Document:

EXHIBIT 10.60

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                            STOCK PURCHASE AGREEMENT

                               DATED MAY 17, 2000

                  BY AND AMONG KARTS INTERNATIONAL INCORPORATED

                          AND THE SCHLINGER FOUNDATION

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________________________________________________________________________________

                            STOCK PURCHASE AGREEMENT

                                  by and among

                        KARTS INTERNATIONAL INCORPORATED

                                       and

                            THE SCHLINGER FOUNDATION

                            Dated as of May 17, 2000

________________________________________________________________________________

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                                TABLE OF CONTENTS
                                -----------------

                                                                            Page
                                                                            ----

SECTION 1.        DESCRIPTION OF TRANSACTION...................................1
                  --------------------------
         1.1      Description of Securities....................................1
                  -------------------------
         1.2      Closing......................................................1
                  -------
         1.3      Conditions to Closing........................................1
                  ---------------------
         1.4      Definitions..................................................3
                  -----------

SECTION 2.        REPRESENTATIONS OF THE COMPANY...............................4
                  ------------------------------
         2.1      Loan Agreement...............................................4
                  --------------
         2.2      Corporate Power..............................................4
                  ---------------
         2.3      Governmental Authorizations; Third Party Consents............5
                  -------------------------------------------------
         2.4      Authorization................................................5
                  -------------
         2.5      Capitalization...............................................5
                  --------------
         2.6      Preemptive Rights; Registration Rights.......................6
                  --------------------------------------
         2.7      Effect of Transactions.......................................6
                  ----------------------
         2.8      Brokerage....................................................6
                  ---------
         2.9      Disclosure...................................................6
                  ----------

SECTION 3.        REPRESENTATIONS OF THE INVESTORS.............................7
                  --------------------------------
         3.1      Authorization................................................7
                  -------------
         3.2      Investment Purpose...........................................7
                  ------------------
         3.3      Restrictions on Transferability..............................7
                  -------------------------------
         3.4      Status of Investor...........................................8
                  ------------------
         3.5      Brokerage....................................................8
                  ---------
         3.6      Own Account..................................................8
                  -----------
         3.7      Governmental Authorizations; Third Party Consents............8
                  -------------------------------------------------
         3.8      Effect of Transactions.......................................8
                  ----------------------

SECTION 4.        COVENANTS OF THE COMPANY.....................................8
                  ------------------------
         4.1      Loan Agreement...............................................8
                  --------------
         4.2      Use of Proceeds..............................................8
                  ---------------
         4.3      Restricted Corporate Actions.................................9
                  ----------------------------
         4.4      Board of Directors..........................................10
                  ------------------
         4.5      Preservation of Corporate Existence and Property............10
                  ------------------------------------------------
         4.6      Shareholder and Director Information........................10
                  ------------------------------------
         4.7      Liability Insurance.........................................10
                  -------------------
         4.8      No Impairment...............................................10
                  -------------
         4.9      Reserve for Conversion Shares...............................10
                  -----------------------------
         4.10     Bylaws......................................................11
                  ------
         4.11     Compliance..................................................11
                  ----------
         4.12     Rule 144A Information.......................................11
                  ---------------------
         4.13     Brokerage...................................................11
                  ----------
         4.14     Employment Agreements.......................................11
                  ---------------------

SECTION 5.  GENERAL...........................................................11
            -------
         5.1      Amendments, Waivers and Consents............................11
                  --------------------------------
         5.2      Survival; Assignability of Rights...........................12
                  ---------------------------------

                                       i

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         5.3      Rights of Investor Inter Se.................................12
                  ---------------------------
         5.4      Headings....................................................12
                  --------
         5.5      Governing Law...............................................12
                  -------------
         5.6      Notices and Demands.........................................12
                  -------------------
         5.7      Severability................................................13
                  ------------
         5.8      Expenses....................................................13
                  --------
         5.9      Entire Agreement............................................13
                  ----------------
         5.10     Counterparts................................................13
                  ------------

                                       ii

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                             SCHEDULES AND EXHIBITS
                             ----------------------

Exhibit A    -   Form of Certificate of Designations
Exhibit B    -   Form of Voting Agreement
Exhibit C    -   Form of Legal Opinion
Exhibit D    -   Form of Registration Rights Agreement
Exhibit E    -   Form of Amended and Restated Bylaws

Schedule 2.4     -    Authorization
Schedule 2.5     -    Capitalization
Schedule 2.8     -    Brokerage
Schedule 4.2     -    Use of Proceeds
Schedule 4.3     -    Restricted Corporate Actions

                                      iii

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                            STOCK PURCHASE AGREEMENT
                            ------------------------

         Karts International Incorporated,  a Nevada corporation (the "Company")
and The Schlinger  Foundation (the  "Investor"),  enter into this Stock Purchase
Agreement, dated May 17, 2000 (this "Agreement").

SECTION 1.    DESCRIPTION OF TRANSACTION
              --------------------------

         1.1  Description of Securities.  The Company has furnished the Investor
with  financial  and  nonfinancial  information  concerning  the Company and its
assets, liabilities,  condition (financial and otherwise),  operations, business
and prospects. Based on such information, the representations and warranties set
forth  herein and the other  terms and  provisions  hereof,  the  Investor  will
purchase  4,000,000  shares of Series A Preferred  Stock,  par value  $0.001 per
share,  of the Company (the  "Series A  Preferred"),  for an aggregate  purchase
price of  $3,000,000,  all on the terms and subject to the  conditions set forth
herein.

         1.2 Closing.  The closing (the  "Closing")  of the sale of the Series A
Preferred will take place at the offices of Jenkens & Gilchrist,  a Professional
Corporation,  1445 Ross Avenue,  Suite 3200, Dallas, Texas 75202, at 10:00 a.m.,
on the date of this Agreement,  or such other time and place as agreed to by the
parties hereto (the "Closing Date"). At the Closing, the Company will deliver to
the Investor  certificates  representing  the shares of Series A Preferred being
acquired by the Investor on the Closing Date upon payment of the purchase  price
by the Investor to the Company of immediately  available funds by wire transfer,
or by other form of payment  acceptable  to the  Company.  In  addition,  at the
Closing the Company shall  deliver to the Investors  payment for the expenses of
the Investor and its counsel,  to the extent such expenses are  reimbursable  by
the Company, as provided in Section 5.8 below.

         1.3  Conditions to Closing.  The obligation of the Investor to purchase
and pay for the  Series A  Preferred  to be  purchased  by the  Investor  on the
Closing Date is subject to the satisfaction, at or prior to the Closing, of each
of the following conditions:

         (a) the Company shall have duly authorized and filed the Certificate of
Designation  (the  "Certificate")  with the  Secretary  of State of the State of
Nevada, substantially in the form attached hereto as Exhibit A;

         (b) each of Investor,  Charles  Brister and Richard N. Jones shall have
executed a Voting  Agreement  ("Voting  Agreement"),  substantially  in the form
attached hereto as Exhibit B;

         (c) counsel for the  Company,  shall have  delivered  to the Investor a
legal  opinion,  dated  as of the  Closing  Date and  substantially  in the form
attached hereto as Exhibit C;

         (d) the Company and the Investor shall have entered into a Registration
Rights Agreement (the  "Registration  Rights  Agreement"),  substantially in the
form attached hereto as Exhibit D;

         (e)  the  Company  shall  have  adopted  Amended  and  Restated  Bylaws
substantially in the form attached hereto as Exhibit E;

<PAGE>

         (f) Timothy P.  Halter,  Joseph R.  Manmes,  and Ronald C. Morgan shall
have resigned as directors of the Company;

         (g) all  representations  of the Company to the Investor shall be true,
correct and complete as of the Closing Date;

         (h)  there  shall  be no  change  in the  business,  assets,  financial
condition, operation and results of operations of the Company since December 31,
1999,  which,  in the  Investor's  sole judgment,  is materially  adverse to the
Company;

         (i) the Investor,  through their personnel and  representatives,  shall
have completed and been satisfied with the results of their due diligence review
of the Company's business; and

         (j) the Company shall have delivered to the Investor:

                  (i) the  Articles  of  Incorporation  of the  Company  and all
amendments thereto, certified by the Secretary of State of Nevada;

                  (ii) (A) copies of the  resolutions of the Company's  Board of
Directors  authorizing and approving this Agreement and all of the  transactions
and  agreements  contemplated  hereby and thereby,  (B) the Amended and restated
Bylaws  of the  Company  and (C) the names of the  officer  or  officers  of the
Company  authorized  to  execute  this  Agreement  and any  and  all  documents,
agreements and instruments  contemplated  herein, all certified by the Secretary
of the Company to be true,  correct,  complete  and in full force and effect and
unmodified as of the Closing Date;

                  (iii) a  certificate  of  existence  for the Company  from the
Secretary of State of Nevada;

                  (iv) a certificate  of account status for the Company from the
Comptroller of the State of Nevada;

                  (v) certificates from each state where the Company is required
to be qualified as a foreign corporation showing such qualification, dated as of
a date within ten (10) days of the Closing Date; and

                  (vi) such other  documents,  instruments,  and certificates as
the Investor may reasonably request.

         (k) the Company  and the  Investor  shall have  executed  that  certain
Amended and Restated Loan Agreement (the "Loan Agreement");

         (l) each of the conditions precedent set forth in Section 7 of the Loan
Agreement  shall have been satisfied in the sole and absolute  discretion of the
Investor.

         1.4 Definitions.  As used in this Agreement,  the following terms shall
have the meanings set forth below:

                  "Articles  of  Incorporation"   shall  mean  the  Articles  of
Incorporation of the Company, as amended to date.

                                       2
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                  "Bylaws"  shall mean the Bylaws of the Company,  as amended to
date.

                  "Certificate" shall have the meaning given in Section 1.3(a).

                  "Common  Stock" shall mean the common stock,  par value $0.001
per share, of the Company.

                  "Compensation Committee" shall mean the Compensation Committee
of the Board of Directors of the Company.

                  "Conversion  Shares" shall mean any  securities of the Company
issued or issuable upon conversion of the Series A Preferred.

                  "Employee  Benefit  Plans" shall mean  employee  benefit plans
within Section 3(3) of ERISA.

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.

                  "Existing  Preferred  Shares"  shall  mean  the  Company's  9%
Convertible Preferred Stock outstanding on the date of this Agreement.

                  "GAAP" shall mean  generally  accepted  accounting  principles
consistently applied.

                  "New Securities" shall mean any shares of capital stock of the
Company,  including Common Stock and any series of Preferred Stock,  whether now
authorized  or not, and rights,  options or warrants to purchase  said shares of
Common Stock or Preferred Stock, and securities of any type whatsoever that are,
or may become,  convertible into or exchangeable for said shares of Common Stock
or Preferred  Stock.  Notwithstanding  the foregoing,  "New Securities" does not
include  (i) the  Conversion  Shares,  (ii) Common  Stock  offered to the public
generally  pursuant to a  registration  statement  under the  Securities  Act in
connection with a Qualified Public Offering,  (iii) securities issued or sold in
connection  with stock options  granted under the Stock Option Plan,  including,
without limitation, upon exercise of presently outstanding stock options, net of
repurchases  and  cancellations  and  expirations  (without  exercise)  of  such
options, (iv) stock issued in connection with any stock split, stock dividend or
recapitalization by the Company,  (v) stock issued in connection with any merger
or acquisition approved by the Investor,  (vi) Common Stock issued as a dividend
or upon conversion of the Company's  Existing  Preferred  Shares or (vii) Common
Stock  issued upon the  exercise of warrants of the Company  outstanding  at the
date of this Agreement.

                  "Preferred  Stock" shall mean the preferred  stock,  par value
$0.001 per share, of the Company,  which,  after the filing of the  Certificate,
will consist only of the Series A Preferred and the Existing Preferred Stock.

                  "Pro Rata Share"  shall mean the ratio that (i) the sum of the
total  number of shares of Common  Stock which are then held by the Investor and
those  which the  Investor  has the  right to obtain  pursuant  to  exercise  or
conversion of any option,  warrant, right or convertible security (including the
Series A  Preferred)  bears to (ii) the sum of the  total  number  of  shares of
Common Stock then  outstanding  and which are  issuable  pursuant to exercise or
conversion of any then  outstanding  options,  warrants,  rights or  convertible
securities (including the Series A Preferred).

                                       3
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                  "Requisite  Interest" shall mean the vote of the holders of at
least a majority of the then outstanding Series A Preferred (including, for such
purposes,  any  Conversion  Shares into which any of the Series A Preferred have
been converted that have not been sold to the public).

                  "Securities"  shall mean the equity securities of the Company,
including  any class or series of Preferred  Stock,  Common  Stock,  instruments
convertible  or  exchangeable  into such  securities,  or rights to acquire such
securities.

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

                  "Series A Preferred"  shall mean the Series A Preferred Stock,
$0.001 par value per share, of the Company.

                  "Stock  Option  Plan"  shall mean the 1998 Stock  Compensation
Plan of  Karts  International  Incorporated  as it  exists  on the  date of this
Agreement.

                  "Subsidiary"  shall mean any corporation,  partnership,  joint
venture,  limited  liability  company or other legal entity in which the Company
owns, directly or indirectly, an equity interest.

                  "To the best  knowledge of the Company" shall mean those facts
after due inquiry that are  actually  known,  or should have been known,  by the
officers of the Company.

SECTION 2.    REPRESENTATIONS OF THE COMPANY
              ------------------------------

         As part of the basis of this Agreement,  the Company hereby  represents
and warrants to the Investor, at the Closing Date, that:

         2.1 Loan Agreement.  Each of the representations and warranties made by
the Borrower  pursuant to Section 6 of the Loan Agreement are hereby made to the
Investor for purposes of this Agreement and are hereby incorporated by reference
herein.

         2.2 Corporate Power. The Company and the Subsidiaries have all required
corporate power and authority to own their respective properties and to carry on
their  respective  businesses  as  presently  conducted  and as  proposed  to be
conducted. The Company has all required corporate power and authority to execute
and deliver this  Agreement and the other  agreements  contemplated  herein,  to
issue and sell the Series A Preferred hereunder, to issue shares of Common Stock
upon  conversion  of the Series A Preferred,  and to carry out the  transactions
contemplated  by this Agreement and the other  agreements  contemplated  herein.
Attached  hereto  are true,  correct  and  complete  copies of the  Articles  of
Incorporation and Bylaws of the Company.

         2.3  Governmental  Authorizations;  Third Party Consents.  No approval,
consent, exemption,  authorization,  or other action by, or notice to, or filing
with,  any  governmental   authority  or  any  other  individual,   corporation,
partnership,  trust, incorporated or unincorporated association,  joint venture,
joint stock company,  government (or an agency or political subdivision thereof)
or other  entity of any kind is  necessary  or required in  connection  with the
execution,  delivery or  performance  by the Company of this  Agreement,  or any
other documents executed pursuant to this Agreement,  other than as specifically
required by this Agreement,  the filing of a registration  statement pursuant to
the Registration  Rights  Agreement,  the filing of a Form D with the Securities
and Exchange  Commission and filings  required under applicable state securities
or "blue sky" laws.

                                       4
<PAGE>

         2.4  Authorization.  Except as indicated  on Schedule  2.4 hereof,  all
corporate  action on the part of the Company,  its  directors  and  shareholders
necessary for (a) the authorization, execution, delivery and performance of this
Agreement and the other agreements  contemplated herein by the Company,  (b) the
authorization,  sale, issuance and delivery of the Series A Preferred (including
the  Conversion  Shares)  and  (c)  the  performance  of all  of  the  Company's
obligations  hereunder and under the other  agreements  contemplated  herein has
been taken. This Agreement and all documents executed pursuant to this Agreement
are valid and binding obligations of the Company, enforceable according to their
terms,  except  as may be  limited  by (i)  applicable  bankruptcy,  insolvency,
reorganization  or other  similar  laws of general  application  relating  to or
affecting the enforcement of creditor rights,  (ii) laws and judicial  decisions
regarding  indemnification  for violations of federal securities laws, (iii) the
availability of specific performance or other equitable remedies,  and (iv) with
respect  to  any  indemnification   agreements  set  forth  herein  or  therein,
principles of public policy.

         2.5  Capitalization.  The  authorized  and issued  capital stock of the
Company is as set forth in Schedule 2.5. All of the presently outstanding shares
of capital stock of the Company have been validly  authorized and issued and are
fully  paid  and  nonassessable.  The  Series  A  Preferred  have  been  validly
authorized and, when delivered and paid for pursuant to this Agreement,  will be
validly issued,  fully paid and  nonassessable  and free of all encumbrances and
restrictions,  except restrictions on transfer imposed by applicable federal and
state  securities laws and the Certificate.  The relative  rights,  preferences,
restrictions and other provisions  relating to the Series A Preferred are as set
forth in Exhibit A.  Except as  indicated  on  Schedule  2.5,  the  Company  has
authorized  and reserved for issuance upon  conversion of the Series A Preferred
not less than 8,000,000  shares of its Common Stock,  and the Conversion  Shares
will be,  when and if issued,  validly  authorized  and  issued,  fully paid and
nonassessable,   and  free  of  all   encumbrances  and   restrictions,   except
restrictions on transfer imposed by applicable federal and state securities laws
and the  Articles of  Incorporation.  Except as provided  in Schedule  2.5,  the
Company has not issued any other  shares of its  capital  stock and there are no
outstanding options,  warrants,  subscriptions or other rights or obligations to
purchase  or  acquire  any  of  such  shares,  nor  any  outstanding  securities
convertible  into or  exchangeable  for such  shares.  Except  as  disclosed  on
Schedule 2.5 or as contemplated  under this Agreement (and the other  agreements
executed in connection  herewith),  there are no agreements to which the Company
is a party or has  knowledge  regarding the  issuance,  registration,  voting or
transfer  of or  obligation  (contingent  or  otherwise)  of the  Company or any
Subsidiary  to  repurchase  or otherwise  acquire or retire or redeem any of its
outstanding  shares of capital stock. No dividends are accrued but unpaid on any
capital stock of the Company.

         2.6 Preemptive  Rights;  Registration  Rights.  There are no preemptive
rights affecting the issuance or sale of the Company's capital stock.  Except as
disclosed in Schedule 2.6, the Company is not under any  contractual  obligation
to  register  (in  compliance  with the  filing  requirements  and being  deemed
effective under the Securities Act) any of its presently outstanding  Securities
or any of its Securities  which may hereafter be issued,  except as described in
the Registration Rights Agreement.

                                       5
<PAGE>

         2.7 Effect of  Transactions.  The  Company's  execution and delivery of
this Agreement and the other agreements  contemplated herein, its performance of
the  transactions  contemplated  by  this  Agreement  and the  other  agreements
contemplated  herein,  and the  performance of the businesses of the Company and
each Subsidiary as now conducted, does not and will not violate any terms of the
Articles of Incorporation or Bylaws or violate any judgment, decree or order, or
any material  contract or obligation of the Company or such  Subsidiary,  as the
case may be, or any statute,  rule or regulation of any federal,  state or local
government or agency  applicable to the Company or any such  Subsidiary,  or any
material  contract to which any  employee of the  Company or any  Subsidiary  is
bound.  The offer and sale of the Series A Preferred will be in compliance  with
all federal and state securities  laws. No consent,  approval or filing with any
regulatory  agency is required to be taken by the Company or any  Subsidiary  in
connection with the  transactions  contemplated by this Agreement,  except those
which the Company or such  Subsidiary  has obtained or made in a timely  manner,
except for any filing of Form D or any applicable state blue sky filing that may
be made by the Company after the Closing.

         2.8 Brokerage.  Except as provided in Schedule 2.8, there are no claims
for brokerage  commissions,  finder's fees or similar compensation in connection
with the transactions contemplated by this Agreement based on any arrangement or
agreement made by the Company or any Subsidiary.

         2.9 Disclosure.  This Agreement and the exhibits and schedules  hereto,
when taken as a whole with other  documents  and  certificates  furnished by the
Company and any Subsidiary to the Investors or their counsel, do not contain any
untrue  statement of material fact or omit any material fact  necessary in order
to make the  statements  therein  not  misleading;  provided,  however,  certain
materials  provided to the Investor contain  projections and estimates of future
events,  and such  projections  and  estimates  have  been  based  upon  certain
assumptions  that  management of the Company and the  Subsidiaries  made in good
faith and believed were  reasonable at the time such  materials  were  prepared.
There  is no fact  known  to the  Company,  any  Subsidiary  that  has not  been
disclosed to the Investors  prior to the date of this Agreement that  materially
and adversely affects the business, assets,  properties,  prospects or condition
(financial or otherwise) of the Company or its  Subsidiaries , taken as a whole,
or the ability of the Company or any  Subsidiary to perform under this Agreement
or the other  agreements  contemplated  hereby or to consummate the transactions
contemplated hereby or thereby.

SECTION 3.    REPRESENTATIONS OF THE INVESTORS
              --------------------------------

         As part of the basis of this Agreement,  the Investor hereby represents
to the Company, at the Closing Date, that:

         3.1  Authorization.  The execution of this  Agreement and the documents
executed by the Investor  pursuant to this Agreement have been authorized by all
necessary action on the part of the Investor,  have been executed and delivered,
and constitute valid, legal, binding and enforceable agreements of the Investor,
except  as  may  be   limited   by  (a)   applicable   bankruptcy,   insolvency,
reorganization  or other  similar  laws of general  application  relating  to or
affecting the enforcement of creditor  rights,  (b) laws and judicial  decisions
regarding  indemnification  for violations of federal  securities  laws, (c) the
availability of specific  performance or other equitable remedies,  and (d) with
respect  to  any  indemnification   agreements  set  forth  herein  or  therein,
principles of public policy.

                                       6
<PAGE>

         3.2  Investment  Purpose.  The  Investor  is  acquiring  the  Series  A
Preferred  for its  own  account,  for  investment,  and not  with a view to any
"distribution"  within the meaning of the  Securities  Act.  The Investor has no
present intention to make any transfer of the Series A Preferred.

         3.3  Restrictions on  Transferability.  The Investor  understands  that
because the Series A Preferred  have not been,  and the  Conversion  Shares when
issued  will not have  been,  registered  under the  Securities  Act,  it cannot
dispose of any or all of the Series A Preferred or Conversion Shares unless they
are  subsequently  registered  under  the  Securities  Act  or  exemptions  from
registration are available.  The Investor  understands that no public market now
exists  for any of the  Securities  issued by the  Company  and that there is no
assurance  that a public  market will ever exist for the Series A Preferred  (or
the Conversion Shares).  The Investor  acknowledges and understands that, except
as provided in the Registration Rights Agreement, it has no registration rights.
Although it may be possible in the future to make  limited  public  sales of the
Series A Preferred  and/or  Conversion  Shares  without  registration  under the
Securities  Act, Rule 144 is not now available and there is no assurance that it
will become  available  for any purpose.  By reason of these  restrictions,  the
Investor  understands  that it may be  required  to hold the Series A  Preferred
and/or the  Conversion  Shares for an  indefinite  period of time.  The Investor
agrees  that in no event will it make a transfer  or  disposition  of any of the
Series A Preferred (or the Conversion  Shares) unless and until, if requested by
the  Company,  at the  expense  of the  Investor  or  transferee,  it shall have
furnished  to the  Company an opinion of counsel or other  evidence,  reasonably
satisfactory  to the  Company,  to the  effect  that such  transfer  may be made
without  registration  under the Securities Act. The Investor  understands  that
each certificate  representing the Series A Preferred and Conversion Shares will
bear appropriate state "blue sky" legends and a legend substantially as follows:

         THE  SHARES  REPRESENTED  BY THIS  CERTIFICATE  HAVE  NOT BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE
         SHARES MAY NOT BE SOLD,  MORTGAGED,  PLEDGED,  HYPOTHECATED OR
         OTHERWISE   TRANSFERRED  WITHOUT  AN  EFFECTIVE   REGISTRATION
         STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933, AS
         AMENDED,  OR UNLESS  SUCH SALE OR  TRANSFER IS EXEMPT FROM THE
         REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

         3.4 Status of Investor.  The Investor is knowledgeable  and experienced
in making  venture  capital  investments,  and able to bear the economic risk of
loss of its investment in the Company. The Investor is an "accredited investor,"
as that term is defined in Rule 501(a) of Regulation D under the Securities Act.

         3.5 Brokerage. There are no claims for brokerage commissions,  finder's
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by the Investor.

         3.6 Own Account. The Investor is acting on its own behalf in connection
with the  investigation  and  examination  of the  Company  and its  decision to
execute these  documents.  Investor has received (i) the Company's annual report
filed with the SEC on Form 10-K for the year ended  December 31, 1999,  (ii) the
Company's quarterly report filed with the SEC on Form 10-Q for the quarter ended
March 31, 2000,  and (iii) such other  information  regarding the Company as has
been requested by the Investor or its representatives.

                                       7
<PAGE>

         3.7 Governmental  Authorizations;  Third Party Consents. Based upon the
information  provided to the  Investor by the  Company,  no  approval,  consent,
exemption,  authorization, or other action by, or notice to, or filing with, any
governmental authority or any other individual, corporation, partnership, trust,
incorporated or unincorporated association,  joint venture, joint stock company,
government  (or an agency or political  subdivision  thereof) or other entity of
any kind is  necessary  or  required  by the  Investor  in  connection  with the
execution,  delivery and performance by the Investor of this  Agreement,  or any
other documents executed pursuant to this Agreement; provided, however, that the
Investor makes no  representations  with respect to applicable  federal or state
securities  laws;  and  provided,  further,  however,  that any liability of the
Investor resulting from a breach of this representation  shall be limited to the
aggregate  purchase  price  paid by the  Investor  for the  Series  A  Preferred
purchased hereunder.

         3.8 Effect of  Transactions.  The  Investor's  execution,  delivery and
performance  of this  Agreement and the other  agreements  contemplated  by this
Agreement will not violate any terms of its organizational  documents or, to its
knowledge,  violate any judgment,  decree or order, or any material  contract or
obligation  of the Investor or any statute,  rule or  regulation of any federal,
state or local government or agency applicable to the Investor.

SECTION 4.    COVENANTS OF THE COMPANY
              ------------------------

         The Company hereby covenants that, except as otherwise  provided below,
for so long as the Investor holds any of the Series A Preferred that:

         4.1  Loan  Agreement.  Each of the  covenants  made by the  Company  to
Investor  pursuant to Sections 8, 9, 10 and 11 of the Loan  Agreement are hereby
made for the benefit of Investor for purposes of this  Agreement  and are hereby
incorporated by reference herein.

         4.2 Use of Proceeds.  The Company  shall use the net proceeds  from the
sale of the Series A Preferred for the purposes set forth on Schedule 4.2. It is
the intention of the Company and the Subsidiaries to conduct their businesses in
accordance with the current  business plan of the Company,  which has previously
been delivered to the Investor.

         4.3 Restricted  Corporate  Actions.  The Company will not,  without the
written  approval  of the  holders  of a  Requisite  Interest,  take  any of the
following actions:

         (a) repurchase any Common Stock or Preferred Stock,  other than (i) the
redemption of the Series A Preferred in accordance  with the  Certificate,  (ii)
the  purchase of Common Stock from  employees  pursuant to  agreements  with the
Company as of the  Closing  Date to  repurchase  such stock;  provided  that the
purchase  price shall not exceed the price paid by such employee for such stock,
or (iii) as indicated on Schedule 4.3 hereof;

         (b) declare or pay any  dividend  (other than a stock  dividend) on the
Common Stock or Preferred  Stock (other than dividends on the shares of Series A
Preferred  in  accordance  with the  Certificate  and  dividends on the Existing
Preferred  Stock in accordance with the terms of such stock as they exist on the
date of this Agreement);

                                       8
<PAGE>

         (c) except to the extent necessary to comply with foreign laws,  create
any subsidiary in which the Company owns less than one hundred percent (100%) of
the equity  securities,  or permit any Subsidiary to issue any equity securities
to anyone other than the Company or a wholly-owned  Subsidiary of the Company or
merge with or into any Subsidiary;

         (d) create any new class or series of shares that has a preference over
or is on a parity with the Series A Preferred with respect to voting,  dividends
or liquidation  preferences  (except that the Company may grant voting rights to
shares of a series of Preferred  Stock which have the right to vote with holders
of Common Stock on an  as-converted  basis,  but in any event not in  preference
over the Series A Preferred);

         (e) enter into any  arrangement  or agreement  which (i) conflicts with
the rights of the holders of Series A Preferred  (ii)  restricts  the  Company's
performance  under this Agreement or any other documents  executed in connection
herewith or (iii) could result in the redemption of any shares of Common Stock;

         (f) amend the Articles of Incorporation or Bylaws;

         (g) adopt or amend an Employee  Benefit  Plan or amend the Stock Option
Plan;

         (h) make any investments  except (i) bank deposits in federally insured
financial institutions, (ii) investments in direct government obligations of the
United States of America (iii)  commercial  paper of a domestic issuer rated A-1
or better or P-1 or better by Standard & Poor's  Corporation or Moody's Investor
Services, Inc., respectively,  maturing not more than three months from the date
of acquisition and (iv) investments of the type set forth Schedule 4.3;

         (i)  acquire  substantially  all of the assets,  properties  or capital
stock of another person or entity in any single transaction or series of related
transactions;

         (j) issue any stock, options, or securities  convertible or exercisable
into the capital stock of the Company, including,  without limitation,  pursuant
to the Stock Option Plan,  with exercise  prices at less than fair market value,
as determined by the Compensation Committee; or

         (k) issue any stock,  options or securities  convertible or exercisable
into the  capital  stock of the  Company,  which are pari passu or senior to the
Series A Preferred in dividends, liquidation or otherwise.

         4.4 Board of Directors.  The Company agrees that the Company shall take
all appropriate  actions to provide for sufficient  vacant seats on the Board of
Directors  so that  Investor's  nominees can hold a majority of the seats on the
Board.  Unless otherwise  agreed to by the directors  nominated by the Investor,
the Board of Directors will meet at least quarterly.  The Company will reimburse
the directors  for all expenses  incurred by such  directors in connection  with
attending any board meetings or other board  functions.  If the Investor decides
not to  nominate  one or more of its  designees  for  election  to the  Board of
Directors,  the Investor  shall have the right to receive notice of and have one
(1)  representative  attend all  meetings  and other  functions  of the Board of
Directors and the Company will reimburse the Investor's  representative  for all
expenses  incurred by such  representative in connection with attending any such
board meetings or other board functions.

                                       9
<PAGE>

         4.5  Preservation  of Corporate  Existence  and  Property.  The Company
agrees to  preserve,  protect,  and  maintain,  and  cause  each  Subsidiary  to
preserve,  protect,  and  maintain,  (a) its  corporate  existence,  and (b) all
rights,  franchises,  accreditations,  privileges, and properties the failure of
which to  preserve,  protect,  and  maintain  might have a material  and adverse
effect on the business,  affairs, assets,  prospects,  operations, or condition,
financial or otherwise, of the Company and its Subsidiaries, taken as a whole.

         4.6  Shareholder  and  Director  Information.  At  the  request  of the
Investor,  the  Company  shall  promptly  deliver  to the  Investor  information
regarding the securityholders, officers and directors of the Company, including,
without  limitation,  names,  addresses,  types of securities  held and terms of
securities held.

         4.7  Liability  Insurance.  The  Company  will use its best  efforts to
maintain  comprehensive  liability  insurance  (including  automobile  liability
coverage) at regular premium rates with insurer(s) of recognized  responsibility
in an amount which is commercially  reasonable for the benefit of itself and the
Subsidiaries.

         4.8 No Impairment.  The Company and the  Subsidiaries  will observe and
honor in good  faith  all  rights  of the  Investors,  under  the  terms of this
Agreement or any other documents executed in connection herewith,  and will take
no action that would impair or otherwise prejudice such rights.

         4.9  Reserve for  Conversion  Shares.  The  Company  shall at all times
reserve and keep available out of its  authorized but unissued  shares of Common
Stock, for the purpose of effecting the conversion of the Series A Preferred and
otherwise  complying with the terms of this  Agreement,  such number of its duly
authorized  shares  of  Common  Stock as  shall  be  sufficient  to  effect  the
conversion of the Series A Preferred from time to time  outstanding or otherwise
to  comply  with the  terms of this  Agreement.  If at any  time the  number  of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the  conversion  of the Series A Preferred or otherwise to comply with the terms
of this Agreement,  the Company will forthwith take such corporate action as may
be necessary to increase its authorized  but unissued  shares of Common Stock to
such number of shares as shall be sufficient for such purposes. The Company will
obtain  any  authorization,  consent,  approval  or other  action by or make any
filing  with any  court  or  administrative  body  that  may be  required  under
applicable  state  securities  laws in connection with the issuance of shares of
Common Stock upon conversion of the Series A Preferred.

         4.10 Bylaws. The Company shall at all times cause its Bylaws to provide
that the number of directors  fixed in  accordance  therewith  shall in no event
conflict with any of the terms or  provisions of this  Agreement or the Articles
of  Incorporation.  The Company  shall at all times  maintain  provisions in its
Bylaws and/or  Articles of  Incorporation  indemnifying  all  directors  against
liability  and absolving  all  directors  from  liability to the Company and its
shareholders  to the  maximum  extent  permitted  under the laws of the State of
Nevada.

         4.11 Compliance. The Company shall comply, and cause each Subsidiary to
comply, with all applicable laws, rules,  regulations and orders,  noncompliance
with which could  materially  and  adversely  affect the business or  condition,
financial or otherwise of the Company and the Subsidiaries, taken as a whole.

                                       10
<PAGE>

         4.12 Rule 144A  Information.  The Company  shall,  at all times  during
which it is neither subject to the reporting requirements of Section 13 or 15(d)
of the  Securities  Exchange Act of 1934, as amended (the "Exchange  Act"),  nor
exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, provide
in writing,  upon the written request of the Investor or a prospective  buyer of
the Series A Preferred or Conversion  Shares from the Investor,  all information
required by Rule  144A(d)(4)(i)  of the General  Regulations  promulgated by the
Commission  under the  Securities Act ("Rule 144A  Information").  The Company's
obligations  under this Section 4.12 shall at all times be  contingent  upon the
Investor  obtaining  from  the  prospective  buyer  of  Series  A  Preferred  or
Conversion  Shares a written  agreement to take all  reasonable  precautions  to
safeguard  the Rule 144A  Information  from  disclosure  to anyone  other than a
person who will assist  such buyer in  evaluating  the  purchase of any Series A
Preferred or Conversion Shares.

         4.13  Brokerage.  The Company agrees to indemnify and hold harmless the
Investors for any brokerage  commissions,  finder's fees or similar compensation
in connection with the transactions  contemplated by this Agreement based on any
arrangement or agreement made by the Company or any Subsidiary.

         4.14 Employment  Agreements.  Within thirty (30) days after the Closing
Date,  each of Charles  Brister and Richard N. Jones shall have  entered into an
employment  agreement  with the  Company  in form and  substance  acceptable  to
Investor.

SECTION 5.    GENERAL
              -------

         5.1 Amendments,  Waivers and Consents.  Unless  otherwise  specified in
this Agreement,  any consents required and any waiver, amendment or other action
of the Investor or holders of the Series A Preferred (or Conversion  Shares) may
be made by consent(s) in writing signed by the holders of a Requisite  Interest.
Any specific  reference to approval or action by a Requisite  Interest shall not
imply that other  references to approval or action by the Investor or holders of
Series A Preferred (or  Conversion  Shares)  requires each holder's  approval or
action,  unless a higher or lower  approval  is so  specifically  stated in such
specific  reference.  Any amendment or waiver made according to this Section 5.1
will be  binding  upon  each  holder  of any  securities  purchased  under  this
Agreement  at  the  time  outstanding  (including  securities  into  which  such
securities have been converted) and each future holder.  Any amendment or waiver
by the  Company  must be made in  writing.  This  Agreement  may not be amended,
except in a written  document  signed by the  Company and holders of a Requisite
Interest.

         5.2  Survival;  Assignability  of Rights.  All  representations  of the
parties made in this Agreement and in the certificates,  exhibits,  schedules or
other  written  information  delivered or furnished by one party to the other in
connection  with this  Agreement  will  survive  the  delivery  of the  Series A
Preferred for a period of two (2) years subsequent to the Closing. All covenants
and agreements  made in this  Agreement will survive the Closing,  and will bind
and inure to the benefit of the parties' hereto and their respective  successors
and assigns.  Each  Investor  shall have the right to transfer any or all of its
rights  hereunder to any purchaser of Series A Preferred or  Conversion  Shares;
provided such  transferee  executes a signature page to this  Agreement  thereby
agreeing to be bound by and  entitled to the  benefits  of this  Agreement.  The
Company may not assign its rights or obligations  hereunder  without the consent
of the Investor, as provided in Section 5.1.

                                       11
<PAGE>

         5.3 Rights of Investor  Inter Se. The Investor  shall have the absolute
right to  exercise  or refrain  from  exercising  any right or rights  which the
Investor  may have by reason of this  Agreement  or any  Series A  Preferred  or
Conversion Shares,  including,  without limitation,  the right to consent to the
waiver of any  obligation of the Company under this  Agreement and to enter into
an agreement with the Company for the purpose of modifying this Agreement or any
agreement effecting any such modification,  and the Investor shall not incur any
liability to any other  Investor with respect to  exercising or refraining  from
exercising any such right or rights.

         5.4  Headings.  The  headings of the Sections  and  paragraphs  of this
Agreement  have been  inserted  for  convenience  of  reference  only and do not
constitute a part of this Agreement.

         5.5 Governing Law. THIS AGREEMENT IS TO BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE  WITH THE LAWS OF THE STATE OF TEXAS,  WITHOUT  GIVING  EFFECT TO THE
CHOICE OF LAW PROVISIONS THEREOF.

         5.6 Notices and  Demands.  Any notice or demand  which is  permitted or
required hereunder will be deemed to have been sufficiently  received (except as
otherwise  provided herein) (a) upon receipt when personally  delivered,  (b) or
one (1) day after sent by overnight delivery or telecopy providing  confirmation
or receipt of  delivery,  or (c) three (3) days after being sent by certified or
registered mail,  postage and charges prepaid,  return receipt  requested to the
following addresses:  if to the Company at the address as shown on the signature
page  of  this  Agreement  (with  a copy  as  shown),  or at any  other  address
designated by the Company to the Investors in writing; if to an Investor, at its
mailing  address as shown on the signature  pages of this Agreement (with a copy
as shown), or at any other address  designated by the Investor to the Company in
writing.

         5.7  Severability.  If any provision of this  Agreement is held invalid
under  applicable  law, such provision will be ineffective to the extent of such
invalidity,  and such invalid provision will be modified to the extent necessary
to make it valid and  enforceable.  Any such  invalidity will not invalidate the
remainder of this Agreement.

         5.8  Expenses.  The Company will pay (a) all costs and expenses that it
incurs with respect to the negotiation,  execution,  delivery and performance of
this Agreement,  and (b) the reasonable  out-of-pocket expenses of the Investors
and the reasonable legal fees and disbursements  incurred by one counsel for the
Investors  with  respect to this  Agreement  and the  transactions  contemplated
hereby. The Investors designate Jenkens & Gilchrist, a professional corporation,
as their  counsel  for this  transaction.  If any party is  required to take any
action to enforce its rights under this Agreement, the prevailing party shall be
entitled to its reasonable  expenses,  including  attorneys' fees, in connection
with any such action.

         5.9 Entire Agreement. This Agreement and the exhibits to this Agreement
constitute  the  entire  agreement  of the  parties,  and  supersede  any  prior
agreements.

         5.10  Counterparts.  This  Agreement  may be  executed in any number of
counterparts,  each  of  which  will  be  taken  to be  an  original;  but  such
counterparts will together constitute one document.

     [Remainder of page left blank intentionally; signature page follows.]

                                       12
<PAGE>

The  undersigned  have  executed  this  Agreement  as of the day and year  first
written above.

                              KARTS INTERNATIONAL INCORPORATED

                              By:      /s/ Charles Brister
                                  ------------------------
                              Name:  Charles Brister
                              Title: President and C.E.O.

                              Address:          P.O. Box 695
                                                62204 Commercial Street
                                                Roseland, Louisiana  70456
                                                Telephone:  504-747-1111
                                                Telecopy:    504-747-2700

                              With a copy to:   Rick Goodner, Esq.
                                                Jackson Walker, L.L.P.
                                                901 Main Street, Suite 6000
                                                Dallas, Texas 75202
                                                Telephone: 214-953-6167
                                                Telecopy:    214-953-5822

                                       13

<PAGE>

                            THE SCHLINGER FOUNDATION

                            By:      /s/ Evert I. Schlinger
                                   ---------------------------------------------
                            Name:  Evert I. Schlinger
                                   ---------------------------------------------
                            Title: President
                                   ---------------------------------------------

                            Address:         1944 Edison Street
                                             Santa Ynez, California  93460
                                             Telephone: 805-686-1618
                                             Telecopy:   805-686-1618

                            With a copy to:  Jenkens & Gilchrist, a Professional
                                             Corporation
                                             1445 Ross Avenue, Suite 3200
                                             Dallas, Texas 75202
                                             Attention: W. Alan Kailer, Esq.
                                             Telephone: 214-855-4500
                                             Telecopy:  214-855-4300

                                       14Exhibit 10.61

<PAGE>

                          REGISTRATION RIGHTS AGREEMENT
                          -----------------------------

         THIS  REGISTRATION  RIGHTS  AGREEMENT (this  "Agreement") is made as of
this 17th day of May 2000,  by and among  KARTS  INTERNATIONAL  INCORPORATED,  a
Nevada  corporation  (the  "Company"),   and  THE  SCHLINGER  FOUNDATION,   (the
"Investor").

                                   WITNESSETH:
                                   ----------

         WHEREAS, the Investor and the Company are parties to that certain Stock
Purchase  Agreement,  dated as of the date  hereof (the  "Purchase  Agreement"),
whereby the  Investor  shall  purchase and the Company  shall issue  [4,000,000]
shares of the  Company's  Series A Preferred  Stock,  par value $0.001 per share
(the "Series A Preferred");

         WHEREAS,  the obligations of the Investor under the Purchase  Agreement
are  conditioned,  among other  things,  upon the execution and delivery of this
Agreement by the Investor and the Company; and

         WHEREAS, the Company and the Investor desire to be granted and to grant
the rights created herein.

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

         1.       Definitions.  As used in this  Agreement,  the following terms
shall have the following respective meanings:

                  (a) All  capitalized  terms  used  and not  otherwise  defined
herein shall have the meanings given them in the Purchase Agreement.

                  (b) "Commission"  shall mean the United States  Securities and
Exchange  Commission,  or any other federal agency at the time administering the
Securities Act.

                  (c) "Common Stock" shall mean the Company's  Common Stock, par
value per share $0.001, as authorized on the date of this Agreement.

                  (d) "Conversion  Shares" shall mean the shares of Common Stock
issued or issuable upon conversion of the Series A Preferred.

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

                  (f)  "Investors"  shall  mean  Investor  and  any  Person  who
acquires any Registration  Securities from Investor in accordance with the terms
of this Agreement.

                  (g)  "Person"  shall  mean an  individual,  a  corporation,  a
partnership,  a limited liability  company, a joint venture, a trust, an estate,
an  unincorporated  organization,  a  government  and any  agency  or  political
subdivision thereof.

                  (h)  "Registrable  Securities"  shall mean (i) the  Conversion
Shares  or  shares of any  security  of the  Company  issued  or  issuable  upon
conversion  of the  Series A  Preferred;  and (ii) any other  securities  of the
Company   distributable  on,  with  respect  to,  or  in  substitution  of  such
Registrable  Securities,  except  for those  that have been sold or  transferred
pursuant to an effective registration  statement, or pursuant to Rule 144, under
the Securities Act.

                                       1
<PAGE>

                  (i)  "Registration  Expenses" shall mean all expenses incurred
in effecting  the  registrations  provided  for in Sections 2 and 3,  including,
without limitation,  all registration and filing fees,  printing expenses,  fees
and disbursements of counsel for the Company  underwriting  expenses (other than
fees,  commissions or discounts),  expenses of any Company audits incident to or
required by any such  registration  and Company  expenses of complying  with the
securities  or blue  sky  laws of any  jurisdictions  (but  excluding  fees  and
disbursements of counsel and other agents for the selling holders of Registrable
Securities).

                  (j) "Securities Act" shall mean the Securities Act of 1933, as
amended,  or any similar federal  statute,  and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.

         2.       Demand Registrations.

                  (a) At any time  subsequent to the date hereof,  the holder or
holders of at least  fifty  percent  (50%) of the  Registrable  Securities  then
outstanding, on behalf of all holders of Registrable Securities,  severally from
time to time may notify the Company in writing that such Investor(s)  intends to
offer for public  sale any  Registrable  Securities  (but only if the  aggregate
number of shares of such Registrable Securities to be offered for public sale is
more than fifty percent (50%) of the Registrable  Securities then  outstanding).
Upon receipt of such written  notice,  the Company will use its reasonable  best
efforts to cause the Registrable Securities as may be requested by the Investors
to be included in a registration statement under the Securities Act. The Company
shall not be required to file any  registration  statement for securities  other
than shares of Common Stock,  although any  conversion of Series A Preferred may
be conditioned upon such registration statement becoming effective to the extent
that such  conversion or exercise  relates to Conversion  Shares  covered by the
Investor's  written  notice of an  intended  public  offering.  In the event any
registration  attempted under this Section 2 pursuant to which the Company would
be  responsible  for  the   Registration   Expenses  of  the  Investors  is  not
consummated,  then  the  Company  shall  pay  such  expenses  and  shall  remain
responsible  for  such  expenses  of the  Investors  with  respect  to  two  (2)
consummated registrations made under this Section 2; provided,  however, that if
a registration  attempted  under this Section 2 is not  consummated  solely as a
result of the withdrawal of the Investors  requesting such registration,  unless
such Investors reimburse the Registration  Expenses incurred by the Company such
registration  statement shall count against the two (2) registration  statements
that the Company is  required  to a  consummate.  The  Investors  covered by the
registration  statement who desire to do so may sell such Registrable Securities
in an offering  pursuant to this Section 2 that is  underwritten  ("Underwritten
Offering").  In  any  such  Underwritten  Offering,  the  investment  banker  or
investment  bankers and manager or managers  that will  administer  the offering
will be  selected by the  holders of a majority  of the  Registrable  Securities
included  in  such  offering,  subject  to  approval  of the  Company  not to be
unreasonably withheld.

                  (b) A registration  statement filed pursuant to the request of
the Investors may include other  securities of the Company with respect to which
"piggy-back"  registration rights have been granted,  and may include securities
of the Company  being sold for the account of the  Company;  provided,  however,
that if the Company shall request inclusion in any registration pursuant to this
Section 2 of the securities being sold for its own account,  or if other persons
shall request inclusion in any registration  undertaken pursuant to this Section
2, the Investors shall, on behalf of all entities  requesting  inclusion in such
registration,  offer to  include  such  securities  in the  offering;  provided,
however,  that the Investors may condition any such offer on their acceptance of
reasonable  conditions  (including,  without limitation,  if such offering is an
Underwritten  Offering,  that the Company or any other such  requesting  holders
agree  in  writing  to enter  into an  underwriting  agreement  with  usual  and
customary terms). Notwithstanding any other provisions of this Section 2, if the
representative  of the  underwriters  advises  the  Investors  in  writing  that
marketing   factors  require  a  limitation  on  the  number  of  shares  to  be
underwritten,  the  number of  shares to be  underwritten  and  included  in the
registration  shall be allocated:  (i) first, to the Investor(s)  requiring such
registration,  pro rata  among  such  Investor(s)  on the basis of the number of
shares of  Registrable  Securities  for which each such  Investor has  requested
registration, (ii) second, to the Company, and (iii) third, to the other holders
requesting inclusion in the registration,  pro rata among the respective holders
thereof  on the basis of the  number of shares  for which  each such  requesting
holder has requested  registration.  If a Person who has requested  inclusion in
such  registration  as  provided  above  does not agree to the terms of any such
underwriting, such Person shall be excluded therefrom by written notice from the
Company,  the underwriter or the  Investor(s).  The securities so excluded shall
also be withdrawn from registration.

                  (c)  Except  as  provided  in  Section  2(a) with  respect  to
withdrawn  registration  statements,  all Registration Expenses of the Investors
incurred in connection with  registrations  requested pursuant to this Section 2
shall be borne by the Company.

                                       2
<PAGE>

         3.       "Piggy-Back" Registrations.

                  (a) If the Company decides to register any of its Common Stock
or  securities  convertible  into or  exchangeable  for Common  Stock  under the
Securities Act on a form which is suitable for an offering for cash or shares of
the  Company  held by third  parties and which is not a  registration  solely to
implement an employee  benefit  plan, a  registration  statement on Form S-4 (or
successor  form) or a transaction to which Rule 145 or any other similar rule of
the Commission is  applicable,  the Company will promptly give written notice to
the Investors of its intention to effect such a registration. Subject to Section
3(b)  below,  the  Company  will  use  all  reasonable  efforts  to  effect  the
registration  under the Securities Act of all  Registrable  Securities  that the
Investor(s)  request(s)  be included in such  registration  by a written  notice
delivered to the Company  within fifteen (15) days after the notice given by the
Company.  The Investors agree that any securities they request to be included in
a Company  registration  pursuant  to this  Section 3 shall be  included  by the
Company on the same form of  registration  statement as has been selected by the
Company  for the  securities  the  Company is  registering  for sale for its own
account.

                  (b) If the registration involves an Underwritten Offering, the
Company will not be required to register Registrable Securities in excess of the
amount that the principal  underwriter  reasonably and in good faith  recommends
may be  included in such  offering  (a  "Cutback"),  which  recommendation,  and
supporting  reasoning,  shall be delivered to the  Investors.  If such a Cutback
occurs,  the  number  of  shares  that  are  entitled  to  be  included  in  the
registration and underwriting  shall be allocated in the following  manner:  (i)
first,  to the  Company  for any  securities  it  proposes  to sell  for its own
account,  (ii) second,  to the Investor(s)  requiring such registration pro rata
among  such  Investor(s)  on the basis of the  number  of shares of  Registrable
Securities  held by the Investors for which each such Investor  above  requested
registration,  and (iii) third, to the other holders requesting inclusion in the
registration,  pro rata among the respective holders thereof on the basis of the
number  of  shares  for  which  each  such   requesting   holder  has  requested
registration.

                  (c) If the Company elects to terminate any registration  filed
under this  Section 3, the  Company  will have no  obligation  to  register  the
securities sought to be included by the Investors in such  registration.  If the
Company  includes in such  registration  any securities to be offered by it, all
Registration Expenses of the Investors will be borne by the Company.

         4.       Procedure for  Registration.  Whenever the Company is required
under this  Agreement to register  Registrable  Securities,  it agrees to do the
following:

                  (a) use  its  commercially  reasonable  efforts  to keep  such
registration statement continuously effective for 180 days (and, with respect to
one registration on Form S-3, for up to two years, if requested by the Investors
selling Registrable Securities) to complete the proposed distribution;  upon the
occurrence  of any event  that would  cause the  registration  statement  or the
prospectus contained therein to contain a material misstatement or omission, the
Company  shall file  promptly  an  appropriate  amendment  to such  registration
statement correcting any such misstatement or omission;

                  (b)  prepare  and file  with  the  Commission  a  registration
statement with respect to such Registrable  Securities and prepare and file with
the Commission such amendments and post-effective amendments to the registration
statement as may be necessary to keep the registration  statement  effective for
180 days (and,  with  respect  to one  registration  on Form S-3,  for up to two
years, if requested by the Investors selling Registrable Securities) to complete
the  proposed  distribution;  cause the  prospectus  to be  supplemented  by any
required prospectus  supplement,  and as so supplemented to be filed pursuant to
Rule 424 under the  Securities  Act,  and to comply  fully  with the  applicable
provisions of Rules 424 and 430A under the  Securities  Act in a timely  manner;
and  comply  with the  provisions  of the  Securities  Act with  respect  to the
disposition of all securities covered by such registration  statement during the
applicable  period  in  accordance  with  the  intended  method  or  methods  of
distribution by the sellers thereof set forth in such registration  statement or
supplement to the prospectus;

                                       3
<PAGE>

                  (c) advise the  underwriter(s),  if any, and selling Investors
promptly and, if requested by such  Persons,  to confirm such advice in writing,
(i) when the prospectus or any prospectus supplement or post-effective amendment
has  been  filed,  and,  with  respect  to  the  registration  statement  or any
post-effective  amendment thereto,  when the same has become effective,  (ii) of
any request by the Commission for  amendments to the  registration  statement or
amendments  or  supplements  to the  prospectus  or for  additional  information
relating  thereto,  (iii) of the  issuance by the  Commission  of any stop order
suspending the effectiveness of the registration  statement under the Securities
Act or of the suspension by any state securities commission of the qualification
of the Registrable  Securities for offering or sale in any jurisdiction,  or the
initiation  of any  proceeding  for any of the preceding  purposes,  (iv) of the
existence of any fact or the  happening of any event that makes any statement of
a  material  fact  made  in the  registration  statement,  the  prospectus,  any
amendment  or  supplement  thereto,  or any document  incorporated  by reference
therein  untrue,  or that  requires the making of any additions to or changes in
the  registration  statement or the  prospectus in order to make the  statements
therein not misleading. If at any time the Commission shall issue any stop order
suspending  the  effectiveness  of  the  registration  statement  or  any  state
securities  commission  or  other  regulatory  authority  shall  issue  an order
suspending the qualification or exemption from  qualification of the Registrable
Securities  under state  securities or blue sky laws,  the Company shall use its
reasonable best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time;

                  (d) furnish to each of the selling  Investors  and each of the
underwriter(s),  if any,  before  filing  with  the  Commission,  copies  of the
registration  statement or any prospectus  included therein or any amendments or
supplements  to any such  registration  statement or prospectus  (including  all
documents   incorporated   by  reference   after  the  initial  filing  of  such
registration statement), and the Company will consult with the selling Investors
of  Registrable  Securities  covered  by  such  registration  statement  or  the
underwriter(s),  if any, prior to the filing of such  registration  statement or
prospectus;

                  (e)   if   requested   by   any   selling   Investor   or  the
underwriter(s), if any, incorporate in the registration statement or prospectus,
pursuant  to  a  supplement  or  post-effective  amendment  if  necessary,  such
information as such selling Investor and underwriter(s),  if any, may reasonably
request to have  included  therein,  with  respect to the number of  Registrable
Securities  being sold to such  underwriter(s),  the  purchase  price being paid
therefor and any other terms of the offering of the Registrable Securities to be
sold  in such  offering  and  make  all  required  filings  of  such  prospectus
supplement or post-effective  amendment as soon as practicable after the Company
is notified of the matters to be incorporated  in such prospectus  supplement or
post-effective amendment;

                  (f)  furnish  to  each  selling   Investor  and  each  of  the
underwriter(s),  if any,  without charge,  at least one copy of the registration
statement,  as first filed with the Commission,  and of each amendment  thereto,
including  all  documents  incorporated  by  reference  therein and all exhibits
(including exhibits incorporated therein by reference);

                  (g)  deliver  to  each  selling   Investor  and  each  of  the
underwriter(s),  if any,  without  charge,  as  many  copies  of the  prospectus
(including each preliminary  prospectus) and any amendment or supplement thereto
as such Persons  reasonably may request;  the Company hereby consents to the use
of the prospectus and any amendment or supplement thereto by each of the selling
Investors  and  each of the  underwriter(s),  if any,  in  connection  with  the
offering and the sale of the Registrable Securities covered by the prospectus or
any amendment or supplement thereto;

                  (h) prior to any public  offering of  Registrable  Securities,
the Company  shall use its  reasonable  best  efforts to register or qualify the
Registrable   Securities   under  the  securities  or  blue  sky  laws  of  such
jurisdictions as the selling Investors or underwriter(s), if any, may reasonably
request  and do any and  all  other  acts  or  things  reasonably  necessary  or
advisable to enable the  disposition in such  jurisdictions  of the  Registrable
Securities covered by the registration  statement;  provided,  however, that the
Company  shall not be required  to register or qualify as a foreign  corporation
where it is not now so qualified or to take any action that would  subject it to
the  service of process in suits or to  taxation,  other than as to matters  and
transactions relating to the registration  statement,  in any jurisdiction where
it is not now so subject;

                  (i)   cooperate   with   the   selling   Investors   and   the
underwriter(s),  if any, to facilitate  the timely  preparation  and delivery of
certificates  representing Registrable Securities to be sold and not bearing any
restrictive  legends;  and  enable  such  Registrable  Securities  to be in such
denominations and registered in such names as the holders or the underwriter(s),
if any, may request  prior to any sale of  Registrable  Securities  made by such
underwriter(s);

                                       4
<PAGE>

                  (j) if any fact or event  contemplated by clause (c)(iv) above
shall exist or have occurred,  promptly  prepare a supplement or  post-effective
amendment to the  registration  statement or related  prospectus or any document
incorporated  therein by reference or file any other required  document so that,
as  thereafter  delivered  to the  purchasers  of  Registrable  Securities,  the
prospectus  will not contain an untrue  statement of a material  fact or omit to
state any material fact necessary to make the statements therein not misleading;

                  (k)  cooperate  and assist in any filings  required to be made
with the National  Association of Securities  Dealers,  Inc. ("NASD") and in the
performance of any due diligence investigation by any underwriter (including any
"qualified  independent  underwriter")  that  is  required  to  be  retained  in
accordance with the rules and regulations of the NASD;

                  (l)  otherwise use its  reasonable  efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to its  security  holders,  as  soon as  practicable,  a  consolidated  earnings
statement meeting the requirements of the Securities Act and Rule 158 thereunder
(which need not be audited) for the  twelve-month  period (i)  commencing at the
end  of  any  fiscal  quarter  in  which  Registrable  Securities  are  sold  to
underwriters in a firm or best efforts Underwritten Offering or (ii) if not sold
to  underwriters  in such an  offering,  beginning  with the first  month of the
Company's  first  fiscal  quarter  commencing  after the  effective  date of the
registration statement;

                  (m)  enter  into  such  customary  agreements   (including  an
underwriting agreement in customary form) in order to expedite or facilitate the
disposition of such Registrable Securities;

                  (n) make available for inspection by any holder of Registrable
Securities   included   in  such   registration   statement,   any   underwriter
participating in any disposition  pursuant to such registration  statement,  and
any  attorney,  accountant  or  other  agent  retained  by any  such  seller  or
underwriter (collectively,  the "Inspectors"),  all financial and other records,
pertinent corporate documents and properties of the Company  (collectively,  the
"Records"),  as shall be reasonably  necessary to enable them to exercise  their
due diligence  responsibility,  and cause the Company's officers,  directors and
employees to supply all information  reasonably  requested by any such Inspector
in connection with such registration statement;  provided that records which the
Company determines,  in good faith, to be confidential and which it notifies the
Inspectors are confidential  shall not be disclosed by the Inspectors unless (i)
the  disclosure of such Records is necessary to avoid or correct a  misstatement
or omission in the registration statement or (ii) the release of such Records is
ordered  pursuant  to a  subpoena  or  other  order  from a court  of  competent
jurisdiction;  provided,  further, each holder of Registrable  Securities agrees
that it will, upon learning that disclosure of such Records is sought in a court
of competent jurisdiction,  give notice to the Company and allow the Company, at
its expense,  to undertake  appropriate  action and to prevent disclosure of the
Records deemed confidential; and

                  (o) in an  Underwritten  Offering,  use  its  reasonable  best
efforts to obtain a cold comfort  letter from the Company's  independent  public
accountants in customary form and covering such matters of the type  customarily
covered by cold comfort  letters as the holders of a majority of the Registrable
Securities being sold reasonably request.

         5.       Limitation on Registration;  Lock-Up Agreement;  Suspension of
                  Sales.

                  (a) The  Company  is not  required  to file  more than two (2)
registration  statements in total under  Section 2(a).  The Company may postpone
the  filing  of  any  registration  statement  required  under  Section  2 for a
reasonable  period of time,  not to exceed  ninety (90) days, if the Company has
been advised by legal counsel that such filing would require the disclosure of a
material fact, and the Company determines reasonably and in good faith that such
disclosure would have a detrimental effect on the Company.

                  (b) If (i)  in  the  good  faith  judgment  of  the  Board  of
Directors  of the  Company,  a required  registration  under  Section 2 would be
detrimental to the Company and the Board of Directors of the Company  concludes,
as a  result,  that it is  essential  to defer the  filing of such  registration
statement at such time,  and (ii) the Company  shall  furnish to the Investors a
certificate  signed by the  President  of the Company  stating  that in the good
faith judgment of the Board of Directors of the Company, it would be detrimental
to the Company for such  registration  statement or amendment to be filed in the
near  future and that it is,  therefore,  essential  to defer the filing of such
registration  statement or  amendment,  then the Company shall have the right to
defer such  filing for a period of not more than one  hundred  and eighty  (180)
days after receipt of the request of the Investors,  and, provided further, that
the Company shall not defer its  obligation in this manner more than once in any
twelve-month period.

                                       5
<PAGE>

                  (c) Each holder of Registrable Securities agrees not to effect
or request any public sale or distribution  of securities  which are the same as
or  which  are  similar  in  nature  as  the  securities  of the  Company  being
registered,  during the fourteen (14) days prior to and during the 90-day period
beginning  on,  the  effective  date of a  registration  statement  filed by the
Company  (except  as part of such  registration),  but only if and to the extent
requested in writing (with reasonable prior notice) by the managing  underwriter
or underwriter in the case of an  Underwritten  Offering or, if such offering is
not  underwritten,  by the  Company of  securities  similar  to the  Registrable
Securities;  provided,  however,  that all officers and directors of the Company
then  holding  Common  Stock of the  Company  and all  holders  of at least five
percent  (5%) of the  Company's  outstanding  Common  Stock  enter into  similar
agreements.

                  (d)  The  Company  agrees  (i) not to  effect  or  initiate  a
registration  statement for any public sale or  distribution  of any  securities
similar  to  those  being  registered,  or any  securities  convertible  into or
exchangeable or exercisable for such  securities,  during the fourteen (14) days
prior to, and during the 90-day period  beginning on, the effective  date of any
registration  statement  in which the  holders  of  Registrable  Securities  are
participating (except as part of such registration); and (ii) that any agreement
entered  into on or  after  the date of this  Agreement  pursuant  to which  the
Company issues or agrees to issue any privately placed  securities shall contain
a  provision  under  which  holders of such  securities  agree not to effect any
public sale or distribution of any such securities  during the periods described
in (i) above,  in each case  including a sale pursuant to Rule 144 under the Act
(except as part of any such registration, if permitted).

                  (e) Each holder of Registrable  Securities  agrees that,  upon
receipt of notice  from the Company of the  occurrence  of any event of the kind
described  in  Section  4(c)(ii-iv),  such  holder  will  forthwith  discontinue
disposition  of such  Registrable  Securities  following the effective date of a
registration  statement covering such Registrable Securities until such holder's
receipt of copies of the prospectus supplement and/or  post-effective  amendment
contemplated  by Section  4(j), or until it is advised in writing by the Company
that the use of the  applicable  prospectus  may be resumed and, in either case,
has  received  copies  of  any  additional  or  supplemental  filings  that  are
incorporate  or deemed to be  incorporated  by reference in such  prospectus  or
registration statement.

         6.       Indemnification.

                  (a) The Company  agrees to indemnify  and hold  harmless  each
Investor and each Person,  if any, who controls any Investor  within the meaning
of Section 15 of the  Securities Act or Section 20 of the Exchange Act, from and
against any and all losses,  claims,  damages,  liabilities and expenses arising
out of or based  upon any untrue  statement  or alleged  untrue  statement  of a
material fact  contained in any  registration  statement or  prospectus  (or any
amendment or supplement  thereto),  or arising out of or based upon 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,  except
insofar as such losses, claims, damages, liabilities or expenses arise out of or
are based upon any untrue  statement or omission or alleged untrue  statement or
omission  which has been made therein or omitted  therefrom in reliance upon and
in  conformity  with the  information  relating to the  Investors  furnished  in
writing  to the  Company  by  the  Investors  expressly  for  use in  connection
therewith.  The  foregoing  indemnity  agreement  shall  be in  addition  to any
liability which the Company may otherwise have.

                  (b) If any action, suit or proceeding shall be brought against
the  Investors  or any  Person  controlling  the  Investors  in respect of which
indemnity may be sought against the Company,  the Investors or such  controlling
Person shall promptly notify the parties against whom  indemnification  is being
sought  (collectively  the  "Indemnifying  Parties"  and  each an  "Indemnifying
Party"),  and such  Indemnifying  Parties  shall  assume  the  defense  thereof,
including  the  employment  of counsel  and  payment  of all fees and  expenses;

                                       6
<PAGE>

provided,  however,  that failure to so notify an  Indemnifying  Party shall not
relieve such  Indemnifying  Party from any liability unless and to the extent it
is prejudiced as a result of such failure. The Investors or any such controlling
Person shall have the right to employ separate counsel in any such action,  suit
or  proceeding  and to  participate  in the  defense  thereof,  but the fees and
expenses  of such  counsel  shall be at the  expense  of the  Investors  or such
controlling Person unless (i) the Indemnifying Parties have agreed in writing to
pay such fees and expenses,  (ii) the Indemnifying Parties have failed to assume
the defense and employ  counsel,  or (iii) the named parties to any such action,
suit or proceeding  (including any impleaded parties) include both the Investors
or such  controlling  Person and the  Indemnifying  Parties and the Investors or
such  controlling  Person shall have been advised in writing by its counsel that
representation of such indemnified party and any Indemnifying  Party by the same
counsel  would be  inappropriate  under  applicable  standards  of  professional
conduct  (whether  or not  such  representation  by the  same  counsel  has been
proposed) due to actual or potential  differing interests between them (in which
case the  Indemnifying  Party  shall not have the right to assume the defense of
such action,  suit or proceeding on behalf of the Investors or such  controlling
Person).  It is understood,  however,  that the  Indemnifying  Parties shall, in
connection  with  any one  such  action,  suit or  proceeding  or  separate  but
substantially  similar  or related  actions,  suits or  proceedings  in the same
jurisdiction  arising out of the same general  allegations or circumstances,  be
liable  for the  reasonable  fees  and  expenses  of only one  separate  firm of
attorneys  (in addition to any local  counsel) at any time for the Investors and
controlling  Persons not having actual or potential differing interests with the
Investors or among themselves,  which firm shall be designated in writing by the
Investors,  and that all such fees and expenses  shall be reimbursed as they are
incurred. The Indemnifying Parties shall not be liable for any settlement of any
such action, suit or proceeding  effected without their written consent,  but if
settled  with such  written  consent,  or if there be a final  judgment  for the
plaintiff in any such action, suit or proceeding, the Indemnifying Parties agree
to  indemnify  and hold  harmless  the  Investors,  to the  extent  provided  in
paragraph (a) hereof, and any such controlling Person from and against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.

                  (c)  Each  Investor,  severally  and not  jointly,  agrees  to
indemnify and hold harmless the Company, and its directors and officers, and any
Person  who  controls  the  Company  within  the  meaning  of  Section 15 of the
Securities  Act or  Section  20 of the  Exchange  Act to the same  extent as the
indemnity  from the Company to the  Investors set forth in paragraph (a) hereof,
but only with  respect to  information  relating to such  Investor  furnished in
writing by or on behalf of such Investor  expressly for use in the  registration
statement or prospectus; provided, however, that no Investor shall be liable for
any claims hereunder in an amount in excess of the net proceeds received by such
Investor  from  the  sale  of  the  Registrable   Securities   pursuant  to  the
registration  statement.  If any  action,  suit or  proceeding  shall be brought
against the Company,  any of its directors or officers,  or any such controlling
Person  based on the  registration  statement or  prospectus,  and in respect of
which  indemnity may be sought against the Investors  pursuant to this paragraph
(c),  the  Investors  shall have the rights and duties  given to the  Company by
paragraph  (b) above  (except that if the Company shall have assumed the defense
thereof the  Investors  shall not be required to do so, but may employ  separate
counsel  therein  and  participate  in the  defense  thereof,  but the  fees and
expenses of such counsel shall be at the Investors'  expense),  and the Company,
its  directors  and  officers,  and any such  controlling  Person shall have the
rights and duties given to the Investors by paragraph (b) above.

                  (d) If the  indemnification  provided for in this Section 6 is
unavailable  (except if  inapplicable  according to its terms) to an indemnified
party  under  paragraphs  (a) or (c) hereof in respect  of any  losses,  claims,
damages,  liabilities  or expenses  referred to  therein,  then an  Indemnifying
Party, in lieu of indemnifying such indemnified  party,  shall contribute to the
amount  paid or payable by such  indemnified  party as a result of such  losses,
claims,  damages,   liabilities  or  expenses  (i)  in  such  proportion  as  is
appropriate to reflect the relative benefits received by the Company, on the one
hand,  and the  Investors,  on the other  hand,  from their sale of  Registrable
Securities (it being expressly  understood and agreed that the relative benefits
received by the Company  from the sale of the  Registrable  Securities  shall be
equal to the amount of net proceeds received by the Company from the sale of the
Registrable Securities to the Investors),  or (ii) if the allocation provided by
clause (i) above is not  permitted by applicable  law, in such  proportion as is
appropriate to reflect not only the relative  benefits referred to in clause (i)
above but also the  relative  fault of the  Company,  on the one  hand,  and the
Investors,  on the other hand,  in connection  with the  statements or omissions
that resulted in such losses, claims, damages,  liabilities or expenses, as well
as any  other  relevant  equitable  considerations.  The  relative  fault of the
Company,  on the one  hand,  and the  Investors,  on the  other  hand,  shall be
determined by reference  to, among other  things,  whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, on the one hand,
or by the  Investors,  on the other  hand,  and the  parties'  relative  intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
statement or omission.

                                       7
<PAGE>

                  (e) The Company and the  Investors  agree that it would not be
just and equitable if contribution pursuant to this Section 6 were determined by
a pro rata  allocation or by any other method of  allocation  that does not take
account of the equitable  considerations referred to in paragraph (d) above. The
amount  paid or  payable  by an  indemnified  party as a result  of the  losses,
claims,  damages,  liabilities  and expenses  referred to in paragraph (d) above
shall be deemed to include,  subject to the  limitations  set forth  above,  any
legal  or  other  expenses  reasonably  incurred  by such  indemnified  party in
connection with  investigating  any claim or defending any such action,  suit or
proceeding.  Notwithstanding  the  provisions  of this Section 6, the  Investors
shall not be required to contribute  any amount in excess of the amount by which
the net proceeds received by them in connection with the sale of the Registrable
Securities  exceeds the amount of any damages which the Investors have otherwise
been  required to pay by reason of such untrue or alleged  untrue  statement  or
omission or alleged omission.  No person guilty of fraudulent  misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.

                  (f) The indemnity  and  contribution  agreements  contained in
this Section 6 and the  representations  and warranties of the Company set forth
in  this  Agreement  shall  remain  operative  and in  full  force  and  effect,
regardless of any investigation  made by or on behalf of any of the Investors or
any Person controlling the Investors,  the Company, its directors or officers or
any Person  controlling the Company.  A successor to the Investors or any Person
controlling the Investors,  or to the Company,  its directors or officers or any
Person  controlling  the  Company  shall  be  entitled  to the  benefits  of the
indemnity,  contribution and reimbursement  agreements contained in this Section
6.

                  (g) No  Indemnifying  Party shall,  without the prior  written
consent of the  indemnified  party,  effect  any  settlement  of any  pending or
threatened action,  suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought  hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such  indemnified  party from all  liability  on claims  that are the subject
matter of such action, suit or proceeding.

         7.       Rule 144  Requirements.  If the Company becomes subject to the
reporting  requirements of the Exchange Act, the Company will use its reasonable
best efforts to file with the Commission such  information as the Commission may
require and will use its  reasonable  best  efforts to make  available  Rule 144
under the Securities Act (or any successor exemptive rule).

         8.       Obligations  of Investors and Others in a  Registration.  Each
Investor agrees timely to furnish such information regarding such Person and the
securities  sought to be registered and to take such other action as the Company
may reasonably  request in connection with the  registration,  qualification  or
compliance. The Company may exclude from any registration statement any Investor
that timely fails to comply with the  provisions of the preceding  sentence.  If
the registration involves an underwriter,  each Investor agrees upon the request
of such underwriter,  not to sell any unregistered securities of the Company for
a period of ninety (90) days  following the effective  date of the  registration
statement for such  offering and to enter into an  underwriting  agreement  with
such  underwriters  containing  usual and customary  terms and  provisions.  The
Investors  agree not to affect  the sale of  securities  under any  registration
statement  until they have received a prospectus,  as needed,  and notice of the
effectiveness  of the  registration  statement of which the  prospectus  forms a
part.

         9.       Preparation;  Reasonable Investigation. In connection with the
preparation and filing of each  registration  statement under the Securities Act
pursuant to this  Agreement,  the Company  will give the holders of  Registrable
Securities registered under such registration statement, their underwriters,  if
any,  and  one  counsel  or  firm  of  counsel  and  one  accountant  or firm of
accountants  representing  all  the  holders  of  Registrable  Securities  to be
registered under such registration statement,  the opportunity to participate in
the preparation of such registration statement, each prospectus included therein
or filed with the Commission, and each amendment thereof or supplement thereto.

         10.      Rule 144A.  The Company  agrees that,  upon the request of any
holder of  Registrable  Securities or any  prospective  purchaser of Registrable
Securities  designated by a holder,  the Company shall promptly  provide (but in
any case within  fifteen  (15) days of a request)  to such  holder or  potential
purchaser, the following information:

                                       8
<PAGE>

                  (a) a brief  statement  of the nature of the  business  of the
Company and any subsidiaries and the products and services they offer;

                  (b) the most recent consolidated balance sheets and profit and
losses and retained earnings statements, and similar financial statements of the
Company for the two (2) most recent  fiscal  years (such  financial  information
shall be audited, to the extent reasonably available); and

                  (c)  such   other   information   about   the   Company,   any
subsidiaries,  and their business, financial condition and results of operations
as the  requesting  holder or purchaser  of such  Registrable  Securities  shall
request  in order to comply  with  Rule  144A,  as  amended,  and in  connection
therewith the anti-fraud provisions of the federal and state securities laws.

         The Company  hereby  represents  and  warrants  to any such  requesting
holder and any prospective purchaser of Registrable  Securities from such holder
that the information  provided by the Company  pursuant to this Section 10 will,
as of their dates,  not contain any untrue  statement of a material fact or omit
to state a material  fact  necessary in order to make the  statements  made,  in
light of the circumstances under which they were made, not misleading.

         11.      Limitations  on Subsequent  Registration  Rights.  The Company
will not, without the prior written consent of the holder or holders of at least
a  majority  of the then  outstanding  Registrable  Securities,  enter  into any
agreements  with any  holder  or  prospective  holder of any  securities  of the
Company which would grant such holder or prospective holder  registration rights
with respect to the  securities of the Company which are senior or pari passu to
the rights granted to the Investors hereunder.

         12.      Consent  to be  Bound.  Each  subsequent  holder  of  Series A
Preferred or Registrable  Securities  must consent in writing to be bound by the
terms and  conditions of this  Agreement in order to acquire the rights  granted
pursuant to this Agreement.

         13.      Assignability  of Registration  Rights.  Subject to Section 12
hereof,  the  registration  rights set forth in this Agreement are assignable to
each assignee as to the Series A Preferred,  the Conversion Shares or each share
of Registrable  Securities conveyed in accordance herewith who agrees in writing
to be bound by the terms and conditions of this Agreement.  The term "seller" as
used in this Agreement refers to a holder of the Registrable  Securities selling
such shares.

         14.      Amendment,   Termination  and  Waiver.   Except  as  otherwise
provided herein, no amendment, modification, termination or cancellation of this
Agreement shall be effective  unless made in a writing signed by the Company and
the holders of at least  two-thirds of the then  outstanding  Series A Preferred
(including, for such purposes, any Registrable Securities).

         15.      Specific Performance. The Company and the Investors agree that
the rights created by this  Agreement are unique,  and that the loss of any such
right is not susceptible to monetary quantification.  Consequently,  the parties
agree that an action for specific  performance  (including for temporary  and/or
permanent  injunctive relief) of the obligations  created by this Agreement is a
proper remedy for the breach of the  provisions of this  Agreement,  without the
necessity  of  proving  actual  damages.  If the  parties  hereto  are forced to
institute  legal  proceedings  to enforce  their rights in  accordance  with the
provisions of this Agreement,  the prevailing party shall be entitled to recover
its reasonable expenses,  including attorneys' fees, in connection with any such
action.

         16.      Miscellaneous.

                  (a) Except as  otherwise  specifically  provided  herein,  all
notices, requests, demands and other communications provided for hereunder shall
be in  writing  and shall be deemed  effectively  given  (i) upon  receipt  when
personally delivered, (ii) one (1) day after being sent by overnight delivery or
telecopy providing  confirmation or receipt of delivery, or (iii) three (3) days
after being sent by certified or registered  mail,  postage and charges prepaid,
return receipt  requested,  to the applicable  party at the addresses  indicated
below:

                                       9
<PAGE>

         If to the Company:
         -----------------

                  Karts International Incorporated
                  P. O. Box 695
                  62204 Commercial Street
                  Roseland, Louisiana 70456
                  Attention:  President
                  Telephone: 504-747-1111
                  Telecopy:   504-747-2700

         With a copy to:
         --------------

                  Rick Gudner, Esq.
                  Jackson Walker, L.L.P.
                  901 Main Street, Suite 6000
                  Dallas, Texas 75202
                  Telephone: 214-953-6167
                  Telecopy:   214-953-5822

         If to the Investors:
         -------------------

                  The Schlinger Foundation
                  1944 Edison Street
                  Santa Ynez, California 93460
                  Attention: Evert Schlinger
                  Telephone: 905-686-1618
                  Telecopy:   905-686-1618
                  E-mail: ____________________

         With a copy to:
         --------------

                  Jenkens & Gilchrist, a Professional Corporation
                  1445 Ross Avenue, Suite 3200
                  Dallas, Texas 75202
                  Attention: W. Alan Kailer, Esq.
                  Telephone: 214-855-4361
                  Telecopy: 214-855-4300
                  E-mail: akailer@jenkens.com

or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written  notice to the other  parties  complying as to delivery
with the terms of this paragraph (a).

                  (b) This Agreement and the legal relations between the parties
arising  hereunder  shall be governed by and  interpreted in accordance with the
laws  of the  State  of  Texas.  The  parties  hereto  agree  to  submit  to the
jurisdiction  of the federal and state courts of the State of Texas with respect
to the breach or  interpretation of this Agreement or the enforcement of any and
all  rights,  duties,  liabilities,  obligations,  powers,  and other  relations
between the parties arising under this Agreement.

                  (c) This  Agreement,  the Purchase  Agreement,  including  all
exhibits,  schedules and attachments  thereto, and all other agreements executed
in  connection   herewith  and   therewith,   constitute  the  full  and  entire
understanding  and agreement between the parties regarding the matters set forth
herein  and  therein.   Except  as  otherwise  expressly  provided  herein,  the
provisions  hereof  shall  inure to the  benefit  of,  and be  binding  upon the
successors, assigns, heirs, executors and administrators of the parties hereto.

                  (d)  This   Agreement   may  be  executed  in  any  number  of
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

                                       10
<PAGE>

                  (e) If any  provision  of this  Agreement  shall be held to be
illegal,   invalid   or   unenforceable,    such   illegality,   invalidity   or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal,  invalid or unenforceable  any other provision of this
Agreement,  and this  Agreement  shall be  carried  out as if any such  illegal,
invalid or unenforceable provision were not contained herein.

      [Remainder of page left blank intentionally; signature page follows]

                                       11
<PAGE>

         IN WITNESS  WHEREOF,  the parties hereto have caused this  Registration
Rights Agreement to be duly executed as of the date first set forth above.

                                THE COMPANY:

                                KARTS INTERNATIONAL INCORPORATED

                                By:    _________________________________________
                                Name:  Charles Brister

                                Title: President and CEO

                                THE INVESTORS:

                                THE SCHLINGER FOUNDATION

                                By:    _________________________________________
                                Name:  _________________________________________
                                Title: _________________________________________

                                       12

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