also had the
opportunity to ask questions of, and receive answers from, the Company and its
management regarding the terms and conditions of this investment.

         4.5      Limitations on Disposition. Purchaser recognizes that no
public market exists for the Series G Preferred Stock to be sold hereunder, and
no representation has been made to Purchaser that any such public market will
exist in the future. Purchaser understands that it must bear the economic risk
of this investment indefinitely unless the Series G Preferred Stock (or the
Common Stock issuable upon conversion thereof) is registered pursuant to the Act
or an exemption from such registration is available, and unless the disposition
of the Series G Preferred Stock (or the Common Stock issuable upon conversion
thereof) is qualified under applicable state securities laws or an exemption
from such qualification is available, and that, except as provided in this
Agreement, the Company has no obligation or present intention of so registering
the Series G Preferred Stock (or the Common Stock issuable upon conversion
thereof). Purchaser understands that there is no assurance that any exemption
from the Act will be available, or, if available, that such exemption will allow
it to dispose of or otherwise transfer any or all of the Series G Preferred
Stock or the Common Stock issuable on conversion of the

                                       8
<PAGE>   15

Series G Preferred Stock in the amounts or at the times Purchaser might desire.
Purchaser understands that at the present time Rule 144 promulgated under the
Act by the Securities and Exchange Commission ("Rule 144") is not applicable to
sales of the shares of Series G Preferred Stock because such shares are not
registered under Section 12 of the Securities Exchange Act of 1934 (the
"Exchange Act"), and there is not publicly available the information concerning
the Company specified in Rule 144. Purchaser acknowledges that the Company is
not presently under any obligation to register under Section 12 of the Exchange
Act or to make publicly available the information specified in Rule 144 and that
except as provided herein, is not otherwise required to do so.

         4.6      Brokers, Finders. The transactions contemplated hereby were
not submitted to Purchaser by any broker or other person entitled to a
commission, a finder's fee or like payment thereon and were not with Purchaser's
authority submitted to the Company by any broker or other person, and
Purchaser's action has not given rise to any valid claim by any person against
Purchaser or the Company for a commission, finder's fee or like payment.

         4.7      Residence. If Purchaser is an individual, then the Purchaser
resides in the state or province identified in the address of Purchaser set
forth on Schedule 4.7. If Purchaser is a partnership, corporation, limited
liability company or other entity, then the office or offices of Purchaser in
which its investment decision was made is located at the address or addresses of
Purchaser set forth on Schedule 4.7.

         4.8      Representations and Warranties as of Closing Date. The
representations and warranties contained in Sections 4.1 through 4.7 will be
true and correct on and as of the Closing Date in all material respects as
though such representations and warranties were made at and as of such date.

SECTION 5. PURCHASERS' CLOSING CONDITIONS.

         The obligation of Purchasers to purchase the Series G Preferred Stock
to be sold pursuant to this Agreement on the Closing Date is subject to the
following conditions:

         5.1      Representations and Warranties. The representations and
warranties of the Company contained in this Agreement shall be true on and as of
the Closing Date in all material respects as though such representations and
warranties were made at and as of such date, except as otherwise affected by the
transactions contemplated hereby.

         5.2      Compliance with Agreement. The Company shall have performed
and complied in all material respects with all agreements, covenants and
conditions contained in this Agreement which are required to be performed or
complied with by the Company prior to or on the Closing Date.

         5.3      Officer's Certificates. Purchasers shall have received a
certificate, dated the Closing Date, signed by an executive officer of the
Company on behalf of the Company,

                                       9
<PAGE>   16

certifying that with respect to the Company, the conditions specified in
Sections 5.1 and 5.2 of this Agreement have been fulfilled.

         5.4      Certificate of Designation; Shareholder Action.

                  (a)      The Certificate of Designation shall have been filed
with the Secretary of State of the State of Georgia and shall be duly authorized
and effective under Georgia law.

                  (b)      All other action required to be taken by the
Company's shareholders in connection with the transactions contemplated by this
Agreement shall have been duly taken by such holders.

         5.5      Shareholders' Agreement. The Company and the Purchasers shall
have entered into a Shareholders' Agreement in the form of Exhibit E attached
hereto (the "Shareholders' Agreement").

         5.6      Legal Opinion. King & Spalding, counsel to the Company, shall
have delivered an opinion letter in the form of Exhibit F attached hereto.

         5.7      Approval of Proceedings. All proceedings to be taken in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to Purchasers and their special counsel,
Hunton & Williams, and Purchasers shall have received copies of all documents or
other evidence which it and Hunton & Williams may reasonably request in
connection with such transactions.

         5.8      Injunction. There shall be no effective injunction, writ,
preliminary restraining order or any order of any nature issued by a court of
competent jurisdiction directing that the transactions provided for herein or
any of them not be consummated as herein provided.

         5.9      Legal Investment. On the Closing Date, the sale and issuance
of the shares of Series G Preferred Stock and the issuance of the shares of
Common Stock upon conversion thereof shall be legally permitted by all laws and
regulations to which Purchasers and the Company are subject.

SECTION 6. COMPANY'S CLOSING CONDITIONS.

         The obligation of the Company to sell the Series G Preferred Stock to
be sold pursuant to this Agreement on the Closing Date is subject to the
following conditions:

         6.1      Representations and Warranties. The representations and
warranties of Purchasers contained in this Agreement shall be true on and as of
the Closing Date in all material respects as though such representations and
warranties were made at and as of such date, except as otherwise affected by the
transactions contemplated hereby.

                                       10
<PAGE>   17

         6.2      Compliance with Agreement. Purchasers shall have performed and
complied in all material respects with all agreements, covenants and conditions
contained in this Agreement which are required to be performed or complied with
by Purchasers prior to or on the Closing Date.

         6.3      Shareholders' Agreement. The Company and Purchasers shall have
entered into the Shareholders' Agreement.

         6.4      Approval of Proceedings. All proceedings to be taken in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Company and its counsel, King &
Spalding, and the Company shall have received copies of all documents or other
evidence which the Company and its counsel may reasonably request in connection
with such transactions.

         6.5      Injunction. There shall be no effective injunction, writ,
preliminary restraining order or any order of any nature issued by a court of
competent jurisdiction directing that the transactions provided for herein or
any of them not be consummated as herein provided.

         6.6      Legal Investment. On the Closing Date, the sale and issuance
of the shares of Series G Preferred Stock and the issuance of the shares of
Common Stock upon conversion thereof shall be legally permitted by all laws and
regulations to which Purchasers and the company are subject.

SECTION 7. REGISTRATION RIGHTS.

         7.1      Definitions. As used in this Section 7:

                  (a)      the terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Act (and any post-effective amendments filed or
required to be filed) and the declaration or ordering of effectiveness of such
registration statement;

                  (b)      "Registrable Securities" means shares of Common Stock
issuable upon conversion of Series G Preferred Stock;

                  (c)      "Holder" means any holder of Registrable Securities;

                  (d)      "Initiating Holders" means, as long as 50% or more of
the shares of Series G Preferred Stock or Registrable Securities sold on the
Closing Date are outstanding, the holders of 50% or more of the Series G
Preferred Stock or Common Stock issuable upon conversion of the Series G
Preferred Stock;

                  (e)      "Commission" means the Securities and Exchange
Commission or any other Federal agency at the time administering the Act;

                                       11
<PAGE>   18

                  (f)      "Registration Expenses" means all expenses incurred
by the Company in compliance with Sections 7.2 and 7.3 of this Agreement,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company, blue sky fees and
expenses, and the expense of any special audits incident to or required by any
such registration (but excluding the compensation of regular employees of the
Company, which compensation shall be paid in any event by the Company); and

                  (g)      "Selling Expenses" means all underwriting discounts
and selling commissions applicable to the sale of Registrable Securities and all
fees and disbursements of counsel for each of the Holders.

         7.2      Requested Registration.

                  (a)      Request for Registration. If the Company shall
receive from the Initiating Holders, at any time after the earlier of (I) two
years from the Closing Date, and (II) six months after the closing of the
Company's initial public offering, a written request that the Company effect a
registration under the Act of all or part of such Initiating Holders'
Registrable Securities, the Company shall:

                           (i)      promptly give written notice of the proposed
registration, to all other Holders of Registrable Securities; and

                           (ii)     as soon as practicable, use commercially
reasonable efforts to effect registration under the Act (including, without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Act) as may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as specified in a
written request received by the Company within ten business days after written
notice from the Company is given under clause (i) above;

provided, however, that the Company will not be obligated to effect or take any
action to effect, (i) more than two registrations pursuant to this Section 7.2,
(ii) any registration covering the public sale of Common Stock having an
aggregate public offering price of less than $10,000,000, or (iii) any
registration pursuant to this Section 7.2 in any particular jurisdiction in
which the Company would be required to execute a general consent to service of
process in effecting such registration, qualification or compliance, unless the
Company is already subject to such jurisdiction and except as may be required by
the Act or applicable rules or regulations thereunder.

         The registration statement filed pursuant to the request of the
Initiating Holders may, subject to the provisions of Section 7.2(b) below,
include other securities of the Company which are held by officers or directors
of the Company, or which are held by persons who, by virtue of

                                       12
<PAGE>   19

agreements with the Company, are entitled to include their securities in any
such registration, but the Company shall have no absolute right to include any
of its securities in any such registration.

                  (b)      Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of the request made
pursuant to Section 7.2(a).

                  If officers or directors of the Company holding other
securities of the Company shall request inclusion in any registration pursuant
to Section 7.2, or if holders of securities of the Company other than
Registrable Securities who are entitled, by contract with the Company or
otherwise, to have securities included in such a registration (the "Other
Shareholders") request such inclusion, the Company shall offer to include the
securities of such officers, directors and Other Shareholders in the
underwriting and may condition such offer on their acceptance of the further
applicable provisions of this Section 7. The Company and the Initiating Holders
shall (together with all officers, directors and Other Shareholders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter(s) selected by the
Company. Notwithstanding any other provision of this Section 7.2, if the
managing underwriter(s) determines that marketing factors require a limitation
on the number of shares to be underwritten, the securities of the Company held
by officers or directors (other than Registrable Securities) of the Company and
the securities held by Other Shareholders shall be excluded from such
registration to the extent so required by such limitation on a pro rata basis.
If, after the exclusion of securities of the Company held by officers or
directors and Other Shareholders, further reductions are still required, the
number of shares included in the registration by each Holder shall be reduced on
a pro rata basis, by such minimum number of shares as is necessary to comply
with such request. No Registrable Securities or any other securities excluded
from the underwriting by reason of the underwriter's marketing limitation shall
be included in such registration. If the underwriter has not limited the number
of Registrable Securities or other securities to be underwritten, the Company
may include shares of securities for its own account in such registration if the
underwriter so agrees and if the number of Registrable Securities and other
securities which would otherwise have been included in such registration and
underwriting will not thereby be limited.

         7.3      Piggyback Registration.

                  (a)      At any time after the initial public offering, (I) if
the Company shall determine to register any securities for its own account that
would have a public offering price of at least one million ($1,000,000) dollars,
or (II) if Warburg, Pincus Investors, L.P., the majority shareholder of the
Company, initiates registration on Form S-3 or any successor form of shares of
Common Stock (other than a registration relating solely to employee benefit
plans, a registration relating solely to a transaction of the type described in
Rule 145 under the Act or any successor to Rule 145, or a registration on any
registration form that does not permit secondary sales or does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities), the Company
will:

                           (i)      promptly give to each Holder a written
notice thereof; and

                                       13
<PAGE>   20

                           (ii)     include in such registration (and any
related qualification under blue sky laws or other compliance) all the
Registrable Securities specified in a written request or requests, made by the
Holders within ten business days after receipt of the written notice from the
Company described in clause (i) above, except as the number of such Registrable
Securities may be limited by Section 7.3(b) below. Such written request may
specify all or a part of the Holders' Registrable Securities.

                  (b)      Underwriting. If the Company or Warburg intend to
distribute the Registrable Securities by means of an underwriting, the Company
shall so advise each of the Holders as a part of the written notice given
pursuant to Section 7.3(a)(i). In such event, the right of each of the Holders
to registration pursuant to this Section 7.3 shall be conditioned upon such
Holders' participation in such underwriting and their acceptance of the further
applicable provisions of this Section 7. The Holders shall (together with the
Company and the Other Shareholders propose to distribute their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter(s) selected by the Company. Notwithstanding any other
provision of this Section 7.3, if the managing underwriter(s) determines that
marketing factors require a limitation on the number of shares to be
underwritten, the Company shall (subject to the allocation priority set forth
below) exclude from such registration and underwriting some or all of the
Registrable Securities which would otherwise be underwritten. The Company shall
so advise all Holders of securities requesting registration, and the number of
securities that are entitled to be included in the registration and underwriting
shall be allocated in the following manner: the securities of the Company held
by officers, directors and Other Shareholders (other than Registrable Securities
and other than securities held by holders who by contractual right demanded such
registration ("Demanding Holders")) shall be excluded from such registration and
underwriting on a pro rata basis to the extent required by such limitation, and,
if a limitation on the number of shares is still required, the number of shares
that may be included in the registration and underwriting by each of the Holders
and Demanding Holders shall be reduced, on a pro rata basis, by such minimum
number of shares as is necessary to comply with such limitation.

         7.4      Request for Registration on Form S-3. If the Company shall
receive from an Initiating Holder, at any time after the Company is eligible to
register its securities on Form S-3 or a successor short form registration
statement, a written request that the Company effect a registration under the
Act of all or part of such Initiating Holder's Registrable Securities, the
Company shall:

                  (a)      promptly give written notice of the proposed
registration, qualification or compliance to all other Holders of Registrable
Securities; and

                  (b)      as soon as practicable, use commercially reasonable
efforts to effect such registration under the Act (including, without
limitation, the execution of an undertaking to file post-effective amendments,
appropriate qualification under applicable blue sky or other state securities
laws and appropriate compliance with applicable regulations issued under the
Act) as may be so requested and as would permit or facilitate the sale and
distribution of all or such

                                       14
<PAGE>   21

portion of such Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities of any Holder or
Holders joining in such request as specified in a written request received by
the Company within ten business days after written notice from the Company is
given under clause (i) above;

provided, however, that the Company shall not be obligated to effect or take any
action to effect more than one registration pursuant to this Section 7.4 in any
12-month period, and provided, further, that the Company will not be obligated
to effect, or take any action to effect, any registration pursuant to this
Section 7.4 in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance, unless the Company is already subject
to such jurisdiction and except as may be required by the Act or applicable
rules or regulations thereunder.

         The registration statement filed pursuant to the request of the
Initiating Holder under this Section 7.4 may include other securities of the
Company which are held by officers or directors of the Company, or which are
held by persons who, by virtue of agreements with the Company, are entitled to
include their securities in any such registration, but the Company shall have no
absolute right to include any of its securities in any such registration.

         7.5      Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
this Section 7 shall be borne by the Company, and all Selling Expenses shall be
borne by the holders of the securities so registered pro rata on the basis of
the number of their shares so registered; provided, however, that the Company
shall not be required to pay any Registration Expenses if, as a result of the
withdrawal of a request for registration by any of the Holders of securities, as
applicable, the registration statement does not become effective, in which case
each of the Holders and Other Shareholders requesting registration shall bear
such Registration Expenses pro rata on the basis of the number of their shares
so included in the registration request, and provided, further, that such
registration shall not be counted as a registration for purposes of Section 7.2
or 7.4.

         7.6      Registration Procedures. In the case of each registration
effected by the Company pursuant to Section 7, the Company will keep the
Holders, as applicable, advised in writing as to the initiation of each
registration and as to the completion thereof and furnish such number of
prospectuses and other documents incident thereto as each of the Holders, as
applicable, from time to time may reasonably request.

         7.7      Indemnification.

                  (a)      The Company will indemnify each of the Holders, each
of the Holders' officers, directors and partners, and each person controlling
each of the Holders, as applicable, with respect to each registration which has
been effected pursuant to this Section 7, and each underwriter, if any, and each
Person who controls any underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any registration statement

                                       15
<PAGE>   22

or prospectus incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein in
light of the circumstances under which they were made not misleading, or any
violation by the Company of the Act or any rule or regulation thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration, qualification or compliance,
and will reimburse each of the Holders, each of the Holders' officers, directors
and partners, and each Person controlling each of the Holders, each such
underwriter and each Person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating and
defending any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company by
any of the Holders or underwriter or Person controlling such Holder or
underwriter specifically for use therein.

                  (b)      Each of the Holders will, if Registrable Securities
held by it are included in the securities as to which such registration,
qualification or compliance is being effected, severally indemnify the Company,
each of the Company's directors and officers and each underwriter, if any, of
the Company's securities covered by such a registration statement, each Person
who controls the Company or such underwriter within the meaning of the Act and
the rules and regulations thereunder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any such registration statement or prospectus made by such Holder, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein in light of the
circumstances under which they were made not misleading by such Holder, and will
reimburse the Company, directors, officers, partners, Persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement or prospectus in reliance upon
and in conformity with written information furnished to the Company by such
Holder specifically for use therein, provided, however, that unless such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
willfully made, the obligation of each of the Holders hereunder shall be limited
to an amount equal to the net proceeds to such Holder of securities sold as
contemplated herein.

                  (c)      Each party entitled to indemnification under this
Section 7.7 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld) and the Indemnified Party
may participate in such defense at such party's expense (unless (i) the
employment of counsel by such Indemnified Party has been authorized by the

                                       16
<PAGE>   23

Indemnifying Party, and (ii) the Indemnified Party shall have reasonably
concluded that there may be a conflict of interest between the Indemnifying
Party and the Indemnified Party in the defense of such action, in each of which
cases the fees and expenses of counsel shall be at the expense of the
Indemnifying Party), and provided, further, that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying Party
of its obligations under this Section 7. No Indemnifying Party, in the defense
of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.

                  (d)      If the indemnification provided for in this Section
7.7 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or expense
referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party thereunder, 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 of the Indemnified Party on the other
in connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates 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.

                  (e)      Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in a negotiated
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall be controlling.

         7.8      Information by the Holders. Each of the Holders shall furnish
to the Company such information regarding such Holder and the distribution
proposed by such Holder as the Company may reasonably request in writing and as
shall be reasonably required in connection with any registration, qualification
or compliance referred to in this Section 7. The Company shall request the same
information from the Other Shareholders that request to be included in a
registration.

         7.9      Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may permit the
sale of restricted securities to the public without registration, the Company
agrees to:

                                       17
<PAGE>   24

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

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

                  (c)      So long as a Purchaser owns any Registrable
Securities, furnish to that Purchaser upon request, a written statement by the
Company as to its compliance with the public information requirements of Rule
144 or any successor to Rule 144 (at any time from and after ninety (90) days
following the effective date of the first registration statement filed by the
Company for an offering of its securities to the general public), and of the Act
and the Exchange Act (at any time after it has become subject to such reporting
requirements), a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed as Purchasers may
reasonably request.

         7.10     "Market Stand-Off" Agreement. Each of the Holders shall agree,
if requested by the Company and the managing underwriter(s), not to sell or
otherwise transfer or dispose of any securities of the Company held by such
Holder during the one hundred eighty (180) day period following the effective
date of a registration statement of the Company for an initial public offering
filed under the Act, provided that all executive officers and directors of the
Company enter into similar agreements.

         The agreement shall be in writing in a form satisfactory to the Company
and such underwriter. The Company may impose stop-transfer instructions with
respect to the securities of the Company subject to the foregoing restriction
until the end of the one hundred eighty (180) day period.

         7.11     Limitation of Registration Rights. Notwithstanding anything to
the contrary contained in this Agreement, the Company shall not be required to
include in any registration statement filed pursuant to Section 7.2 , 7.3 or 7.4
of this Agreement Registrable Securities held by a Holder (i) if the Company
shall have received an opinion of counsel to the effect that the proposed
disposition of such Registrable Securities by such Holder may be effected
without registration under the Act, or (ii) to the extent such Holder's
Registrable Securities can then be sold during a single three month period
pursuant to Rule 144 under the Act, or any successor to Rule 144.

         7.12     Company Delay Rights. Notwithstanding anything to the contrary
contained in this Agreement, the company will not be required to take any of the
actions described in Sections 7.2 or 7.4 of this Agreement with respect to any
Holder that holds Registrable Securities to the extent that (a) the Company is
in possession of material non-public information that it has a bona fide
business purpose for preserving as confidential and that is not then otherwise
required to be disclosed, and (b) it delivers written notice to each Holder that
had given the Company notice

                                       18
<PAGE>   25

that it intended to participate in the registration that the Company intends to
defer the actions so required; provided, however, that the Company may delay
such registration for no more than 90 days during any 12-month period.

         7.13     Assignability. The registration rights granted pursuant to
this Section 7 shall be assignable at the option of each of the Holders, in
whole or in part, to any transferee of record of Registrable Securities provided
that the Company is given written notice by such Holder at the time or within a
reasonable period of time after said transfer, stating the name and address of
such transferee or assignee and identifying the Registrable Securities with
respect to which such registration rights are assigned.

SECTION 8. COVENANTS.

         8.1      Financial and Business Information. From and after the date
hereof, the Company shall deliver to Purchasers so long as Purchasers hold
shares of Series G Preferred:

                  (a)      Quarterly Statements. As soon as reasonably
practicable after the close of each of the first three fiscal quarters of each
fiscal year of the Company, a balance sheet, statement of income and statement
of cash flows of the Company as at the close of such quarter and covering
operations for such quarter, and the portion of the Company's fiscal year ending
on the last day of such month or quarter, all in reasonable detail and prepared
in accordance with generally accepted accounting principles, consistently
applied, subject to audit and year-end adjustments, setting forth in each case
in comparative form the figures for the comparable period of the previous fiscal
year and accompanied by a narrative description of the Company's business and
results of operations for such quarter.

                  (b)      Annual Statements. As soon as practicable after the
end of each fiscal year of the Company, and in any event within 90 days
thereafter, copies of:

                           (1)      consolidated and consolidating balance
                  sheets of the Company and its subsidiaries at the end of such
                  year; and

                           (2)      consolidated statements of income,
                  shareholders' equity and cash flows of the Company and its
                  subsidiaries for such year, setting forth in each case in
                  comparative form the figures for the previous fiscal year, all
                  in reasonable detail and accompanied by an opinion of a firm
                  of independent certified public accountants of recognized
                  national standing selected by the Company stating that such
                  financial statements fairly present the financial position of
                  the Company and its subsidiaries on a consolidated basis, as
                  applicable, and have been prepared in accordance with
                  generally accepted accounting principles consistently applied
                  (except for changes in application in which such accountants
                  concur) and that the examination of such accountants in
                  connection with such financial statements has been made in
                  accordance with generally accepted auditing standards, and
                  accordingly included such tests of the accounting records and
                  such other auditing procedures as were considered necessary in
                  the circumstances.

                                       19
<PAGE>   26

         8.2      Confidentiality.

                  (a)      As much of the information and other material
furnished under or in connection with this Agreement (whether furnished before,
on or after the date hereof, including without limitation, information furnished
pursuant to Section 8.1) as constitutes or contains confidential business,
financial or other information of the Company or its subsidiaries, each
Purchaser covenants for itself, and, as applicable, for its directors, officers,
affiliates and partners, that it will use due care to prevent its officers,
directors, partners, employees, counsel, accountants and other representatives
from disclosing such information to persons other than their respective
authorized employees, counsel, accountants, shareholders, partners, limited
partners and other authorized representatives. Notwithstanding the foregoing, if
Purchasers are advised by such counsel that such disclosure or delivery is
required by law, regulation or judicial or administrative order, then they may
disclose or deliver such information or other after giving written notice to the
Company of such requirements.

                  For purposes of this Section 8.2(a), "due care" means at least
the same level of care that Purchasers would use to protect the confidentiality
of its own sensitive or proprietary information, and this obligation shall
survive termination of this Agreement.

                  (b)      From and after the consummation of an initial public
offering of securities, to the extent that any of the information furnished
pursuant to Section 8.1 hereof would constitute material, nonpublic information
for purposes of the Exchange Act, Purchasers agree not to engage in any purchase
or sale of securities while in possession of such information and prior to the
time that such information is made generally known to the public and Purchasers
agree to use due care to prevent their officers, directors, partners, employees,
counsel and other representatives, who have been given access to such material,
nonpublic information, from engaging in any such purchase or sale during such
period.

         8.3      Resale of Securities.

                  (a)      Each Purchaser covenants that it will not sell or
otherwise transfer the Series G Preferred Stock (or any shares of Common Stock
acquired upon the conversion of shares of Series B Preferred Stock) except
pursuant to an effective registration under the Act or in a transaction which,
in the opinion of counsel reasonably satisfactory to the Company, qualifies as
an exempt transaction under the Act and the rules and regulations promulgated
thereunder and any applicable state securities laws.

                  (b)      The certificates evidencing the shares of Series G
Preferred Stock and the shares of Common Stock acquired upon conversion thereof
shall bear a legend substantially to the following effect:

                  THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE
                  NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
                  1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
                  TRANSFERRED EXCEPT PURSUANT TO AN

                                  20
<PAGE>   27

                  EFFECTIVE REGISTRATION UNDER THE ACT OR IN A
                  TRANSACTION WHICH, IN THE OPINION OF COUNSEL
                  REASONABLY SATISFACTORY TO THE COMPANY, QUALIFIES AS
                  AN EXEMPT TRANSACTION UNDER THE ACT AND THE RULES
                  AND REGULATIONS PROMULGATED THEREUNDER. THE
                  SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT
                  TO THE TERMS AND CONDITIONS OF A SHAREHOLDERS'
                  AGREEMENT DATED MARCH 3, 1999, AS AMENDED FROM TIME
                  TO TIME, A COPY OF WHICH WILL BE PROVIDED TO THE
                  SHAREHOLDER WITHOUT COST UPON REQUEST THEREFOR.

         8.4      Further Assurances. Each of the parties shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby. Each such shall use its best efforts to fulfill or obtain
the fulfillment of the conditions to the Closing as promptly as practicable.

SECTION 9. INTERPRETATION OF THIS AGREEMENT

         9.1      Defined Terms. As used in this Agreement, the following terms
have the respective meanings set forth below:

                  "Act" means the Securities Act of 1933, as amended.

                  "Affiliate" means with respect to any Person, any other Person
which directly or indirectly, by itself or through one or more intermediaries,
controls, or is controlled by, or is under direct or indirect common control
with, such Person. The term "control" means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.

                  The term "business day" means any day which is not a Saturday,
Sunday or day on which banks are authorized by law to be closed in the State of
Georgia.

                  "Code" means the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.

                  "Exchange Act" means the Securities Exchange Act of 1934.

                  "Person" means an individual, partnership, joint-stock
company, corporation, trust or unincorporated organization, and a government or
agency or political subdivision thereof.

         9.2      Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by, or prohibited to be taken by, any Person, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.

                                  21
<PAGE>   28

         9.3      Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.

         9.4      Section Headings. The headings of the sections and subsections
of this Agreement are for convenience only and shall not be deemed to
constitute a part of this Agreement.

SECTION 10. MISCELLANEOUS.

         10.1     Notices. All notices, instructions or other communications
required or permitted to be given hereunder or necessary in connection herewith
shall be in writing and shall be deemed to have been duly delivered upon the
delivery thereof, if delivered personally, upon the transmission thereof, if
sent by facsimile transmission, on the second business day after delivery to an
air courier company for express delivery, or on the seventh business day after
mailing, if mailed, postage prepaid, registered or certified mail, as follows:

                           (i)      if to Purchasers, at the address shown on
Schedule 10.1, marked for attention as there indicated, or at such
other address as Purchasers may have furnished to the Company in
writing:

                           (ii)     if to the Company, at the address shown
below, or at such other address as the Company may have furnished to
Purchasers in writing:

                                    SynQuest, Inc.
                                    Suite 555
                                    3500 Parkway Lane
                                    Norcross, Georgia  30092
                                    Attention: Vice President - Finance
                                    Telecopier: (770) 447-4995

                           With a copy to:

                                    William G. Roche, Esq.
                                    King & Spalding
                                    191 Peachtree Street
                                    Atlanta, Georgia  30303-1763
                                    Telecopier: (404) 572-5145

         10.2     Expenses. Each party shall be responsible for the fees and
disbursements of its legal counsel, incurred in connection with the negotiation,
execution and delivery of this Agreement, and the closing of the transactions
contemplated thereby. The Company has agreed to reimburse BT Alex Brown
Incorporated (the "Agent") on a quarterly basis for reasonable out-of-pocket
expenses and the fees and expenses of the Agent's special counsel, Hunton &
Williams, provided, however, that the total of all such reimbursements will not
exceed $80,000.

                                  22
<PAGE>   29

         10.3     Reproduction of Documents. This Agreement and all documents
relating hereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) documents received by
Purchasers pursuant hereto (except for certificates evidencing the Series G
Preferred Stock), and (c) financial statements, certificates and other
information previously or hereafter furnished to Purchasers, may be reproduced
by Purchasers or the Company by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and Purchasers or the
Company may destroy any original document so reproduced. The parties hereto
agree and stipulate that any such reproduction shall be admissible in evidence
as the original itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such reproduction was made
by Purchasers or the Company in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.

         10.4     Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto. Except to the extent otherwise provided for herein, neither this
Agreement nor the rights of the parties hereunder may be assigned without the
written consent of the nonassigning party.

         10.5     Entire Agreement; Disclosure Schedules; Amendment and Waiver.

                  This Agreement (including the Exhibits and Schedules attached
to this Agreement) constitutes the entire understanding of the parties hereto
and supersedes all prior term sheets, letters of intent, agreements or
understandings among such parties relating to the subject matter hereof. A
disclosure on any Schedule to this Agreement will be deemed to be a disclosure
for all other Schedules to this Agreement and for all other representations and
warranties made in this Agreement. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and Purchasers.

         10.6     Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute only one instrument.

         10.7     Survival. The representations, warranties, covenants and
agreements made in this Agreement, the Shareholders' Agreement, or in any
certificate or instrument delivered in connection with this Agreement or the
Shareholder's Agreement shall survive the execution and delivery of this
Agreement and the closing of the transactions contemplated by this Agreement.
All statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
in connection with the transactions contemplated by this Agreement shall be
deemed to be representations and warranties by the company solely as of the date
of such certificate or instrument.

                                  23
<PAGE>   30

 PREFERRED STOCK PURCHASE AGREEMENT OF SYNQUEST, INC., DATED MARCH 3, 1999.

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

                                            SynQuest, Inc.

                                            By: /s/ Joseph Trino
                                               ---------------------------------
                                               Joseph Trino
                                               President

                                            PURCHASERS

                                            WARBURG, PINCUS INVESTORS, L.P.
                                            Warburg, Pincus & Co., its
                                            General Partner

                                            By: /s/ Henry Kressel
                                               ---------------------------------
                                               Henry Kressel
                                               Managing Director

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