Document:

<PAGE>

                                                                     Exhibit 4.1

                 SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE

                                   AGREEMENT

                          Dated as of August 23, 2001

                                     among

                         SPEEDCOM WIRELESS CORPORATION

                                      and

                       THE PURCHASERS LISTED ON EXHIBIT A
<PAGE>

                               TABLE OF CONTENTS
                               -----------------
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                                                                                                    PAGE
                                                                                                    ----
<S>                                                                                                   <C>
ARTICLE I Purchase and Sale of Preferred Stock......................................................   1

     Section 1.1     Purchase and Sale of Stock.....................................................   1
     Section 1.2     The Conversion Shares..........................................................   1
     Section 1.3     Purchase Price and Closing.....................................................   2
     Section 1.4     Exchange of Series A Preferred Stock...........................................   2
     Section 1.5     Warrants.......................................................................   2

ARTICLE II Representations and Warranties...........................................................   3

     Section 2.1     Representations and Warranties of the Company..................................   3
     Section 2.2     Representations and Warranties of the Purchasers...............................  13

ARTICLE III Covenants...............................................................................  14

     Section 3.1     Securities Compliance..........................................................  14
     Section 3.2     Registration and Listing.......................................................  15
     Section 3.3     Inspection Rights..............................................................  15
     Section 3.4     Compliance with Laws...........................................................  15
     Section 3.5     Keeping of Records and Books of Account........................................  16
     Section 3.6     Reporting Requirements.........................................................  16
     Section 3.7     Amendments.....................................................................  16
     Section 3.8     Other Agreements...............................................................  16
     Section 3.9     Distributions..................................................................  16
     Section 3.10    Status of Dividends............................................................  16
     Section 3.11    Intentionally Omitted..........................................................  17
     Section 3.12    Future Financings; Right of First Offer and Refusal............................  17
     Section 3.13    Reservation of Shares..........................................................  19
     Section 3.14    Transfer Agent Instructions....................................................  19
     Section 3.15    H.C. Wainwright & Co., Inc.....................................................  19

ARTICLE IV Conditions                                                                                 20

     Section 4.1     Conditions Precedent to the Obligation of the Company to Sell the Shares.......  20
     Section 4.2     Conditions Precedent to the Obligation of the Purchasers to Purchase
                     the Shares.....................................................................  20

ARTICLE V Intentionally Omitted.....................................................................  23

ARTICLE VI Stock Certificate Legend.................................................................  23

     Section 6.1     Legend.........................................................................  23
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<S>                                                                                                   <C>
ARTICLE VII Intentionally Omitted...................................................................  24

ARTICLE VIII Indemnification........................................................................  24

     Section 8.1     General Indemnity..............................................................  24
     Section 8.2     Indemnification Procedure......................................................  24

ARTICLE IX Miscellaneous............................................................................  25

     Section 9.1     Fees and Expenses..............................................................  25
     Section 9.2     Specific Enforcement, Consent to Jurisdiction..................................  25
     Section 9.3     Entire Agreement; Amendment....................................................  26
     Section 9.4     Notices........................................................................  26
     Section 9.5     Waivers........................................................................  27
     Section 9.6     Headings.......................................................................  27
     Section 9.7     Successors and Assigns.........................................................  27
     Section 9.8     No Third Party Beneficiaries...................................................  27
     Section 9.9     Governing Law..................................................................  28
     Section 9.10    Survival.......................................................................  28
     Section 9.11    Counterparts...................................................................  28
     Section 9.12    Publicity......................................................................  28
     Section 9.13    Severability...................................................................  28
     Section 9.14    Further Assurances.............................................................  28
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                                     -ii-
<PAGE>

                 SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE

                                   AGREEMENT

     This SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (the
"Agreement") is dated as of August 23, 2001 by and among Speedcom Wireless
Corporation, a Delaware corporation (the "Company"), and each of the Purchasers
of shares of Series B Convertible Preferred Stock of the Company whose names are
set forth on Exhibit A hereto (individually, a "Purchaser" and collectively, the
"Purchasers").

     The parties hereto agree as follows:

                                   ARTICLE I

                      Purchase and Sale of Preferred Stock

          Section 1.1  Purchase and Sale of Stock.  Upon the following terms and
                       --------------------------
conditions, the Company shall issue and sell to the Purchasers and each of the
Purchasers shall purchase from the Company, the number of shares of the
Company's Series B Convertible Preferred Stock, par value $.001 per share (the
"Preferred Shares"), at a purchase price of $2.25 per share, set forth with
respect to such Purchaser on Exhibit A hereto. Upon the following terms and
conditions, the Purchasers shall be issued Series A Warrants, in substantially
the form attached hereto as Exhibit B-1 (the "Series A Warrants") and Series B
Warrants, in substantially the form attached hereto as Exhibit B-2 (the Series B
Warrants and, together with the Series A Warrants, the "Warrants"), to purchase
the Company's Common Stock, par value $.001 per share (the "Common Stock").  The
aggregate purchase price for the Preferred Shares and the Warrants shall be
$8,500,000.  A portion of the aggregate purchase price shall be paid with (i)
shares of Series A Preferred Stock issued by the Company in connection with the
Series A Preferred Stock Purchase Agreement dated June 29, 2001 (the "Series A
Preferred Stock"); (ii) subordinated promissory notes issued by the Company in
connection with the Note and Warrant Purchase Agreement dated April 13, 2001
(the "April Notes"); and (iii) promissory notes issued by the Company in
connection with the Note and Warrant Purchase Agreement dated June 11, 2001 (the
"June Notes"), in the amounts set forth next to each Purchaser's name on
Schedule 1.1 attached hereto.  The designation, rights, preferences and other
------------
terms and provisions of the Series B Convertible Preferred Stock are set forth
in the Certificate of Designation of the Relative Rights and Preferences of the
Series B Convertible Preferred Stock attached hereto as Exhibit C (the
"Certificate of Designation").  The Company and the Purchasers are executing and
delivering this Agreement in accordance with and in reliance upon the exemption
from securities registration afforded by Rule 506 of Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Securities
Act") or Section 4(2) of the Securities Act.

          Section 1.2  The Conversion Shares.  The Company has authorized and
                       ---------------------
has reserved and covenants to continue to reserve, free of preemptive rights and
other similar contractual rights of stockholders, a sufficient number of its
authorized but unissued shares of its Common Stock, to effect the conversion of
the Preferred Shares and exercise of the Warrants.
<PAGE>

Any shares of Common Stock issuable upon conversion of the Preferred Shares and
exercise of the Warrants (and such shares when issued) are herein referred to as
the "Conversion Shares" and the "Warrant Shares", respectively. The Preferred
Shares, the Conversion Shares and the Warrant Shares are sometimes collectively
referred to as the "Shares".

     Section 1.3  Purchase Price and Closing.  The Company agrees to issue and
                  --------------------------
 sellto the Purchasers and, in consideration of and in express reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
the Purchasers, severally but not jointly, agree to purchase that number of the
Preferred Shares and Warrants set forth opposite their respective names on
Exhibit A.  The aggregate purchase price of the Preferred Shares and Warrants
being acquired by each Purchaser is set forth opposite such Purchaser's name on
Exhibit A (for each such purchaser, the "Purchase Price" and collectively
referred to as the "Purchase Prices").  The Company acknowledges and agrees that
the Purchase Price for certain Purchasers for the Preferred Shares and Warrants
will be paid to the Company with shares of the Series A Preferred Stock, the
April Notes and/or the June Notes, as applicable, in the amounts set forth on
Schedule 1.1 attached hereto.  The closing of the purchase and sale of the
------------
Preferred Shares and Warrants to be acquired by the Purchasers from the Company
under this Agreement shall take place at the offices of Jenkens & Gilchrist
Parker Chapin LLP, The Chrysler Building, 405 Lexington Avenue, New York, New
York 10174 (the "Closing") at 10:00 a.m., New York time on (i) the date on which
the last to be fulfilled or waived of the conditions set forth in Article IV
hereof and applicable to such Closing shall be fulfilled or waived in accordance
herewith or (ii) at such other time and place or on such date as the Purchasers
and the Company may agree upon (the  "Closing Date").

     Section 1.4  Exchange of Series A Preferred Stock / Notes.  Prior to or
             --------------------------------------------
at the Closing, the Purchasers shall surrender to the Company stock certificates
representing their shares of Series A Preferred Stock, the April Notes and/or
June Notes, as applicable.  Upon the Closing, the Purchasers shall receive in
exchange for the surrender of the stock certificates representing shares of
Series A Preferred Stock, the April Notes and/or the June Notes, as applicable,
stock certificates representing their pro rata portion of the Preferred Shares.

     Section 1.5  Warrants. The Company agrees to issue to each of the
                  --------
Purchasers Series A Warrants and Series B Warrants to purchase the number of
shares of Common Stock set forth opposite such Purchaser's name on Exhibit A
hereto, such number of shares of Common Stock determined as follows: (a) the
Purchasers shall receive a Series A Warrant for the purchase of .80 shares of
Common Stock for each Preferred Share purchased and (b) the Purchasers shall
receive a Series B Warrant for the purchase of 1.189 shares of Common Stock for
each Preferred Share purchased. The Warrants shall have an exercise price equal
to the Warrant Price (as defined in the applicable Warrant). The Series A
Warrants shall expire on the fifth (5th) anniversary of the date of issuance and
the Series B Warrants shall expire twenty (20) trading days following the
release of the Company's audited financial statements for fiscal year 2001. The
Warrants shall provide for a cashless exercise until the Effectiveness Date (as
defined in the Registration Rights Agreement) of the Registration Statement.
<PAGE>

                                  ARTICLE II

                         Representations and Warranties

     Section 2.1  Representations and Warranties of the Company.  The Company
                  ---------------------------------------------
hereby makes the following representations and warranties to the Purchasers,
except as set forth in the Company's disclosure schedule delivered with this
Agreement as follows:

     (a)  Organization, Good Standing and Power.  The Company is a corporation
          -------------------------------------
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has the requisite corporate power to own, lease and operate its
properties and assets and to conduct its business as it is now being conducted.
The Company does not have any subsidiaries except as set forth in the Company's
Form 10-KSB for the year ended December 31, 2000, including the accompanying
financial statements (the "Form 10-KSB"), or in the Company's Form 10-QSB for
the fiscal quarters ended June 30, 2000, September 30, 2000 or March 31, 2001
(collectively, the "Form 10-QSB"), or on Schedule 2.1(a) hereto. The Company and
                                         ---------------
each such subsidiary is duly qualified as a foreign corporation to do business
and is in good standing in every jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary
except for any jurisdiction(s) (alone or in the aggregate) in which the failure
to be so qualified will not have a Material Adverse Effect (as defined in
Section 2.1(e) hereof) on the Company's financial condition.

     (b)  Authorization; Enforcement.  The Company has the requisite corporate
          --------------------------
power and authority to enter into and perform this Agreement, the Registration
Rights Agreement attached hereto as Exhibit D (the "Registration Rights
Agreement"), the Transfer Agent Instructions (as defined in Section 3.14), the
Certificate of Designation, and the Warrants (collectively, the "Transaction
Documents") and to issue and sell the Shares and the Warrants in accordance with
the terms hereof. The execution, delivery and performance of the Transaction
Documents and the Certificate of Designation by the Company and the consummation
by it of the transactions contemplated hereby and thereby have been duly and
validly authorized by all necessary corporate action, and no further consent or
authorization of the Company or its Board of Directors or stockholders is
required. This Agreement has been duly executed and delivered by the Company.
The other Transaction Documents will have been duly executed and delivered by
the Company at the Closing. Each of the Transaction Documents constitutes, or
shall constitute when executed and delivered, a valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship, receivership or
similar laws relating to, or affecting generally the enforcement of, creditor's
rights and remedies or by other equitable principles of general application.

      (c)  Capitalization.  The authorized capital stock of the Company and the
          --------------
shares thereof currently issued and outstanding as of June 29, 2001 are set
forth on Schedule 2.1(c) hereto. All of the outstanding shares of the Company's
         ---------------
Common Stock and Series B Convertible Preferred Stock have been duly and validly
authorized. Except as set forth in this Agreement and the Registration Rights
Agreement and as set forth in the Form 10-KSB, Form 10-QSB or on Schedule 2.1(c)
                                                                  --------------
hereto, no shares of Common Stock are entitled to preemptive

                                      -3-
<PAGE>

rights or registration rights and there are no outstanding options, warrants,
scrip, rights to subscribe to, call or commitments of any character whatsoever
relating to, or securities or rights convertible into, any shares of capital
stock of the Company. Furthermore, except as set forth in this Agreement and the
Registration Rights Agreement and as set forth in the Form 10-KSB, Form 10-QSB
or on Schedule 2.1(c), there are no contracts, commitments, understandings, or
      ---------------
arrangements by which the Company is or may become bound to issue additional
shares of the capital stock of the Company or options, securities or rights
convertible into shares of capital stock of the Company. Except for customary
transfer restrictions contained in agreements entered into by the Company in
order to sell restricted securities or as provided in the Form 10-KSB, Form 10-
QSB or on Schedule 2.1 (c) hereto, the Company is not a party to any granting
          ----------------
registration or anti-dilution rights to any person with respect to any of its
equity or debt securities. The Company is not a party to, and it has no
knowledge of, any agreement restricting the voting or transfer of any shares of
the capital stock of the Company. Except as set forth in the Form 10-KSB, Form
10-QSB or on Schedule 2.1(c) hereto, the offer and sale of all capital stock,
             ---------------
convertible securities, rights, warrants, or options of the Company issued prior
to the Closing complied with all applicable Federal and state securities laws,
and no stockholder has a right of rescission or claim for damages with respect
thereto which would have a Material Adverse Effect (as defined below) on the
Company's financial condition or operating results. The Company has furnished or
made available to the Purchasers true and correct copies of the Company's
Certificate of Incorporation as in effect on the date hereof (the
"Certificate"), and the Company's Bylaws as in effect on the date hereof (the
"Bylaws"). For the purposes of this Agreement, "Material Adverse Effect" means
any adverse effect on the business, operations, properties, prospects, or
financial condition of the Company or its subsidiaries and which is material to
such entity or other entities controlling or controlled by such entity.

     (d)  Issuance of Shares.  The Preferred Shares and the Warrants to be
          ------------------
issued at the Closing have been duly authorized by all necessary corporate
action and the Preferred Shares, when paid for or issued in accordance with the
terms hereof, shall be validly issued and outstanding, fully paid and
nonassessable and entitled to the rights and preferences set forth in the
Certificate of Designation. When the Conversion Shares and the Warrant Shares
are issued in accordance with the terms of the Preferred Shares as set forth in
the Certificate of Designation and the Warrants, respectively, such shares will
be duly authorized by all necessary corporate action and validly issued and
outstanding, fully paid and nonassessable, and the holders shall be entitled to
all rights accorded to a holder of Common Stock.

     (e)  No Conflicts.  Except as disclosed in Schedule 2.1(e) hereto, the
          ------------                          ---------------
execution, delivery and performance of the Transaction Documents by the Company,
the performance by the Company of its obligations under the Certificate of
Designation and the consummation by the Company of the transactions contemplated
herein and therein do not and will not (i) violate any provision of the
Company's Certificate or Bylaws, (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond,
license, lease agreement, instrument or obligation to which the Company is a
party or by which it or its properties or assets are bound, (iii) create or
impose a lien, mortgage, security interest, charge or encumbrance of any nature
on any property of the Company under any agreement or any

                                      -4-
<PAGE>

commitment to which the Company is a party or by which the Company is bound or
by which any of its respective properties or assets are bound, or (iv) result in
a violation of any federal, state, local or foreign statute, rule, regulation,
order, judgment or decree (including Federal and state securities laws and
regulations) applicable to the Company or any of its subsidiaries or by which
any property or asset of the Company or any of its subsidiaries are bound or
affected, except, in all cases other than violations pursuant to clauses (i) and
(iv) above, for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect. The business of the Company and its
subsidiaries is not being conducted in violation of any laws, ordinances or
regulations of any governmental entity, except for possible violations which
singularly or in the aggregate do not and will not have a Material Adverse
Effect. The Company is not required under Federal, state or local law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under the Transaction
Documents or the Certificate of Designation, or issue and sell the Preferred
Shares, the Warrants, the Conversion Shares and the Warrant Shares in accordance
with the terms hereof or thereof (other than any filings which may be required
to be made by the Company with the Commission or state securities administrators
subsequent to the Closing, any registration statement which may be filed
pursuant hereto, and the Certificate of Designation); provided that, for
                                                      --------
purposes of the representation made in this sentence, the Company is assuming
and relying upon the accuracy of the relevant representations and agreements of
the Purchasers herein.

     (f)  Commission Documents, Financial Statements.  The Common Stock of the
          ------------------------------------------
Company is registered pursuant to Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, except as disclosed
in the Form 10-KSB, Form 10-QSB or on Schedule 2.1(f) hereto, since March 31,
                                      ---------------
2001, the Company has timely filed all reports, schedules, forms, statements and
other documents required to be filed by it with the Commission pursuant to the
reporting requirements of the Exchange Act, including material filed pursuant to
Section 13(a) or 15(d) of the Exchange Act (all of the foregoing including
filings incorporated by reference therein being referred to herein as the
"Commission Documents"). The Company has delivered or made available to each of
the Purchasers true and complete copies of the Commission Documents filed with
the Commission since March 31, 2001. The Company has not provided to the
Purchasers any material non-public information or other information which,
according to applicable law, rule or regulation, was required to have been
disclosed publicly by the Company but which has not been so disclosed, other
than with respect to the transactions contemplated by this Agreement. As of
their respective dates, the Form 10-KSB and the Form 10-QSB complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder and other federal, state
and local laws, rules and regulations applicable to such documents, and, as of
their respective dates, none of the Form 10-KSB and the Form 10-QSB contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the Commission
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial statements
have been prepared in

                                      -5-
<PAGE>

accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes or
may be condensed or summary statements), and fairly present in all material
respects the financial position of the Company and its subsidiaries as of the
dates thereof and the results of operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal year-end audit
adjustments).

     (g)  Subsidiaries.  The Form 10-KSB, Form 10-QSB or Schedule 2.1(g)
          ------------                                   ---------------
hereto sets forth each subsidiary of the Company, showing the jurisdiction of
its incorporation or organization and showing the percentage of each person's
ownership of the outstanding stock or other interests of such subsidiary. For
the purposes of this Agreement, "subsidiary" shall mean any corporation or other
entity of which at least a majority of the securities or other ownership
interest having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by the Company and/or any of its other
subsidiaries. All of the outstanding shares of capital stock of each subsidiary
have been duly authorized and validly issued, and are fully paid and
nonassessable. There are no outstanding preemptive, conversion or other rights,
options, warrants or agreements granted or issued by or binding upon any
subsidiary for the purchase or acquisition of any shares of capital stock of any
subsidiary or any other securities convertible into, exchangeable for or
evidencing the rights to subscribe for any shares of such capital stock. Neither
the Company nor any subsidiary is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of the
capital stock of any subsidiary or any convertible securities, rights, warrants
or options of the type described in the preceding sentence. Neither the Company
nor any subsidiary is party to, nor has any knowledge of, any agreement
restricting the voting or transfer of any shares of the capital stock of any
subsidiary.

     (h)  No Material Adverse Change.  Since March 31, 2001, the date through
          --------------------------
which the most recent quarterly report of the Company on Form 10-QSB has been
prepared and filed with the Commission, a copy of which is included in the
Commission Documents, the Company has not experienced or suffered any Material
Adverse Effect, except as disclosed on Schedule 2.1(h) hereto.
                                       ---------------

     (i)  No Undisclosed Liabilities.  Except as disclosed in the Form 10-KSB,
          --------------------------
Form     10-QSB or on Schedule 2.1(i)  hereto, neither the Company nor any of
                      ---------------
its subsidiaries has any liabilities, obligations, claims or losses (whether
liquidated or unliquidated, secured or unsecured, absolute, accrued, contingent
or otherwise) other than those incurred in the ordinary course of the Company's
or its subsidiaries respective businesses since March 31, 2001 and which,
individually or in the aggregate, do not or would not have a Material Adverse
Effect on the Company or its subsidiaries.

     (j)  No Undisclosed Events or Circumstances.  No event or circumstance has
          --------------------------------------
occurred or exists with respect to the Company or its subsidiaries or their
respective businesses, properties, prospects, operations or financial condition,
which, under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.

                                      -6-
<PAGE>

     (k)  Indebtedness.  The Form 10-KSB, Form 10-QSB or Schedule 2.1(k)
          ------------                                   ---------------
hereto sets forth as of the date hereof all outstanding secured and unsecured
Indebtedness of the Company or any subsidiary, or for which the Company or any
subsidiary has commitments. For the purposes of this Agreement, "Indebtedness"
shall mean (a) any liabilities for borrowed money or amounts owed in excess of
$100,000 (other than trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations in
respect of Indebtedness of others, whether or not the same are or should be
reflected in the Company's balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $25,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor any subsidiary is
in default with respect to any Indebtedness.

     (l)  Title to Assets.  Each of the Company and the subsidiaries has good
          ---------------
marketable title to all of its real and personal property reflected in the
Commission Documents, free and clear of any mortgages, pledges, charges, liens,
security interests or other encumbrances, except for those indicated in the Form
10-KSB, Form 10-QSB or on Schedule 2.1(l) hereto or such that, individually or
                          ---------------
in the aggregate, do not cause a Material Adverse Effect on the Company's
financial condition or operating results. All said leases of the Company and
each of its subsidiaries are valid and subsisting and in full force and effect.

     (m) Actions Pending. There is no action, suit, claim, investigation,
         ---------------
arbitration, alternate dispute resolution proceeding or any other proceeding
pending or, to the knowledge of the Company, threatened against the Company or
any subsidiary which questions the validity of this Agreement or any of the
other Transaction Documents or the transactions contemplated hereby or thereby
or any action taken or to be taken pursuant hereto or thereto. Except as set
forth in the Form 10-KSB, Form 10-QSB or on Schedule 2.1(m) hereto, there is no
                                            ---------------
action, suit, claim, investigation, arbitration, alternate dispute resolution
proceeding or any other proceeding pending or, to the knowledge of the Company,
threatened, against or involving the Company, any subsidiary or any of their
respective properties or assets. Except as set forth in the Form 10-KSB, Form
QSB or Schedule 2.1(m) hereto, there are no outstanding orders, judgments,
        ---------------
injunctions, awards or decrees of any court, arbitrator or governmental or
regulatory body against the Company or any subsidiary or any officers or
directors of the Company or subsidiary in their capacities as such.

     (n)  Compliance with Law.  The business of the Company and the
          -------------------
subsidiaries has been and is presently being conducted in accordance with all
applicable federal, state and local governmental laws, rules, regulations and
ordinances, except as set forth in the Form 10-KSB, Form 10-QSB, on Schedule
                                                                    --------
2.1(n) hereto or such that, individually or in the aggregate, do
------
not cause a Material Adverse Effect. The Company and each of its subsidiaries
have all franchises, permits, licenses, consents and other governmental or
regulatory authorizations and approvals necessary for the conduct of its
business as now being conducted by it unless the failure to possess such
franchises, permits, licenses, consents and other governmental or regulatory
authorizations and approvals, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

                                      -7-
<PAGE>

     (o)  Taxes.  Except as set forth in the Form 10-KSB, Form 10-QSB or on
          -----
Schedule 2.1(o) hereto, the Company and each of the subsidiaries has accurately
prepared and filed all federal, state and other tax returns required by law to
be filed by it, has paid or made provisions for the payment of all taxes shown
to be due and all additional assessments, and adequate provisions have been and
are reflected in the financial statements of the Company and the subsidiaries
for all current taxes and other charges to which the Company or any subsidiary
is subject and which are not currently due and payable. Except as disclosed on
Schedule 2.1(o) hereto, none of the federal income tax returns of the Company or
---------------
any subsidiary have been audited by the Internal Revenue Service. The Company
has no knowledge of any additional assessments, adjustments or contingent tax
liability (whether federal or state) of any nature whatsoever, whether pending
or threatened against the Company or any subsidiary for any period, nor of any
basis for any such assessment, adjustment or contingency.

     (p)  Certain Fees.  Except as set forth in this Agreement or on Schedule
          ------------                                               --------
2.1(p) hereto, no brokers, finders or financial advisory fees or commissions
will be payable by the Company or any subsidiary or any Purchaser with respect
to the transactions contemplated by this Agreement.

     (q)  Disclosure.  To the best of the Company's knowledge, neither this
          ----------
Agreement or the Schedules hereto nor any other documents, certificates or
instruments furnished to the Purchasers by or on behalf of the Company or any
subsidiary in connection with the transactions contemplated by this Agreement
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made herein or therein, in the light
of the circumstances under which they were made herein or therein, not
misleading.

     (r)  Operation of Business.  The Company and each of the subsidiaries
          ---------------------
owns or possesses all patents, trademarks, domain names (whether or not
registered) and any patentable improvements or copyrightable derivative works
thereof, websites and intellectual property rights relating thereto, service
marks, trade names, copyrights, licenses and authorizations as set forth in the
Form 10-KSB, Form 10-QSB and on Schedule 2.1(r) hereto, and all rights with
                                ---------------
respect to the foregoing, which are necessary for the conduct of its business as
now conducted without any conflict with the rights of others.

     (s)  Environmental Compliance.  The Company and each of its subsidiaries
          ------------------------
have obtained all material approvals, authorization, certificates, consents,
licenses, orders and permits or other similar authorizations of all governmental
authorities, or from any other person, that are required under any Environmental
Laws. The Form 10-KSB or Form 10-QSB sets forth all material permits, licenses
and other authorizations issued under any Environmental Laws to the Company or
its subsidiaries. "Environmental Laws" shall mean all applicable laws relating
to the protection of the environment including, without limitation, all
requirements pertaining to reporting, licensing, permitting, controlling,
investigating or remediating emissions, discharges, releases or threatened
releases of hazardous substances, chemical substances, pollutants, contaminants
or toxic substances, materials or wastes, whether solid, liquid or gaseous in
nature, into the air, surface water, groundwater or land, or relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of hazardous substances, chemical substances, pollutants,
contaminants or toxic substances, material or wastes, whether

                                      -8-
<PAGE>

solid, liquid or gaseous in nature. The Company has all necessary governmental
approvals required under all Environmental Laws and used in its business or in
the business of any of its subsidiaries. The Company and each of its
subsidiaries are also in compliance with all other limitations, restrictions,
conditions, standards, requirements, schedules and timetables required or
imposed under all Environmental Laws. Except for such instances as would not
individually or in the aggregate have a Material Adverse Effect, there are no
past or present events, conditions, circumstances, incidents, actions or
omissions relating to or in any way affecting the Company or its subsidiaries
that violate or may violate any Environmental Law after the Closing Date or that
may give rise to any environmental liability, or otherwise form the basis of any
claim, action, demand, suit, proceeding, hearing, study or investigation (i)
under any Environmental Law, or (ii) based on or related to the manufacture,
processing, distribution, use, treatment, storage (including without limitation
underground storage tanks), disposal, transport or handling, or the emission,
discharge, release or threatened release of any hazardous substance.
"Environmental Liabilities" means all liabilities of a person (whether such
liabilities are owed by such person to governmental authorities, third parties
or otherwise) whether currently in existence or arising hereafter which arise
under or relate to any Environmental Law.

     (t)  Books and Record Internal Accounting Controls.  The records and
          ---------------------------------------------
documents of the Company and its subsidiaries accurately reflect in all material
respects the information relating to the business of the Company and the
subsidiaries, the location and collection of their assets, and the nature of all
transactions giving rise to the obligations or accounts receivable of the
Company or any subsidiary. The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient, in the judgment of the
Company's board of directors, to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate actions is taken
with respect to any differences.

     (u)  Material Agreements.  Except as set forth in the Form 10-KSB, Form
          -------------------
10-QSB or on Schedule 2.1(u) hereto, neither the Company nor any subsidiary is a
             ---------------
party to any written or oral contract, instrument, agreement, commitment,
obligation, plan or arrangement, a copy of which would be required to be
filed with the Commission as an exhibit to a registration statement on Form S-3
or applicable form (collectively, "Material Agreements") if the Company or any
subsidiary were registering securities under the Securities Act. The Company and
each of its subsidiaries has in all material respects performed all the
obligations required to be performed by them to date under the foregoing
agreements, have received no notice of default and, to the best of the Company's
knowledge are not in default under any Material Agreement now in effect, the
result of which could cause a Material Adverse Effect. No written or oral
contract, instrument, agreement, commitment, obligation, plan or arrangement of
the Company or of any subsidiary limits or shall limit the payment of dividends
on the Company's Preferred Shares, other Preferred Stock, if any, or its Common
Stock.

                                      -9-
<PAGE>

     (v)  Transactions with Affiliates.  Except as set forth in the Form
          ----------------------------
10-KSB, Form10-QSB or on Schedule 2.1(v) hereto, there are no loans, leases,
                         ---------------
agreements, contracts, royalty agreements, management contracts or arrangements
or other continuing transactions between (a) the Company, any subsidiary or any
of their respective customers or suppliers on the one hand, and (b) on the other
hand, any officer, employee, consultant or director of the Company, or any of
its subsidiaries, or any person owning any capital stock of the Company or any
subsidiary or any member of the immediate family of such officer, employee,
consultant, director or stockholder or any corporation or other entity
controlled by such officer, employee, consultant, director or stockholder, or a
member of the immediate family of such officer, employee, consultant, director
or stockholder.

     (w)  Securities Act of 1933.  Based in material part upon the
          ----------------------
representations herein of the Purchasers, the Company has complied and will
comply with all applicable federal and state securities laws in connection with
the offer, issuance and sale of the Shares and the Warrants hereunder. Neither
the Company nor anyone acting on its behalf, directly or indirectly, has or will
sell, offer to sell or solicit offers to buy any of the Shares, the Warrants or
similar securities to, or solicit offers with respect thereto from, or enter
into any preliminary conversations or negotiations relating thereto with, any
person, or has taken or will take any action so as to bring the issuance and
sale of any of the Shares and the Warrants under the registration provisions of
the Securities Act and applicable state securities laws, and neither the Company
nor any of its affiliates, nor any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) in connection with the offer
or sale of any of the Shares and the Warrants.

     (x)  Governmental Approvals.  Except as set forth in the Form 10-KSB or
          ----------------------
Form 10-QSB, and except for the filing of any notice prior or subsequent to the
Closing Date that may be required under applicable state and/or Federal
securities laws (which if required, shall be filed on a timely basis), including
the filing of a registration statement or statements pursuant to the
Registration Rights Agreement, and the filing of the Certificate of Designation
with the Secretary of State for the State of Delaware, no authorization,
consent, approval, license, exemption of, filing or registration with any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, is or will be necessary for, or in
connection with, the execution or delivery of the Preferred Shares and the
Warrants, or for the performance by the Company of its obligations under the
Transaction Documents or the Certificate of Designation.

     (y)  Employees.  Neither the Company nor any subsidiary has any collective
          ---------
bargaining arrangements or agreements covering any of its employees, except as
set forth in the Form 10-KSB, Form 10-QSB or on Schedule 2.1(y) hereto.  Except
                                                ---------------
as set forth in the Form 10-KSB, Form 10-QSB or on Schedule 2.1(y) hereto,
                                                   ---------------
neither the Company nor any subsidiary has any employment contract, agreement
regarding proprietary information, non-competition agreement, non-solicitation
agreement, confidentiality agreement, or any other similar contract or
restrictive convenant, relating to the right of any officer, employee or
consultant to be employed or engaged by the Company or such subsidiary. Since
March 31, 2001, no officer, consultant or key employee of the Company or any
subsidiary whose termination, either individually or in the aggregate, could
have a Material Adverse Effect, has terminated or, to the

                                     -10-
<PAGE>

knowledge of the Company, has any present intention of terminating his or her
employment or engagement with the Company or any subsidiary.

     (z)  Absence of Certain Developments.  Except as provided in Form 10-KSB,
          -------------------------------
10-QSB or in Schedule 2.1(z) hereto, since March 31, 2001, neither the Company
           ---------------
nor any subsidiary has:

          (i)   issued any stock, bonds or other corporate securities or any
rights, options or warrants with respect thereto;

          (ii)  borrowed any amount or incurred or become subject to any
liabilities (absolute or contingent) except current liabilities incurred in the
ordinary course of business which are comparable in nature and amount to the
current liabilities incurred in the ordinary course of business during the
comparable portion of its prior fiscal year, as adjusted to reflect the current
nature and volume of the Company's or such subsidiary's business;

          (iii)  discharged or satisfied any lien or encumbrance or paid any
obligation or liability (absolute or contingent), other than current liabilities
paid in the ordinary course of business;

          (iv)   declared or made any payment or distribution of cash or other
property to stockholders with respect to its stock, or purchased or redeemed, or
made any agreements so to purchase or redeem, any shares of its capital stock;

          (v)    sold, assigned or transferred any other tangible assets, or
canceled any debts or claims, except in the ordinary course of business;

          (vi)   sold, assigned or transferred any patent rights, trademarks,
trade names, copyrights, trade secrets or other intangible assets or
intellectual property rights, or disclosed any proprietary confidential
information to any person except to customers in the ordinary course of business
or to the Purchasers or their representatives;

          (vii)  suffered any substantial losses or waived any rights of
material value, whether or not in the ordinary course of business, or suffered
the loss of any material amount of prospective business;

          (viii) made any changes in employee compensation except in the
ordinary course of business and consistent with past practices;

          (ix)   made capital expenditures or commitments therefor that
aggregate in excess of $100,000;

          (x)    entered into any other transaction other than in the ordinary
course of business, or entered into any other material transaction, whether or
not in the ordinary course of business;

          (xi)   made charitable contributions or pledges in excess of $25,000;

                                     -11-
<PAGE>

          (xii)  suffered any material damage, destruction or casualty loss,
whether or not covered by insurance;

          (xiii)  experienced any material problems with labor or management in
connection with the terms and conditions of their employment;

          (xiv)   effected any two or more events of the foregoing kind which in
the aggregate would be material to the Company or its subsidiaries; or

          (xv)    entered into an agreement, written or otherwise, to take any
of the foregoing actions.

     (aa) Use of Proceeds.  The proceeds from the sale of the Preferred Shares
          ---------------
will be used by the Company for working capital and general corporate purposes.

     (bb) Public Utility Holding Company Act and Investment Company Act Status.
          --------------------------------------------------------------------
The Company is not a "holding company" or a "public utility company" as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
The Company is not, and as a result of and immediately upon the Closing will not
be, an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.

     (cc) ERISA.  No liability to the Pension Benefit Guaranty Corporation has
          -----
been incurred with respect to any Plan by the Company or any of its subsidiaries
which is or would be materially adverse to the Company and its subsidiaries. The
execution and delivery of this Agreement and the issue and sale of the Preferred
Shares will not involve any transaction which is subject to the prohibitions of
Section 406 of ERISA or in connection with which a tax could be imposed pursuant
to Section 4975 of the Internal Revenue Code of 1986, as amended, provided that,
if any of the Purchasers, or any person or entity that owns a beneficial
interest in any of the Purchasers, is an "employee pension benefit plan" (within
the meaning of Section 3(2) of ERISA) with respect to which the Company is a
"party in interest" (within the meaning of Section 3(14) of ERISA), the
requirements of Sections 407(d)(5) and 408(e) of ERISA, if applicable, are met.
As used in this Section 2.1(ac), the term "Plan" shall mean an "employee pension
benefit plan" (as defined in Section 3 of ERISA) which is or has been
established or maintained, or to which contributions are or have been made, by
the Company or any subsidiary or by any trade or business, whether or not
incorporated, which, together with the Company or any subsidiary, is under
common control, as described in Section 414(b) or (c) of the Code.

     (dd) Dilutive Effect.  The Company understands and acknowledges that the
          ---------------
number of Conversion Shares issuable upon conversion of the Preferred Shares and
the Warrant Shares issuable upon exercise of the Warrants will increase in
certain circumstances. The Company further acknowledges that its obligation to
issue Conversion Shares upon conversion of the Preferred Shares in accordance
with this Agreement and the Certificate of Designation and its obligations to
issue the Warrant Shares upon the exercise of the Warrants in accordance with
this Agreement and the Warrants, is, in each case, absolute and unconditional
regardless of the

                                     -12-
<PAGE>

dilutive effect that such issuance may have on the ownership interest of other
stockholders of the Company.

          Section 2.2  Representations and Warranties of the Purchasers.  Each
                       ------------------------------------------------
of the Purchasers hereby makes the following representations and warranties to
the Company with respect solely to itself and not with respect to any other
Purchaser:

          (a)  Organization and Standing of the Purchasers.  If the Purchaser
               -------------------------------------------
is an entity, such Purchaser is a corporation or partnership duly incorporated
or organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization.

          (b)  Authorization and Power.  The Purchaser has the requisite power
               -----------------------
and authority to enter into and perform this Agreement and to purchase the
Preferred Shares being sold to it hereunder. The execution, delivery and
performance of this Agreement and the Registration Rights Agreement by such
Purchaser and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate or partnership
action (if the Purchaser is an entity), and no further consent or authorization
of such Purchaser or its Board of Directors, stockholders, or partners, as the
case may be, is required. Each of this Agreement and the Registration Rights
Agreement has been duly authorized, executed and delivered by such Purchaser.

          (c)  No Conflicts.  The execution, delivery and performance of this
               ------------
Agreement and the Registration Rights Agreement and the consummation by such
Purchaser of the transactions contemplated hereby and thereby or relating hereto
do not and will not (i) result in a violation of such Purchaser's charter
documents or bylaws or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of any agreement, indenture or instrument to which such Purchaser
is a party, or result in a violation of any law, rule, or regulation, or any
order, judgment or decree of any court or governmental agency applicable to such
Purchaser or its properties (except for such conflicts, defaults and violations
as would not, individually or in the aggregate, have a material adverse effect
on such Purchaser). Such Purchaser is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
obligations under this Agreement or the Registration Rights Agreement or to
purchase the Preferred Shares or acquire the Warrants in accordance with the
terms hereof, provided that for purposes of the representation made in this
sentence, such Purchaser is assuming and relying upon the accuracy of the
relevant representations and agreements of the Company herein.

          (d)  Acquisition for Investment.  Such Purchaser is acquiring the
               --------------------------
Preferred Shares and the Warrants solely for its own account for the purpose of
investment and not with a view to or for sale in connection with distribution.
Such Purchaser does not have a present intention to sell the Preferred Shares or
the Warrants, nor a present arrangement (whether or not legally binding) or
intention to effect any distribution of the Preferred Shares or the Warrants to
or through any person or entity; provided, however, that by making the
                                 --------  -------
representations herein and subject to Section 2.2(f) below, such Purchaser does
not agree to hold the Shares or the

                                     -13-
<PAGE>

Warrants for any minimum or other specific term and reserves the right to
dispose of the Shares or the Warrants at any time in accordance with Federal and
state securities laws applicable to such disposition. Such Purchaser
acknowledges that it is able to bear the financial risks associated with an
investment in the Preferred Shares and the Warrants and that it has been given
full access to such records of the Company and the subsidiaries and to the
officers of the Company and the subsidiaries and received such information as it
has deemed necessary or appropriate to conduct its due diligence investigation.

          (e)  Accredited Purchasers.  Such Purchaser is an "accredited
               ---------------------
investor" as defined in Regulation D promulgated under the Securities Act.

          (f)  Rule 144.  Such Purchaser understands that the Shares must be
               --------
held indefinitely unless such Shares are registered under the Securities Act or
an exemption from registration is available. Such Purchaser acknowledges that
such Purchaser is familiar with Rule 144 of the rules and regulations of the
Commission, as amended, promulgated pursuant to the Securities Act ("Rule 144"),
and that such person has been advised that Rule 144 permits resales only under
certain circumstances. Such Purchaser understands that to the extent that Rule
144 is not available, such Purchaser will be unable to sell any Shares without
either registration under the Securities Act or the existence of another
exemption from such registration requirement.

          (g)  General.  Such Purchaser understands that the Shares are being
               -------
offered and sold in reliance on a transactional exemption from the registration
requirement of Federal and state securities laws and the Company is relying upon
the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the applicability of such exemptions and the suitability of such
Purchaser to acquire the Shares.

          (h)  Residence.  Such Purchaser's permanent domicile is as set forth
               ---------
in Exhibit A.

                                  ARTICLE III

                                   Covenants

     The Company covenants with each of the Purchasers as follows, which
covenants are for the benefit of the Purchasers and their permitted assignees
(as defined herein).

          Section 3.1  Securities Compliance.
                       ---------------------

          (a)  The Company shall notify the Commission in accordance with their
rules and regulations, of the transactions contemplated by any of the
Transaction Documents, including filing a Form D with respect to the Preferred
Shares, Warrants, Conversion Shares and Warrant Shares as required under
Regulation D, and shall take all other necessary action and proceedings as may
be required and permitted by applicable law, rule and regulation, for the legal
and valid issuance of the Preferred Shares, the Warrants, the Conversion Shares
and the Warrant Shares to the Purchasers or subsequent holders.

                                     -14-
<PAGE>

          (b)  The Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
such Purchasers set forth herein in order to determine the applicability of
Federal and state securities laws exemptions and the suitability of such
Purchasers to acquire the Preferred Shares.

          (c)  The Company covenants and agrees that it will not issue any
shares of the Common Stock to a Purchaser which would result in the issuance
under this Agreement of more than 19.9% of the issued and outstanding shares of
the Common Stock as of the date hereof, unless such issuance has been duly
approved by the shareholders of the Company.

          (d)  Unless waived by a Purchaser by means of providing sixty (60)
days notice to the Company, the Company covenants and agrees that the number of
Conversion Shares issuable upon conversion of the Preferred Shares and the
number of Warrant Shares issuable upon any exercise of such Warrant by a
Purchaser shall not exceed the number of such shares that, when aggregated with
all other shares of Common Stock then owned by a Purchaser beneficially or
deemed beneficially owned by a Purchaser, would result in a Purchaser owning
more than 4.99% of all of such Common Stock as would be outstanding on such date
of conversion or such date of exercise of the Warrant, as determined in
accordance with Section 16 of the Exchange Act and the regulations promulgated
thereunder.

          Section 3.2  Registration and Listing.  The Company will cause its
                       ------------------------
to continue to be registered under Sections 12(b) or 12(g) of the Exchange Act,
will comply in all respects with its reporting and filing obligations under the
Exchange Act, will comply with all requirements related to any registration
statement filed pursuant to this Agreement or the Registration Rights Agreement,
and will not take any action or file any document (whether or not permitted by
the Securities Act or the rules promulgated thereunder) to terminate or suspend
such registration or to terminate or suspend its reporting and filing
obligations under the Exchange Act or Securities Act, except as permitted
herein.  The Company will take all action necessary to continue the listing or
trading of its Common Stock on the over-the-counter electronic bulletin board.

          Section 3.3  Inspection Rights.  The Company shall permit, during
                       -----------------
normal business hours and upon reasonable request and reasonable notice, each
Purchaser or any employees, agents or representatives thereof, so long as such
Purchaser shall be obligated hereunder to purchase the Preferred Shares or shall
beneficially own any Preferred Shares, or shall own Conversion Shares which, in
the aggregate, represent more than 2% of the total combined voting power of all
voting securities then outstanding, for purposes reasonably related to such
Purchaser's interests as a stockholder to examine and make reasonable copies of
and extracts from the records and books of account of, and visit and inspect the
properties, assets, operations and business of the Company and any subsidiary,
and to discuss the affairs, finances and accounts of the Company and any
subsidiary with any of its officers, consultants, directors, and key employees.

          Section 3.4  Compliance with Laws.  The Company shall comply, and
                       --------------------
cause each subsidiary to comply, with all applicable laws, rules, regulations
and orders, noncompliance with which could have a Material Adverse Effect.

                                     -15-
<PAGE>

          Section 3.5 Keeping of Records and Books of Account. The Company shall
                      ---------------------------------------
keep and cause each subsidiary to keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP consistently
applied, reflecting all financial transactions of the Company and its
subsidiaries, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection with its business shall be made.

          Section 3.6 Reporting Requirements. If the Company ceases to file its
                      ----------------------
periodic reports with the Commission, or if the Commission ceases making these
periodic reports available via the Internet without charge, then the Company
shall furnish the following to each Purchaser so long as such Purchaser shall be
obligated hereunder to purchase the Preferred Shares or shall beneficially own
any Preferred Shares, or shall own Conversion Shares which, in the aggregate,
represent more than 2% of the total combined voting power of all voting
securities then outstanding:

          (a)  Quarterly Reports filed with the Commission on Form 10-QSB as
soon as available, and in any event within forty-five (45) days after the end of
each of the first three fiscal quarters of the Company;

          (b)  Annual Reports filed with the Commission on Form 10-KSB as soon
as and in any event within ninety (90) days after the end of each fiscal year of
the Company; and

          (c)  Copies of all notices and information, including without
limitation notices and proxy statements in connection with any meetings, that
are provided to holders of shares of Common Stock, contemporaneously with the
delivery of such notices or information to such holders of Common Stock.

          Section 3.7 Amendments. The Company shall not amend or waive any
                      ----------
provision of the Certificate or Bylaws of the Company, or Registration Rights
Agreement in any way that would adversely affect the liquidation preferences,
dividends rights, conversion rights, voting rights or redemption rights of the
holders of the Preferred Shares.

          Section 3.8 Other Agreements. The Company shall not enter into any
                      ----------------
agreement in which the terms of such agreement would restrict or impair the
right or ability to perform of the Company or any subsidiary under any
Transaction Document or the Certificate of Designation.

          Section 3.9 Distributions. So long as any Preferred Shares or Warrants
                      -------------
remain outstanding, the Company agrees that it shall not (i) declare or pay any
dividends or make any distributions to any holder(s) of Common Stock or (ii)
purchase or otherwise acquire for value, directly or indirectly, any Common
Stock or other equity security of the Company.

          Section 3.10 Status of Dividends. The Company covenants and agrees
                       -------------------
that (i) no Federal income tax return or claim for refund of Federal income tax
or other submission to the Internal Revenue Service will adversely affect the
Preferred Shares, any other series of its

                                     -16-
<PAGE>

Preferred Stock, or the Common Stock, and any deduction shall not operate to
jeopardize the availability to Purchasers of the dividends received deduction
provided by Section 243(a)(1) of the Code or any successor provision, (ii) in no
report to shareholders or to any governmental body having jurisdiction over the
Company or otherwise will it treat the Preferred Shares other than as equity
capital or the dividends paid thereon other than as dividends paid on equity
capital unless required to do so by a governmental body having jurisdiction over
the accounts of the Company or by a change in generally accepted accounting
principles required as a result of action by an authoritative accounting
standards setting body, and (iii) other than pursuant to this Agreement or the
Certificate of Designation, it will take no action which would result in the
dividends paid by the Company on the Preferred Shares out of the Company's
current or accumulated earnings and profits being ineligible for the dividends
received deduction provided by Section 243(a)(1) of the Code. The preceding
sentence shall not be deemed to prevent the Company from designating the
Preferred Stock as "Convertible Preferred Stock" in its annual and quarterly
financial statements in accordance with its prior practice concerning other
series of preferred stock of the Company. Notwithstanding the foregoing, the
Company shall not be required to restate or modify its tax returns for periods
prior to the Closing Date. In the event that the Purchasers have reasonable
cause to believe that dividends paid by the Company on the Preferred Shares out
of the Company's current or accumulated earnings and profits will not be treated
as eligible for the dividends received deduction provided by Section 243(a)(1)
of the Code, or any successor provision, the Company will, at the reasonable
request of the Purchasers of 51% of the outstanding Preferred Shares, join with
the Purchasers in the submission to the Service of a request for a ruling that
dividends paid on the Shares will be so eligible for Federal income tax
purposes, at the Purchasers expense. In addition, the Company will reasonably
cooperate with the Purchasers (at Purchasers' expense) in any litigation, appeal
or other proceeding challenging or contesting any ruling, technical advice,
finding or determination that earnings and profits are not eligible for the
dividends received deduction provided by Section 243(a)(1) of the Code, or any
successor provision to the extent that the position to be taken in any such
litigation, appeal, or other proceeding is not contrary to any provision of the
Code or incurred in connection with any such submission, litigation, appeal or
other proceeding. Notwithstanding the foregoing, nothing herein contained shall
be deemed to preclude the Company from claiming a deduction with respect to such
dividends if (i) the Code shall hereafter be amended, or final Treasury
regulations thereunder are issued or modified, to provide that dividends on the
Preferred Shares or Conversion Shares should not be treated as dividends for
Federal income tax purposes or that a deduction with respect to all or a portion
of the dividends on the Shares is allowable for Federal income tax purposes, or
(ii) in the absence of such an amendment, issuance or modification and after a
submission of a request for ruling or technical advice, the service shall rule
or advise that dividends on the shares should not be treated as dividends for
Federal income tax purposes. If the Service determines that the Preferred Shares
or Conversion Shares constitute debt, the Company may file protective claims for
refund.

          Section 3.11 Intentionally Omitted.
                       ---------------------

          Section 3.12 Future Financings; Right of First Offer and Refusal. (a)
                       ---------------------------------------------------
During the period commencing on the Closing Date and ending on the one hundred
eightieth day after the Effectiveness Date (as defined in the Registraiton
Rights Agreement), the Company covenants and agrees that it will not, without
the prior written consent of the Purchasers, enter into

                                     -17-
<PAGE>

any subsequent offer or sale to, or exchange with (or other type of distribution
to), any third party (a "Subsequent Financing"), of Common Stock or any
securities convertible, exercisable or exchangeable into Common Stock, including
debt securities (collectively, the "Financing Securities") other than a
Permitted Financing (as defined hereinafter). For purposes of this Agreement,
"Permitted Financing" shall mean any transaction involving (i) the Company's
issuance of any Financing Securities (other than for cash) in connection with a
merger and/or acquisition, consolidation, sale or disposition of all or
substantially all of the Company's assets, (ii) the Company's issuance of
Financing Securities to bona fide strategic investors that provide the Company
with significant competitive advantages in the wireless products marketplace,
(iii) the Company's issuance of Financing Securities in exchange for
professional services, (iv) the Company's issuance of Common Stock or the
issuance of options to purchase Common Stock as such is related to any employee
stock ownership plan, (v) senior secured debt bank financing in an amount not to
exceed $500,000 in the aggregate, or (vi) any transaction where the first use of
proceeds from such transaction would be used to redeem all of the Preferred
Shares in accordance with Section 8(h) of the Certificate of Designation.

          (b)  Notwithstanding anything in the foregoing to the contrary, the
Company covenants and agrees that so long as any Preferred Shares are
outstanding, the Company will not, without the prior written consent of 65% of
the holders of the outstanding Preferred Shares, enter into any subsequent offer
or sale to, or exchange with (or other type of distribution to), any third
party, of any Financing Securities whether or not convertible or exchangeable
into Common Stock, ranking senior or pari passu to the Preferred Shares, except
that the Company may enter into a Permitted Financing.

          (c)  During the period commencing on the Closing Date and ending on
the first (1st) anniversary of the Effectiveness Date, the Company covenants and
agrees to promptly notify (in no event later than five (5) days after making or
receiving an applicable offer) in writing (a "Rights Notice") the Purchasers of
the terms and conditions of any proposed Subsequent Financing. The Rights Notice
shall describe, in reasonable detail, the proposed Subsequent Financing, the
proposed closing date of the Subsequent Financing, which shall be within thirty
(30) calendar days from the date of the Rights Notice, including, without
limitation, all of the terms and conditions thereof. The Rights Notice shall
provide the Purchasers an option (the "Rights Option") during the ten (10)
trading days following delivery of the Rights Notice (the "Option Period") to
inform the Company whether the Purchasers will purchase all or part of the
securities being offered in such Subsequent Financing on the same, absolute
terms and conditions as contemplated by such Subsequent Financing (the "First
Refusal Rights"). Delivery of any Rights Notice constitutes a representation and
warranty by the Company that there are no other material terms and conditions,
arrangements, agreements or otherwise except for those disclosed in the Rights
Notice, to provide additional compensation to any party participating in any
proposed Subsequent Financing, including, but not limited to, additional
compensation based on changes in the Purchase Price or any type of reset or
adjustment of a purchase or conversion price or to issue additional securities
at any time after the closing date of a Subsequent Financing. If the Company
does not receive notice of exercise of the Rights Option from the Purchasers
within the Option Period, the Company shall have the right to close the
Subsequent Financing on the scheduled closing date with a third party; provided
                                                                       --------
that all of the terms and conditions of the closing are the same as those
provided to the Purchasers in the Rights Notice.

                                     -18-
<PAGE>

If the closing of the proposed Subsequent Financing does not occur on that date,
any closing of the contemplated Subsequent Financing or any other Subsequent
Financing shall be subject to all of the provisions of this Section 3.12,
including, without limitation, the delivery of a new Rights Notice. The
provisions of this Section 3.12(c) shall not apply to issuances of Financing
Securities in connection with strategic partnerships, acquisition candidates and
public secondary offerings.

          (d)  During the period commencing on the Closing Date and ending on
the second (2/nd/) anniversary of the Closing Date, if the Company enters into
any Subsequent Financing on terms more favorable than the terms governing the
Preferred Shares, then the Purchasers in their sole discretion may exchange the
Preferred Shares together with accrued but unpaid dividends (which dividends
shall be payable, at the sole option of the Purchasers, in cash or in the form
of the new securities to be issued in the Subsequent Financing) for the
securities issued or to be issued in the Subsequent Financing. The Company
covenants and agrees to promptly notify in writing the Purchasers of the terms
and conditions of any such proposed Subsequent Financing.

          Section 3.13  Reservation of Shares. So long as any of the Preferred
                        ---------------------
Shares or Warrants remain outstanding, the Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance, no less than 150% of the aggregate number of shares of Common Stock
needed to provide for the issuance of the Conversion Shares and the Warrant
Shares. The Company shall take all action necessary to increase its authorized
capital stock within forty-five (45) days of the Closing Date to maintain no
less than 150% of the aggregate number of shares of Common Stock needed to
provide for the issuance of the Conversion Shares and the Warrant Shares.

          Section 3.14  Transfer Agent Instructions. The Company shall issue
                        ---------------------------
irrevocable instructions to its transfer agent, and any subsequent transfer
agent, to issue certificates, registered in the name of each Purchaser or its
respective nominee(s), for the Conversion Shares and the Warrant Shares in such
amounts as specified from time to time by each Purchaser to the Company upon
conversion of the Preferred Shares or exercise of the Warrants in the form of
Exhibit E attached hereto (the "Irrevocable Transfer Agent Instructions"). Prior
to registration of the Conversion Shares and the Warrant Shares under the
Securities Act, all such certificates shall bear the restrictive legend
specified in Section 6.1 of this Agreement. The Company warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred to
in this Section 3.14 will be given by the Company to its transfer agent and that
the Shares shall otherwise be freely transferable on the books and records of
the Company as and to the extent provided in this Agreement and the Registration
Rights Agreement. Nothing in this Section 3.14 shall affect in any way each
Purchaser's obligations and agreements set forth in Section 6.1 to comply with
all applicable prospectus delivery requirements, if any, upon resale of the
Shares. If a Purchaser provides the Company with an opinion of counsel, in a
generally acceptable form, to the effect that a public sale, assignment or
transfer of the Shares may be made without registration under the Securities Act
or the Purchaser provides the Company with reasonable assurances that the Shares
can be sold pursuant to Rule 144 without any restriction as to the number of
securities acquired as of a particular date that can then be immediately sold,
the Company shall permit the transfer, and, in the case of the Conversion Shares
and the Warrant

                                     -19-
<PAGE>

Shares, promptly instruct its transfer agent to issue one or more certificates
in such name and in such denominations as specified by such Purchaser and
without any restrictive legend. The Company acknowledges that a breach by it of
its obligations under this Section 3.14 will cause irreparable harm to the
Purchasers by vitiating the intent and purpose of the transaction contemplated
hereby. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 3.14 will be inadequate and agrees,
in the event of a breach or threatened breach by the Company of the provisions
of this Section 3.14, that the Purchasers shall be entitled, in addition to all
other available remedies, to an order and/or injunction restraining any breach
and requiring immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being required.

          Section 3.15 H.C. Wainwright & Co., Inc. The Company covenants and
                       --------------------------
agrees to undertake a formal process under the guidance and advice of H.C.
Wainwright & Co., Inc. to explore strategic transactions for the Company,
including a merger or sale of the Company.

                                  ARTICLE IV

                                  Conditions

          Section 4.1 Conditions Precedent to the Obligation of the Company to
                      --------------------------------------------------------
Sell the Shares.The obligation hereunder of the Company to issue and sell the
---------------
Preferred Shares and the Warrants to the Purchasers is subject to the
satisfaction or waiver, at or before the Closing, each of the conditions set
forth below. These conditions are for the Company's sole benefit and may be
waived by the Company at any time in its sole discretion.

          (a)  Accuracy of Each Purchaser's Representations and Warranties. The
               -----------------------------------------------------------
representations and warranties of each Purchaser shall be true and correct in
all material respects as of the date when made and as of the Closing Date as
though made at that time, except for representations and warranties that are
expressly made as of a particular date, which shall be true and correct in all
material respects as of such date.

          (b)  Performance by the Purchasers. Each Purchaser shall have
               -----------------------------
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Purchaser at or prior to the Closing.

          (c)  No Injunction. No statute, rule, regulation, executive order,
               -------------
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.

          Section 4.2 Conditions Precedent to the Obligation of the Purchasers
                      --------------------------------------------------------
to Purchase the Shares. The obligation hereunder of each Purchaser to acquire
----------------------
and pay for the Preferred Shares and the Warrants is subject to the satisfaction
or waiver, at or before the Closing, of each of the conditions set forth below.
These conditions are for each Purchaser's sole benefit and may be waived by such
Purchaser at any time in its sole discretion.

                                     -20-
<PAGE>

          (a)  Accuracy of the Company's Representations and Warranties. Each of
               --------------------------------------------------------
the representations and warranties of the Company shall be true and correct in
all material respects as of the date when made and as of the Closing Date as
though made at that time (except for representations and warranties that speak
as of a particular date), which shall be true and correct in all material
respects as of such date.

          (b)  Performance by the Company. The Company shall have performed,
               --------------------------
satisfied and complied in all respects with all covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing.

          (c)  No Suspension, Etc. From the date hereof to the Closing Date,
               ------------------
trading in the Company's Common Stock shall not have been suspended by the
Commission (except for any suspension of trading of limited duration agreed to
by the Company, which suspension shall be terminated prior to the Closing), and,
at any time prior to the Closing, trading in securities generally as reported by
Bloomberg Financial Markets ("Bloomberg") shall not have been suspended or
limited, or minimum prices shall not have been established on securities whose
trades are reported by Bloomberg, or on the New York Stock Exchange, nor shall a
banking moratorium have been declared either by the United States or New York
State authorities, nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international calamity or crisis
of such magnitude in its effect on, or any material adverse change in any
financial market which, in each case, in the judgment of such Purchaser, makes
it impracticable or inadvisable to purchase the Preferred Shares.

          (d)  No Injunction. No statute, rule, regulation, executive order,
               -------------
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.

          (e)  No Proceedings or Litigation. No action, suit or proceeding
               ----------------------------
before any arbitrator or any governmental authority shall have been commenced,
and no investigation by any governmental authority shall have been threatened,
against the Company or any subsidiary, or any of the officers, directors or
affiliates of the Company or any subsidiary seeking to restrain, prevent or
change the transactions contemplated by this Agreement, or seeking damages in
connection with such transactions.

          (f)  Certificate of Designation of Rights and Preferences. Prior to
               ----------------------------------------------------
the Closing, the Certificate of Designation in the form of Exhibit C attached
hereto shall have been filed with the Secretary of State of Delaware.

          (g)  Opinion of Counsel, Etc. At the Closing, the Purchasers shall
               -----------------------
have received an opinion of counsel to the Company, dated the date of the
Closing, in the form of Exhibit F hereto, and such other certificates and
documents as the Purchasers or its counsel shall reasonably require incident to
the Closing.

                                     -21-
<PAGE>

          (h)  Registration Rights Agreement. At the Closing, the Company shall
               -----------------------------
have executed and delivered the Registration Rights Agreement to each Purchaser.

          (i)  Certificates. The Company shall have executed and delivered to
               ------------
the Purchasers the certificates (in such denominations as such Purchaser shall
request) for the Preferred Shares and Warrants being acquired by such Purchaser
at the Closing.

          (j)  Resolutions. The Board of Directors of the Company shall have
               -----------
adopted resolutions consistent with Section 2.1(b) above in a form reasonably
acceptable to such Purchaser (the "Resolutions").

          (k)  Reservation of Shares. As of the Closing Date, the Company shall
               ---------------------
have reserved out of its authorized and unissued Common Stock, solely for the
purpose of effecting the conversion of the Preferred Shares and the exercise of
the Warrants, a number of shares of Common Stock equal to at least 150% of the
aggregate number of Conversion Shares issuable upon conversion of the Preferred
Shares outstanding on the Closing Date and the number of Warrant Shares issuable
upon exercise of the number of Warrants assuming such Warrants were granted on
the Closing Date (after giving effect to the Preferred Shares and the Warrants
to be issued on the Closing Date and assuming all such Preferred Shares and
Warrants were fully convertible or exercisable on such date regardless of any
limitation on the timing or amount of such conversions or exercises) .

          (l)  Transfer Agent Instructions. The Irrevocable Transfer Agent
               ---------------------------
Instructions, in the form of Exhibit E attached hereto, shall have been
delivered to and acknowledged in writing by the Company's transfer agent.

          (m)  Secretary's Certificate. The Company shall have delivered to such
               -----------------------
Purchaser a secretary's certificate, dated as of the Closing Date, as to (i) the
Resolutions, (ii) the Certificate, (iii) the Bylaws, (iv) the Certificate of
Designation, each as in effect at the Closing, and (iv) the authority and
incumbency of the officers of the Company executing the Transaction Documents
and any other documents required to be executed or delivered in connection
therewith.

          (n)  Officer's Certificate. The Company shall have delivered to the
               ---------------------
Purchasers a certificate of an executive officer of the Company, dated as of the
Closing Date, confirming the accuracy of the Company's representations,
warranties and covenants as of the Closing Date and confirming the compliance by
the Company with the conditions precedent set forth in this Section 4.2 as of
the Closing Date.

          (o)  Nasdaq Rule. Prior to the Closing, the Company shall have
               -----------
received written consents from its controlling shareholders certifying that such
controlling shareholders will vote in favor of the issuance of shares Common
Stock under this Agreement in excess of 19.99% of its existing Common Stock then
outstanding.

                                     -22-
<PAGE>

                                   ARTICLE V

                             Intentionally Omitted

                                  ARTICLE VI

                           Stock Certificate Legend

         Section 6.1 Legend. Each certificate representing the Preferred Shares
                     ------
and the Warrants, and, if appropriate, securities issued upon conversion
thereof, shall be stamped or otherwise imprinted with a legend substantially in
the following form (in addition to any legend required by applicable state
securities or "blue sky" laws):

         THESE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES")
         HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
         (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE
         SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
         SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR SPEEDCOM
         WIRELESS CORPORATION SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT
         REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES AND UNDER THE
         PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

     The Company agrees to reissue certificates representing the Shares without
the legend set forth above if at such time, prior to making any transfer of any
Shares or Shares, such holder thereof shall give written notice to the Company
describing the manner and terms of such transfer and removal as the Company may
reasonably request. Such proposed transfer will not be effected until: (a) the
Company has notified such holder that either (i) in the opinion of Company
counsel, the registration of such Shares under the Securities Act is not
required in connection with such proposed transfer; or (ii) a registration
statement under the Securities Act covering such proposed disposition has been
filed by the Company with the Commission and has become effective under the
Securities Act; and (b) the Company has notified such holder that either: (i) in
the opinion of Company counsel, the registration or qualification under the
securities or "blue sky" laws of any state is not required in connection with
such proposed disposition, or (ii) compliance with applicable state securities
or "blue sky" laws has been effected. The Company will use its best efforts to
respond to any such notice from a holder within ten (10) days. In the case of
any proposed transfer under this Section 6, the Company will use reasonable
efforts to comply with any such applicable state securities or "blue sky" laws,
but shall in no event be required, in connection therewith, to qualify to do
business in any state where it is not then qualified or to take any action that
would subject it to tax or to the general service of process in any state where
it is not then subject. The restrictions on transfer contained in Section 6.1
shall be in addition to, and not by way of limitation of, any other restrictions
on transfer contained in any other section of this Agreement.

                                     -23-
<PAGE>

                                  ARTICLE VII

                            Intentionally Omitted.

                                 ARTICLE VIII

                                Indemnification

          Section 8.1 General Indemnity. The Company agrees to indemnify and
                      -----------------
hold harmless the Purchasers and any finder (and their respective directors,
officers, affiliates, agents, successors and assigns) from and against any and
all losses, liabilities, deficiencies, costs, damages and expenses (including,
without limitation, reasonable attorneys' fees, charges and disbursements)
incurred by the Purchasers as a result of any inaccuracy in or breach of the
representations, warranties or covenants made by the Company herein. Each
Purchaser severally but not jointly agrees to indemnify and hold harmless the
Company and its directors, officers, affiliates, agents, successors and assigns
from and against any and all losses, liabilities, deficiencies, costs, damages
and expenses (including, without limitation, reasonable attorneys' fees, charges
and disbursements) incurred by the Company as result of any inaccuracy in or
breach of the representations, warranties or covenants made by such Purchaser
herein.

          Section 8.2 Indemnification Procedure. Any party entitled to
                      -------------------------
indemnification under this Article VIII (an "indemnified party") will give
written notice to the indemnifying party of any matters giving rise to a claim
for indemnification; provided, that the failure of any party entitled to
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Article VIII except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
indemnified party in respect of which indemnification is sought hereunder, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the indemnified party a conflict of interest between it
and the indemnifying party may exist with respect of such action, proceeding or
claim, to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. In the event that the indemnifying party advises an
indemnified party that it will contest such a claim for indemnification
hereunder, or fails, within thirty (30) days of receipt of any indemnification
notice to notify, in writing, such person of its election to defend, settle or
compromise, at its sole cost and expense, any action, proceeding or claim (or
discontinues its defense at any time after it commences such defense), then the
indemnified party may, at its option, defend, settle or otherwise compromise or
pay such action or claim. In any event, unless and until the indemnifying party
elects in writing to assume and does so assume the defense of any such claim,
proceeding or action, the indemnified party's costs and expenses arising out of
the defense, settlement or compromise of any such action, claim or proceeding
shall be losses subject to indemnification hereunder. The indemnified party
shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the indemnified party which relates to such action or claim. The indemnifying
party shall keep the indemnified party fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. If
the indemnifying party elects to defend any such

                                     -24-
<PAGE>

action or claim, then the indemnified party shall be entitled to participate in
such defense with counsel of its choice at its sole cost and expense. The
indemnifying party shall not be liable for any settlement of any action, claim
or proceeding effected without its prior written consent. Notwithstanding
anything in this Article VIII to the contrary, the indemnifying party shall not,
without the indemnified party's prior written consent, settle or compromise any
claim or consent to entry of any judgment in respect thereof which imposes any
future obligation on the indemnified party or which does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
indemnified party of a release from all liability in respect of such claim. The
indemnification required by this Article VIII shall be made by periodic payments
of the amount thereof during the course of investigation or defense, as and when
bills are received or expense, loss, damage or liability is incurred, so long as
the indemnified party irrevocably agrees to refund such moneys if it is
ultimately determined by a court of competent jurisdiction that such party was
not entitled to indemnification. The indemnity agreements contained herein shall
be in addition to (a) any cause of action or similar rights of the indemnified
party against the indemnifying party or others, and (b) any liabilities the
indemnifying party may be subject to pursuant to the law.

                                  ARTICLE IX

                                 Miscellaneous

          Section 9.1 Fees and Expenses. Except as otherwise set forth in this
                      -----------------
Agreement, the Registration Rights Agreement or the Certificate of Designation,
each party shall pay the fees and expenses of its advisors, counsel, accountants
and other experts, if any, and all other expenses, incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement, provided that the Company shall pay, at the Closing, (i) all
                --------
actual attorneys' fees and expenses (exclusive of disbursements and out-of-
pocket expenses) incurred by the Purchasers up to $50,000 in connection with the
preparation, negotiation, execution and delivery of this Agreement, the
Registration Rights Agreement and the transactions contemplated thereunder and
(ii) consulting fees and fees in connection with the preparation of documents
incurred by the Purchasers in connection with the preparation, negotiation,
execution and delivery of this Agreement, the Registration Rights Agreement and
the transactions contemplated thereunder. In addition, the Company shall pay all
reasonable fees and expenses incurred by the Purchasers in connection with the
filing and declaration of effectiveness by the Commission of the Registration
Statement (as defined in the Registration Rights Agreement) any amendments,
modifications or waivers of this Agreement or any of the other Transaction
Documents, or incurred in connection with the enforcement of this Agreement or
any of the other Transaction Documents, including, without limitation, all
reasonable attorneys' fees and expenses. The Company shall pay all stamp or
other similar taxes and duties levied in connection with issuance of the
Preferred Shares pursuant hereto.

          Section 9.2 Specific Enforcement, Consent to Jurisdiction.
                      ---------------------------------------------

          (a)  The Company and the Purchasers acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement, the Certificate of Designation or the Registration Rights Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be

                                     -25-
<PAGE>

entitled to an injunction or injunctions to prevent or cure breaches of the
provisions of this Agreement or the Registration Rights Agreement and to enforce
specifically the terms and provisions hereof or thereof, this being in addition
to any other remedy to which any of them may be entitled by law or equity.

          (b)  Each of the Company and the Purchasers (i) hereby irrevocably
submits to the jurisdiction of the United States District Court sitting in the
Southern District of New York and the courts of the State of New York located in
New York county for the purposes of any suit, action or proceeding arising out
of or relating to this Agreement or any of the other Transaction Documents or
the transactions contemplated hereby or thereby and (ii) hereby waives, and
agrees not to assert in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. Each of the Company and the
Purchasers consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing in this
Section 9.2 shall affect or limit any right to serve process in any other manner
permitted by law.

          Section 9.3 Entire Agreement; Amendment. This Agreement contains the
                      ---------------------------
entire understanding of the parties with respect to the matters covered hereby
and, except as specifically set forth herein or in the Transaction Documents or
the Certificate of Designation, neither the Company nor any of the Purchasers
makes any representations, warranty, covenant or undertaking with respect to
such matters and they supersede all prior understandings and agreements with
respect to said subject matter, all of which are merged herein. No provision of
this Agreement may be waived or amended other than by a written instrument
signed by the Company and the holders of at least two-thirds (2/3) of the
Preferred Shares then outstanding, and no provision hereof may be waived other
than by an a written instrument signed by the party against whom enforcement of
any such amendment or waiver is sought. No such amendment shall be effective to
the extent that it applies to less than all of the holders of the Preferred
Shares then outstanding. No consideration shall be offered or paid to any person
to amend or consent to a waiver or modification of any provision of any of the
Transaction Documents or the Certificate of Designation unless the same
consideration is also offered to all of the parties to the Transaction Documents
or holders of Preferred Shares, as the case may be .

          Section 9.4 Notices. Any notice, demand, request, waiver or other
                      -------
communication required or permitted to be given hereunder shall be in writing
and shall be effective (a) upon hand delivery by telex (with correct answer back
received), telecopy or facsimile at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

          If to the Company:    Speedcom Wireless Corporation

                                     -26-
<PAGE>

                                 1748 Independence Boulevard, D-4
                                 Sarasota, Florida  34243
                                 Attention:  Jay Wright, Chief Financial Officer
                                 Telecopier:  (941) 358-6208
                                 Telephone:  (941) 358-9283

with copies to:                  Foley & Lardner
                                 One IBM Plaza
                                 330 N. Wabash Avenue, Suite 3300
                                 Chicago, Illinois 60611-3608
                                 Attention:  Edwin D. Mason, Esq.
                                 Telephone No.:  (312) 755-2532
                                 Facsimile No:   (312) 755-1925

If to any Purchaser:             At the address of such Purchaser set forth on
                                 Exhibit A to this Agreement, with copies to
                                 Purchaser's counsel as set forth on Exhibit A
                                 or as specified in writing by such Purchaser
                                 with copies to:

                                 Christopher S. Auguste, Esq.
                                 Jenkens & Gilchrist Parker Chapin LLP
                                 The Chrysler Building
                                 405 Lexington Avenue
                                 New York, New York 10174
                                 Telephone Number: (212) 704-6000
                                 Fax: (212) 704-6288

     Any party hereto may from time to time change its address for notices by
giving at least ten (10) days written notice of such changed address to the
other party hereto.

          Section 9.5 Waivers. No waiver by either party of any default with
                      -------
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any other
provisions, condition or requirement hereof, nor shall any delay or omission of
any party to exercise any right hereunder in any manner impair the exercise of
any such right accruing to it thereafter.

          Section 9.6 Headings. The article, section and subsection headings in
                      --------
this Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.

          Section 9.7 Successors and Assigns. This Agreement shall be binding
                      ----------------------
upon and inure to the benefit of the parties and their successors and assigns.
After the Closing, the assignment by a party to this Agreement of any rights
hereunder shall not affect the obligations of such party under this Agreement.

Section 9.8  No Third Party Beneficiaries.  This Agreement is intended for the
             ----------------------------

                                     -27-
<PAGE>

benefit of the parties hereto and their respective permitted successors and
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

          Section 9.9 Governing Law. This Agreement shall be governed by and
                      -------------
construed in accordance with the internal laws of the State of New York, without
giving effect to the choice of law provisions. This Agreement shall not
interpreted or construed with any presumption against the party causing this
Agreement to be drafted.

          Section 9.10 Survival. The representations and warranties of the
                       --------
Company and the Purchasers contained in Sections 2.1(o) and (s) should survive
indefinitely and those contained in Article II, with the exception of Sections
2.1(o) and (s), shall survive the execution and delivery hereof and the Closing
until the date three (3) years from the Closing Date, and the agreements and
covenants set forth in Articles I, III, V, VIII and IX of this Agreement shall
survive the execution and delivery hereof and the Closing hereunder until the
Purchasers in the aggregate beneficially own (determined in accordance with Rule
13d-3 under the Exchange Act) less than 2% of the total combined voting power of
all voting securities then outstanding, provided, that Sections 3.1, 3.2, 3.4,
3.5, 3.7, 3.8, 3.9, 3.10, 3.12, 3.13 and 3.14 shall not expire until the
Registration Statement required by Section 2 of the Registration Rights
Agreement is no longer required to be effective under the terms and conditions
of Registration Rights Agreement.

          Section 9.11 Counterparts. This Agreement may be executed in any
                       ------------
number of counterparts, all of which taken together shall constitute one and the
same instrument and shall become effective when counterparts have been signed by
each party and delivered to the other parties hereto, it being understood that
all parties need not sign the same counterpart. In the event any signature is
delivered by facsimile transmission, the party using such means of delivery
shall cause four additional executed signature pages to be physically delivered
to the other parties within five days of the execution and delivery hereof.

          Section 9.12 Publicity. The Company agrees that it will not disclose,
                       ---------
and will not include in any public announcement, the name of the Purchasers
without the consent of the Purchasers unless and until such disclosure is
required by law or applicable regulation, and then only to the extent of such
requirement.

          Section 9.13 Severability. The provisions of this Agreement, the
                       ------------
Certificate of Designation and the Registration Rights Agreement are severable
and, in the event that any court of competent jurisdiction shall determine that
any one or more of the provisions or part of the provisions contained in this
Agreement, the Certificate of Designation or the Registration Rights Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement, the Certificate of
Designation or the Registration Rights Agreement shall be reformed and construed
as if such invalid or illegal or unenforceable provision, or part of such
provision, had never been contained herein, so that such provisions would be
valid, legal and enforceable to the maximum extent possible.

          Section 9.14 Further Assurances. From and after the date of this
                       ------------------
Agreement, upon the request of any Purchaser or the Company, each of the Company
and the Purchasers shall execute and deliver such instrument, documents and
other writings as may be reasonably

                                     -28-
<PAGE>

necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement, the Preferred Shares, the Conversion
Shares, the Warrants, the Warrant Shares, the Certificate of Designation, and
the Registration Rights Agreement.

                                     -29-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officer as of the date first above
written.

                                             SPEEDCOM WIRELESS CORPORATION

                                             By:    /s/ Michael W. McKinney
                                                ------------------------------
                                                    Name: Michael W. McKinney
                                                    Title: CEO

                                             SDS MERCHANT FUND, L.P.

                                             By:    /s/ Steve Derby
                                                 ----------------------------
                                                    Name: Steve Derby
                                                    Title: Managing Member

                                             S.A.C. CAPITAL ASSOCIATES, LLC
                                             By:  S.A.C. Capital Advisors, LLC

                                             By:    /s/ Peter Nussbaum
                                                 ----------------------------
                                                    Name:  Peter Nussbaum
                                                    Title:  General Counsel

                                             OSCAR PRIVATE EQUITY INVESTMENTS,
                                             L.P.
                                             By:  Oscar Private Equity, LLC
                                                  General Partner

                                             By:    /s/ Timothy F. Sylvester
                                                 ----------------------------
                                                    Name:  Timothy F. Sylvester
                                                    Title:  President

                                             By:    /s/ Bruce Sanguinetti
                                                 ----------------------------
                                                    Bruce Sanguinetti

                                     -30-
<PAGE>

                                    By:  /s/ Robert B. Prag
                                       -------------------------------
                                         Robert B. Prag

                                    [NAME OF PURCHASER]

                                    By:  /s/ George Reichl
                                       -------------------------------
                                         Name:  George Reichl
                                         Title

                                    [NAME OF PURCHASER]
                                     DLJSC for the benefit of Richard C. Ross

                                    By:  /s/ Richard C. Ross
                                       -------------------------------
                                         Name:  Richard C. Ross
                                         Title:

                                    [NAME OF PURCHASER]

                                    By:  /s/ Thomas L. Shields, Jr.
                                       -------------------------------
                                         Name:  Thomas L. Shields, Jr.
                                         Title:

                                    [NAME OF PURCHASER]

                                    By:  /s/ William O. Shields
                                       -------------------------------
                                         Name:  William O. Shields
                                         Title:

                                     -31-
<PAGE>

                                         [NAME OF PURCHASER]
                                          Kessler Family Limited Partnership

                                         By:  /s/ Irvin Kessler
                                             --------------------------------
                                              Name:  Irvin Kessler
                                              Title: General Partner

                                         [NAME OF PURCHASER]

                                         By:  /s/ Irvin Kessler
                                            ---------------------------------
                                              Name:  Irvin Kessler
                                              Title:

                                         [NAME OF PURCHASER]

                                         By:  /s/ Frank M. Bishop
                                            ---------------------------------
                                              Name:  Frank M. Bishop
                                              Title:

                                     -32-
<PAGE>

                               EXHIBIT A to the
            SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
                       FOR SPEEDCOM WIRELESS CORPORATION

Names and Addresses                   Number of Preferred Shares   Dollar Amount
   of Purchasers                         & Warrants Purchased      of Investment
-------------------                   --------------------------   -------------

SDS Merchant Fund, L.P.               Preferred Shares: 794,664    $1,787,992
c/o SDS Capital Partners              Series A Warrants: 635,732
One Sound Shore Drive                 Series B Warrants: 944,856
Greenwich, CT 06830
Attention: Steve Derby
Fax no.: (203) 629-0345

S.A.C. Capital Associates, LLC        Preferred Shares: 1,608,854  $3,619,921
c/o S.A.C. Capital Advisors, LLC      Series A Warrants: 1,287,084
777 Long Ridge Road                   Series B Warrants: 1,912,928
Stamford, CT 06902
Attention: General Counsel
Fax no.: (203) 614-2393

Oscar Private Equity
 Investments, L.P.                    Preferred Shares: 560,278    $1,260,625
11611 San Vicente Blvd.               Series A Warrants: 448,223
Suite 810                             Series B Warrants: 666,171
Los Angeles, CA 90049
Attention: Tim Sylvester
Fax no.: (310) 622-0023

Bruce Sanguinetti                     Preferred Shares: 222,778    $  501,250
802 Morning Sun Drive                 Series A Warrants: 178,223
Encinitas, CA 92024                   Series B Warrants: 264,884
Fax No.: (877) 290-5168

Robert B. Prag                        Preferred Shares: 100,000    $  225,000
2455 El Amigo Rd.                     Series A Warrants: 80,000
Del Mar, CA 92014                     Series B Warrants: 118,900
Fax No.: (858) 794-9544

George Reichl                         Preferred Shares: 22,223     $   50,000
353 Park Drive                        Series A Warrants: 17,779
Palatine, IL   60067                  Series B Warrants: 26,424
Fax No.: (847) 734-7055

DLJSC for the benefit of              Preferred Shares: 9,956      $   22,400
Richard C. Ross                       Series A Warrants: 7,965
310 Kietro Drive                      Series B Warrants: 11,838
Linwood, NJ 08221
Attention: Richard C. Ross
Fax No.: (609) 653-4448
<PAGE>

Names and Addresses                   Number of Preferred Shares   Dollar Amount
   of Purchasers                         & Warrants Purchased      of Investment
-------------------                   --------------------------   -------------

Thomas L. Shields, Jr.                Preferred Shares: 112,000    $252,000
1750 W. Sussex                        Series A Warrants: 89,600
Atlanta, GA 30306                     Series B Warrants: 133,168
Fax No.: (404) 439-4925

William Shields                       Preferred Shares: 4,800      $ 10,800
3115 W. Parker #270                   Series A Warrants: 3,840
Plano, TX 75023                       Series B Warrants: 5,708
Fax No.: (972) 867-2111

Kessler Family Limited Partnership    Preferred Shares: 88,889     $200,000
130 Sheshire Lane, Suite 102          Series A Warrants: 71,112
Minnetonka, MN 55305                  Series B Warrants: 105,690
Attention: Larry Shapiro
Fax No.: (952) 249-5320

Irvin Kessler                         Preferred Shares: 266,667    $600,000
130 Sheshire Lane, Suite 102          Series A Warrants: 213,334
Minnetonka, MN 55305                  Series B Warrants: 317,068
Attention: Larry Shapiro
Fax No.: (952) 249-5320

Frank Bishop                          Preferred Shares: 44,445     $100,000
6105 Weatherly Drive                  Series A Warrants: 35,556
Atlanta, GA 30328                     Series B Warrants: 52,846
Fax No.: (404) 439-4906
<PAGE>

                              EXHIBIT B-1 to the
          SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                         SPEEDCOM WIRELESS CORPORATION

                           FORM OF SERIES A WARRANT
<PAGE>

                              EXHIBIT B-2 to the
          SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                         SPEEDCOM WIRELESS CORPORATION

                           FORM OF SERIES B WARRANT
<PAGE>

                               EXHIBIT C to the
          SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                         SPEEDCOM WIRELESS CORPORATION

                      FORM OF CERTIFICATE OF DESIGNATION
<PAGE>

                               EXHIBIT D to the
          SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                         SPEEDCOM WIRELESS CORPORATION

                     FORM OF REGISTRATION RIGHTS AGREEMENT
<PAGE>

                               EXHIBIT E to the
          SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                         SPEEDCOM WIRELESS CORPORATION

                FORM OF IRREVOCABLE TRANSFER AGENT INSTRUCTIONS

                         SPEEDCOM WIRELESS CORPORATION

                                                       as of August 23, 2001

American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Attn: _____________

Ladies and Gentlemen:

     Reference is made to that certain Series B Convertible Preferred Stock
Purchase Agreement, dated as of August 23, 2001, by and among Speedcom Wireless
Corporation, a Delaware corporation (the "Company"), and the purchasers named
therein (collectively, the "Purchasers") pursuant to which the Company is
issuing to the Purchasers shares of its Series B Convertible Preferred Stock,
par value $.001 per share, (the "Preferred Shares") and warrants (the
"Warrants") to purchase shares of the Company's common stock, par value $.001
per share (the "Common Stock") Warrants in connection with the sale and issuance
of Preferred Shares and Warrants to the Purchasers. This letter shall serve as
our irrevocable authorization and direction to you (provided that you are the
transfer agent of the Company at such time) to issue shares of Common Stock upon
conversion of the Preferred Shares (the "Conversion Shares") and exercise of the
Warrants (the "Warrant Shares") to or upon the order of a Purchaser from time to
time upon (i) surrender to you of a properly completed and duly executed
Conversion Notice or Exercise Notice, as the case may be, in the form attached
hereto as Exhibit I and Exhibit II, respectively, (ii) in the case of the
conversion of Preferred Shares, a copy of the certificates (with the original
certificates delivered to the Company) representing Preferred Shares being
converted or, in the case of Warrants being exercised, a copy of the Warrants
(with the original Warrants delivered to the Company) being exercised (or, in
each case, an indemnification undertaking with respect to such share
certificates or the warrants in the case of their loss, theft or destruction),
and (iii) delivery of a treasury order or other appropriate order duly executed
by a duly authorized officer of the Company. So long as you have previously
received (x) written confirmation from counsel to the Company that a
registration statement covering resales of the Conversion Shares or Warrant
Shares, as applicable, has been declared effective by the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "1933 Act"), and no subsequent notice by the Company or its counsel of the
suspension or termination of its effectiveness and (y) a copy of such
registration statement, and if the Purchaser represents in writing that the
Conversion Shares or the Warrant Shares, as the case may be, were sold pursuant
to the Registration Statement, then certificates representing the Conversion
Shares and the Warrant Shares, as the case may be, shall not bear any legend
restricting transfer of the Conversion Shares and the Warrant Shares, as the
case may be, thereby and should not be subject to any stop-transfer restriction.
Provided, however, that if you have not previously received (i) written
confirmation from counsel to the Company that a registration statement covering
resales of the Conversion Shares or Warrant Shares, as applicable, has been
declared effective by the SEC under the 1933 Act, and (ii) a copy
<PAGE>

of such registration statement, then the certificates for the Conversion Shares
and the Warrant Shares shall bear the following legend:

              "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
         BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
         (THE SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY
         NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
         REGISTERED UNDER THE SECURITIES ACT OR APPLICABLE STATE
         SECURITIES LAWS, OR SPEEDCOM WIRELESS CORPORATION SHALL HAVE
         RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH
         SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS
         OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED."

and, provided further, that the Company may from time to time notify you to
place stop-transfer restrictions on the certificates for the Conversion Shares
and the Warrant Shares in the event a registration statement covering the
Conversion Shares and the Warrant Shares is subject to amendment for events then
current.

     A form of written confirmation from counsel to the Company that a
registration statement covering resales of the Conversion Shares and the Warrant
Shares has been declared effective by the SEC under the 1933 Act is attached
hereto as Exhibit III.

     Please be advised that the Purchasers are relying upon this letter as an
inducement to enter into the Securities Purchase Agreement and, accordingly,
each Purchaser is a third party beneficiary to these instructions.

     Please execute this letter in the space indicated to acknowledge your
agreement to act in accordance with these instructions. Should you have any
questions concerning this matter, please contact me at ___________.

                                    Very truly yours,

                                    SPEEDCOM WIRELESS CORPORATION

                                    By: ____________________________
                                         Name: _____________________
                                         Title: ____________________

ACKNOWLEDGED AND AGREED:

AMERICAN STOCK TRANSFER & TRUST COMPANY

By:    ____________________________
Name:  ____________________________
Title: ____________________________
Date:  ___________
<PAGE>

                                   EXHIBIT I
                                   ---------

                         SPEEDCOM WIRELESS CORPORATION
                               CONVERSION NOTICE

Reference is made to the Certificate of Designation of the Relative Rights and
Preferences of the Series B Preferred Stock of Speedcom Wireless Corporation
(the "Certificate of Designation"). In accordance with and pursuant to the
Certificate of Designation, the undersigned hereby elects to convert the number
of shares of Series B Preferred Stock, par value $.001 per share (the "Preferred
Shares"), of Speedcom Wireless Corporation, a Delaware corporation (the
"Company"), indicated below into shares of Common Stock, par value $.001 per
share (the "Common Stock"), of the Company, by tendering the stock
certificate(s) representing the share(s) of Preferred Shares specified below as
of the date specified below.

     Date of Conversion:                         _____________________________

     Number of Preferred Shares to be converted: _______

     Stock certificate no(s). of Preferred Shares to be converted: _______

     The Common Stock have been sold pursuant to the Registration Statement (as
defined in the Registration Rights Agreement): YES ____  NO____

Please confirm the following information:

     Conversion Price:                           _____________________________

     Number of shares of Common Stock
     to be issued:                               _____________________________

Please issue the Common Stock into which the Preferred Shares are being
converted and, if applicable, any check drawn on an account of the Company in
the following name and to the following address:

     Issue to:                                   _____________________________
                                                 _____________________________

     Facsimile Number:                           _____________________________

     Authorization:                              _____________________________
                                                 By:    ______________________
                                                 Title: ______________________

     Dated:

                                PRICES ATTACHED
<PAGE>

                                   EXHIBIT II
                                   ----------

                            FORM OF EXERCISE NOTICE

                                 EXERCISE FORM

                         SPEEDCOM WIRELESS CORPORATION

The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Common Stock of Speedcom
Wireless Corporation covered by the within Warrant.

Dated: _________________      Signature ___________________________

                              Address   _____________________
                                        _____________________

                                  ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

Dated: _________________      Signature ___________________________

                              Address   _____________________
                                        _____________________

                              PARTIAL ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

Dated: _________________      Signature ___________________________

                              Address   _____________________
                                        _____________________

                          FOR USE BY THE ISSUER ONLY:

This Warrant No. W-_____ canceled (or transferred or exchanged) this _____ day
of ___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. W-_____ issued for ____ shares of Common Stock in
the name of _______________.
<PAGE>

                                  EXHIBIT III
                                  -----------

                        FORM OF NOTICE OF EFFECTIVENESS
                           OF REGISTRATION STATEMENT

American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Attn:  _____________

          Re:  Speedcom Wireless Corporation
               -----------------------------

Ladies and Gentlemen:

     We are counsel to Speedcom Wireless Corporation, a Delaware corporation
(the "Company"), and have represented the Company in connection with that
certain Series B Convertible Preferred Stock Purchase Agreement (the "Purchase
Agreement"), dated as of August 23, 2001, by and among the Company and the
purchasers named therein (collectively, the "Purchasers") pursuant to which the
Company issued to the Purchasers shares of its Series B Convertible Preferred
Stock, par value $.001 per share, (the "Preferred Shares") and warrants (the
"Warrants") to purchase shares of the Company's common stock, par value $.001
per share (the "Common Stock"). Pursuant to the Purchase Agreement, the Company
has also entered into a Registration Rights Agreement with the Purchasers (the
"Registration Rights Agreement"), dated as of August 23, 2001, pursuant to which
the Company agreed, among other things, to register the Registrable Securities
(as defined in the Registration Rights Agreement), including the shares of
Common Stock issuable upon conversion of the Preferred Shares and exercise of
the Warrants, under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with the Company's obligations under the Registration Rights
Agreement, on ________________, 2001, the Company filed a Registration Statement
on Form S-3 (File No. 333-________) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") relating to the resale of the
Registrable Securities which names each of the present Purchasers as a selling
stockholder thereunder.

     In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and accordingly, the
Registrable Securities are available for resale under the 1933 Act pursuant to
the Registration Statement.

                                    Very truly yours,

                                    [COMPANY COUNSEL]

                                    By: __________________________________

cc:  [LIST NAMES OF PURCHASERS]
<PAGE>

                               EXHIBIT F to the
          SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT FOR
                         SPEEDCOM WIRELESS CORPORATION

                           FORM OF OPINION OF COUNSEL

     1.   The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the state of Delaware and has the requisite
corporate power to own, lease and operate its properties and assets, and to
carry on its business as presently conducted. The company is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary.

     2.   The Company has the requisite corporate power and authority to enter
into and perform its obligations under the Transaction Documents and to issue
the Preferred Stock, the Warrants and the Common Stock issuable upon conversion
of the Preferred Stock and exercise of the Warrants. The execution, delivery and
performance of each of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated thereby have been duly and
validly authorized by all necessary corporate action and no further consent or
authorization of the Company or its Board of Directors or stockholders is
required. Each of the Transaction Documents have been duly executed and
delivered, and the Preferred Stock and the Warrants have been duly executed,
issued and delivered by the Company and each of the Transaction Documents
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its respective terms. The Common Stock
issuable upon conversion of the Preferred Stock and exercise of the Warrants are
not subject to any preemptive rights under the Certificate of Incorporation or
the Bylaws.

     3.   The Preferred Stock and the Warrants have been duly authorized and,
when delivered against payment in full as provided in the Purchase Agreement,
will be validly issued, fully paid and nonassessable. The shares of Common Stock
issuable upon conversion of the Preferred Stock and exercise of the Warrants,
have been duly authorized and reserved for issuance, and, when delivered upon
conversion or against payment in full as provided in the Certificate of
Designation and the Warrants, as applicable, will be validly issued, fully paid
and nonassessable.

     4.   The execution, delivery and performance of and compliance with the
terms of the Transaction Documents and the issuance of the Preferred Stock, the
Warrants and the Common Stock issuable upon conversion of the Preferred Stock
and exercise of the Warrants do not (i) violate any provision of the Certificate
of Incorporation or Bylaws, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any material agreement, mortgage, deed of trust, indenture,
note, bond, license, lease agreement, instrument or obligation to which the
Company is a party, (iii) create or impose a lien, charge or encumbrance on any
property of the Company under any agreement or any commitment to which the
Company is a party or by which the Company is bound or by which any of its
respective properties or assets are bound, or (iv) (a) result in a violation of
any federal, state, local or foreign statute, rule, regulation, order, judgment,
injunction or decree (including Federal and state securities laws and
regulations) applicable to the Company or by which any property or asset of the
Company is bound or affected, except, in all cases other than violations
pursuant to clause (i) above, for such conflicts, default, terminations,
amendments, acceleration, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect.
<PAGE>

     5.   No consent, approval or authorization of or designation, declaration
or filing with any governmental authority on the part of the Company is required
under Federal, state or local law, rule or regulation in connection with the
valid execution and delivery of the Transaction Documents, or the offer, sale or
issuance of the Preferred Stock, the Warrants or the Common Stock issuable upon
conversion of the Preferred Stock and exercise of the Warrants other than the
Certificate of Designation and the Registration Statement.

     6.   There is no action, suit, claim, investigation or proceeding pending
or threatened against the Company which questions the validity of this Agreement
or the transactions contemplated hereby or any action taken or to be taken
pursuant hereto or thereto. There is no action, suit, claim, investigation or
proceeding pending, or to our knowledge, threatened, against or involving the
Company or any of its properties or assets and which, if adversely determined,
is reasonably likely to result in a Material Adverse Effect. There are no
outstanding orders, judgments, injunctions, awards or decrees of any court,
arbitrator or governmental or regulatory body against the Company or any
officers or directors of the Company in their capacities as such.

     7.   The offer, issuance and sale of the Preferred Stock and the Warrants
and the offer, issuance and sale of the shares of Common Stock issuable upon
conversion of the Preferred Stock and exercise of the Warrants pursuant to the
Purchase Agreement, the Certificate of Designation and the Warrants, as
applicable, are exempt from the registration requirements of the Securities Act.

     8.   The Company is not, and as a result of and immediately upon Closing
will not be, an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.

                                   Very truly yours,

                                   FOLEY & LARDNER<PAGE>

                                                                     Exhibit 4.2

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

          This Registration Rights Agreement (this "Agreement") is made and
                                                    ---------
entered into as of August 23, 2001, among Speedcom Wireless Corporation, a
Delaware corporation (the "Company"), and each of the Purchasers listed on
                           -------
Schedule 1 attached hereto.  Each of the Purchasers listed on Schedule 1
attached hereto is referred to herein as a "Purchaser" and are collectively
                                            ---------
referred to herein as the "Purchasers."
                           ----------

          This Agreement is being entered into pursuant to the Series B
Convertible Preferred Stock Purchase Agreement, dated as of the date hereof, by
and among the Company and the Purchasers (the "Purchase Agreement").
                                               ------------------

          The Company and the Purchasers hereby agree as follows:

     1.   Definitions.
          -----------

          Capitalized terms used and not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement.  As used in this Agreement,
the following terms shall have the following meanings:

          "Advice" shall have the meaning set forth in Section 3(m).
           ------

          "Affiliate" means, with respect to any Person, any other Person that
           ---------
directly or indirectly controls or is controlled by or under common control with
such Person.  For the purposes of this definition, "control," when used with
                                                    -------
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms of "affiliated," "controlling" and "controlled" have meanings
                  ----------    -----------       ----------
correlative to the foregoing.

          "Blackout Period" shall have the meaning set forth in Section 3(n).
           ---------------

          "Board" shall have the meaning set forth in Section 3(n).
           -----

          "Business Day" means any day except Saturday, Sunday and any day which
           ------------
shall be a legal holiday or a day on which banking institutions in the state of
New York generally are authorized or required by law or other government actions
to close.

          "Commission" means the Securities and Exchange Commission.
           ----------

          "Common Stock" means the Company's Common Stock, par value $.001 per
           ------------
share.

          "Effectiveness Date" means with respect to the Registration Statement
           ------------------
the earlier of the 120/th/ day following the Closing Date and the date which is
within five (5) days of the date
<PAGE>

on which the Commission informs the Company that the Commission (i) will not
review the Registration Statement or (ii) that the Company may request the
acceleration of the effectiveness of the Registration Statement.

          "Effectiveness Period" shall have the meaning set forth in Section
           --------------------
2(a).

          "Event" shall have the meaning set forth in Section 7(e).
           -----

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.
           ------------

          "Filing Date" means the 30/th/ day following the Closing Date.
           -----------

          "Holder" or "Holders" means the holder or holders, as the case may be,
           ------      -------
from time to time of Registrable Securities, including without limitation, the
Purchasers and their assignees.

          "Indemnified Party" shall have the meaning set forth in Section 5(c).
           -----------------

          "Liquidated Damages" shall have the meaning set forth in Section 7(e).
           ------------------

          "Indemnifying Party" shall have the meaning set forth in Section 5(c).
           ------------------

          "Losses" shall have the meaning set forth in Section 5(a).
           ------

          "OTC Bulletin Board" shall mean the over-the-counter electronic
           ------------------
bulletin board.

          "Person" means an individual or a corporation, partnership, trust,
           ------
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.

          "Preferred Stock" means the Series B Convertible Preferred Stock, par
           ---------------
value $.001 per share and stated value $1.125 per share, of the Company issued
to the Purchasers pursuant to the Purchase Agreement.

          "Proceeding" means an action, claim, suit, investigation or proceeding
           ----------
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

          "Prospectus" means the prospectus included in the Registration
           ----------
Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.

                                       2
<PAGE>

          "Registrable Securities" means (i) the shares of Common Stock issuable
           ----------------------
upon conversion of the Preferred Stock (the "Conversion Shares") and exercise of
the Series A Warrants, Series B Warrants and the warrants issued by the Company
in connection with the Note and Warrant Purchase Agreement dated June 11, 2001
(collectively, the "Warrant Shares"), and upon any stock split, stock dividend,
recapitalization or similar event with respect to such Conversion Shares,
Warrant Shares or any Preferred Stock, (ii) the shares of Common Stock issued
upon any redemption of Preferred Stock pursuant to Section 8 of the Certificate
of Designation, (iii) certain shares of Common Stock and/or warrants to purchase
shares of Common Stock issuable to H.C. Wainwright  & Co., Inc., (iv) certain
shares of Common Stock or warrants to purchase shares of Common Stock issuable
to the Company's employees and affiliates not to exceed an aggregate of 150,000
shares and (v) any other dividend or other distribution with respect to,
conversion or exchange of, or in replacement of, Registrable Securities;
provided, however, that Registrable Securities shall include (but not be limited
--------  -------
to) a number of shares of Common Stock equal to no less than 150% of the maximum
number of shares of Common Stock which would be issuable upon conversion of the
Preferred Stock and upon exercise of the Warrants, assuming such conversion and
exercise occurred on the Closing Date or the Filing Date, whichever date would
result in the greater number of Registrable Securities.  Notwithstanding
anything herein contained to the contrary, such registered shares of Common
Stock shall be allocated among the Holders pro rata based on the total number of
Registrable Securities issued or issuable as of each date that a Registration
Statement, as amended, relating to the resale of the Registrable Securities is
declared effective by the Commission.  Notwithstanding anything contained herein
to the contrary, if the actual number of shares of Common Stock issuable upon
conversion of the Preferred Stock and upon exercise of the Warrants exceeds 150%
of the number of shares of Common Stock issuable upon conversion of the
Preferred Stock and upon exercise of the Warrants based upon a computation as at
the Closing Date or the Filing Date, the term "Registrable Securities" shall be
deemed to include such additional shares of Common Stock.

          "Registration Statement" means the registration statements and any
           ----------------------
additional registration statements contemplated by Section 2(a), including (in
each case) the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto, and all material incorporated by reference in such
registration statement.

          "Rule 144" means Rule 144 promulgated by the Commission pursuant to
           --------
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

          "Rule 158" means Rule 158 promulgated by the Commission pursuant to
           --------
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

          "Rule 415" means Rule 415 promulgated by the Commission pursuant to
           --------
the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

                                       3
<PAGE>

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

          "Special Counsel" means any special counsel to the Holders, for which
           ---------------
the Holders will be reimbursed by the Company pursuant to Section 4.

     2.   Registration.  On or prior to the Filing Date the Company shall
          ------------
prepare and file with the Commission a Registration Statement covering all
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement shall be on Form S-3 (except if the
Company is not then eligible to register for resale the Registrable Securities
on Form S-3, in which case such registration shall be on another appropriate
form in accordance herewith). The Company shall (i) not permit any securities
other than the Registrable Securities to be included in the Registration
Statement and (ii) use its best efforts to cause the Registration Statement to
be declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event prior to the Effectiveness Date, and to keep
such Registration Statement continuously effective under the Securities Act
until such date as is the earlier of (x) the date when all Registrable
Securities covered by such Registration Statement have been sold or (y) the date
on which the Registrable Securities may be sold without any restriction pursuant
to Rule 144(k) as determined by the counsel to the Company pursuant to a written
opinion letter, addressed to the Company's transfer agent to such effect (the
"Effectiveness Period").  If an additional Registration Statement is required to
 --------------------
be filed because the actual number of shares of Common Stock into which the
Preferred Stock is convertible and the Warrants are exercisable exceeds the
number of shares of Common Stock initially registered in respect of the
Conversion Shares and the Warrant Shares based upon the computation on the
Closing Date, the Company shall have twenty (20) Business Days to file such
additional Registration Statement, and the Company shall use its best efforts to
cause such additional Registration Statement to be declared effective by the
Commission as soon as possible, but in no event later than thirty (30) days
after filing.

     3.   Registration Procedures.
          -----------------------

          In connection with the Company's registration obligations hereunder,
the Company shall:

                                       4
<PAGE>

          (a)  Prepare and file with the Commission on or prior to the Filing
Date, a Registration Statement on Form S-3 (or if the Company is not then
eligible to register for resale the Registrable Securities on Form S-3 such
registration shall be on another appropriate form in accordance herewith) in
accordance with the method or methods of distribution thereof as specified by
the Holders (except if otherwise directed by the Holders), and cause the
Registration Statement to become effective and remain effective as provided
herein; provided, however, that not less than five (5) Business Days prior to
        --------  -------
the filing of the Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would be
incorporated therein by reference), the Company shall (i) furnish to the Holders
and any Special Counsel, copies of all such documents proposed to be filed,
which documents (other than those incorporated by reference) will be subject to
the review of such Holders and such Special Counsel, and (ii) at the request of
any Holder cause its officers and directors, counsel and independent certified
public accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of counsel to such Holders, to conduct a reasonable
investigation within the meaning of the Securities Act.  The Company shall not
file the Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities or any Special Counsel shall reasonably object in writing within
three (3) Business Days of their receipt thereof.

          (b)  (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration Statement as may be
necessary to keep the Registration Statement continuously effective as to the
applicable Registrable Securities for the Effectiveness Period and prepare and
file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities;
(ii) cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; (iii) respond as promptly as possible to any comments received
from the Commission with respect to the Registration Statement or any amendment
thereto and as promptly as possible provide the Holders true and complete copies
of all correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented.

          (c)  Notify the Holders of Registrable Securities to be sold and any
Special Counsel as promptly as possible (and, in the case of (i)(A) below, not
less than five (5) Business Days prior to such filing) and (if requested by any
such Person) confirm such notice in writing no later than one (1) Business Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or post-
effective amendment to the Registration Statement is proposed to be filed; (B)
when the Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement and (C) with respect to the Registration Statement
or any post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal

                                       5
<PAGE>

or state governmental authority for amendments or supplements to the
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose; (iv) if at any time any of the
representations and warranties of the Company contained in any agreement
contemplated hereby ceases to be true and correct in all material respects; (v)
of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; and (vi) of the occurrence of any event that makes
any statement made in the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to the Registration Statement,
Prospectus or other documents so that, in the case of the Registration Statement
or the Prospectus, as the case may be, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

          The Company shall promptly furnish to Special Counsel, without charge,
(i) any correspondence from the Commission or the Commission's staff to the
Company or its representatives relating to any Registration Statement and (ii)
promptly after the same is prepared and filed with the Commission, a copy of any
written response to the correspondence received from the Commission.

          (d)  Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of, (i) any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.

          (e)  If requested by the Holders of a majority in interest of the
Registrable Securities, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to the Registration Statement such information as the
Company reasonably agrees should be included therein and (ii) make all required
filings of such Prospectus supplement or such post-effective amendment as soon
as practicable after the Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective amendment.

          (f)  Furnish to each Holder and any Special Counsel, without charge,
at least one conformed copy of each Registration Statement and each amendment
thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all exhibits
to the extent requested by such Person (including those previously furnished or
incorporated by reference) promptly after the filing of such documents with the
Commission.

          (g)  Promptly deliver to each Holder and any Special Counsel, without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus) and each amendment or supplement thereto as such Persons may
reasonably request; and the Company

                                       6
<PAGE>

hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders in connection with the offering and sale
of the Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.

          (h)  Prior to any public offering of Registrable Securities, use its
best efforts to register or qualify or cooperate with the selling Holders and
any Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder requests in writing, to
keep each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the
Registrable Securities covered by a Registration Statement; provided, however,
                                                            --------  -------
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified or to take any action that
would subject it to general service of process in any such jurisdiction where it
is not then so subject or subject the Company to any material tax in any such
jurisdiction where it is not then so subject.

          (i)  Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold
pursuant to a Registration Statement, which certificates shall be free of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any Holder may request at least
two (2) Business Days prior to any sale of Registrable Securities.

          (j)  Upon the occurrence of any event contemplated by Section
3(c)(vi), as promptly as possible, prepare a supplement or amendment, including
a post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.

          (k)  Use its best efforts to cause all Registrable Securities relating
to such Registration Statement to be listed on the Nasdaq SmallCap Market, the
OTC Bulletin Board and any other securities exchange, quotation system, market
or over-the-counter bulletin board, if any, on which similar securities issued
by the Company are then listed as and when required pursuant to the Purchase
Agreement.

          (l)  Comply in all material respects with all applicable rules and
regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than forty-five (45) days after the end of
any 12-month period (or ninety (90) days after the end of any 12-month period if
such period is a fiscal year) commencing on the first day of the first fiscal
quarter of the Company after the effective date of the Registration Statement,
which statement shall conform to the requirements of Rule 158.

                                       7
<PAGE>

          (m)  Require each selling Holder to furnish to the Company information
regarding such Holder and the distribution of such Registrable Securities as is
required by law to be disclosed in the Registration Statement, and the Company
may exclude from such registration the Registrable Securities of any such Holder
who fails to furnish such information within a reasonable time prior to the
filing of each Registration Statement, supplemented Prospectus and/or amended
Registration Statement.

          If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (if such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar federal statute then in
force) the deletion of the reference to such Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.

          Each Holder covenants and agrees that (i) it will not sell any
Registrable Securities under the Registration Statement until it has received
copies of the Prospectus as then amended or supplemented as contemplated in
Section 3(g) and notice from the Company that such Registration Statement and
any post-effective amendments thereto have become effective as contemplated by
Section 3(c) and (ii) it and its officers, directors or Affiliates, if any, will
comply with the prospectus delivery requirements of the Securities Act as
applicable to them in connection with sales of Registrable Securities pursuant
to the Registration Statement.

          Each Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or
3(c)(vi), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing (the "Advice")
                                                                      ------
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 incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.

          (n)  If (i) there is material non-public information regarding the
Company which the Company's Board of Directors (the "Board") reasonably
                                                     -----
determines not to be in the Company's best interest to disclose and which the
Company is not otherwise required to disclose, or (ii) there is a significant
business opportunity (including, but not limited to, the acquisition or
disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction) available to
the Company which the Board reasonably determines not to be in the Company's
best interest to disclose and which the Company would be required to disclose
under the Registration Statement, then the Company may postpone or suspend
effectiveness of a registration statement and suspend the sale of Registrable
Securities under a Registration Statement for a period not to exceed twenty (20)
consecutive days, provided that the Company may not postpone or suspend its
obligation under this Section 3(n) for more than forty-five (45) days in the
aggregate during any twelve (12) month period (each, a "Blackout
                                                        --------

                                       8
<PAGE>

Period"); provided, however, that no such postponement or suspension shall be
------    --------  -------
permitted for consecutive twenty (20) day periods, arising out of the same set
of facts, circumstances or transactions.

     4.   Registration Expenses
          ---------------------

          All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company whether or not
the Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement.  The
fees and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
Nasdaq SmallCap Market and each other securities exchange or market on which
Registrable Securities are required hereunder to be listed, (B) with respect to
filings required to be made with the Commission, (C) with respect to filings
required to be made under the Nasdaq SmallCap Market and (D) in compliance with
state securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel for the Holders in connection with Blue Sky
qualifications of the Registrable Securities and determination of the
eligibility of the Registrable Securities for investment under the laws of such
jurisdictions as the Holders of a majority of Registrable Securities may
designate)), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company and Special Counsel for the Holders, in the case of the Special Counsel,
to a maximum amount of $5,000, (v) Securities Act liability insurance, if the
Company so desires such insurance, and (vi) fees and expenses of all other
Persons retained by the Company in connection with the consummation of the
transactions contemplated by this Agreement, including, without limitation, the
Company's independent public accountants (including the expenses of any comfort
letters or costs associated with the delivery by independent public accountants
of a comfort letter or comfort letters).  In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit, the
fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange as required hereunder.

     5.   Indemnification
          ---------------

          (a)  Indemnification by the Company.  The Company shall,
               ------------------------------
notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, agents, brokers (including brokers who
offer and sell Registrable Securities as principal as a result of a pledge or
any failure to perform under a margin call of Common Stock), investment advisors
and employees of each of them, each Person who controls any such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents and employees of each such controlling
Person, to the fullest extent

                                       9
<PAGE>

permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, costs of preparation
and attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising
                                                  ------
out of or relating to any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, except to the extent, but only to the extent, that such
untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, which information was reasonably relied on by the Company for use
therein or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto. The Company shall notify the Holders promptly
of the institution, threat or assertion of any Proceeding of which the Company
is aware in connection with the transactions contemplated by this Agreement.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of an Indemnified Party and shall survive the
transfer of the Registrable Securities by the Holders.

          (b)  Indemnification by Holders.  Each Holder shall, severally and not
               --------------------------
jointly, indemnify and hold harmless the Company, the directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon any untrue statement of a
material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or arising solely out of or based solely upon any omission
of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in or omitted from any information so
furnished in writing by such Holder to the Company specifically for inclusion in
the Registration Statement or such Prospectus and that such information was
reasonably relied upon by the Company for use in the Registration Statement,
such Prospectus or such form of prospectus or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus Supplement.  Notwithstanding anything to
the contrary contained herein, the Holder shall be liable under this Section
5(b) for only that amount as does not exceed the net proceeds to such Holder as
a result of the sale of Registrable Securities pursuant to such Registration
Statement.

          (c)  Conduct of Indemnification Proceedings.  If any Proceeding shall
               --------------------------------------
be brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"),
 -----------------

                                       10
<PAGE>

such Indemnified Party promptly shall notify the Person from whom indemnity is
sought (the "Indemnifying Party) in writing, and the Indemnifying Party shall
             ------------------
assume the defense thereof, including the employment of counsel reasonably
satisfactory to the Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying Party
of its obligations or liabilities pursuant to this Agreement, except (and only)
to the extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.

          An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party).  The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld.  No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.

          All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten (10)
Business Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).

          (d)  Contribution.  If a claim for indemnification under Section 5(a)
               ------------
or 5(b) is unavailable to an Indemnified Party because of a failure or refusal
of a governmental authority to enforce such indemnification in accordance with
its terms (by reason of public policy or otherwise), then each 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, in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and

                                       11
<PAGE>

Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying, Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms. Notwithstanding anything to the
contrary contained herein, the Holder shall be liable or required to contribute
under this Section 5(c) for only that amount as does not exceed the net proceeds
to such Holder as a result of the sale of Registrable Securities pursuant to
such Registration Statement.

          The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

          The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties

     6.   Rule 144.
          --------

          As long as any Holder owns Preferred Shares, Conversion Shares,
Warrants or Warrant Shares, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof pursuant to
Section 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders
with true and complete copies of all such filings.  As long as any Holder owns
Preferred Shares, Conversion Shares, Warrants or Warrant Shares, if the Company
is not required to file reports pursuant to Section 13(a) or 15(d) of the
Exchange Act, it will prepare and furnish to the Holders and make publicly
available in accordance with Rule 144(c) promulgated under the Securities Act
annual and quarterly financial statements, together with a discussion and
analysis of such financial statements in form and substance substantially
similar to those that would otherwise be required to be included in reports
required by Section 13(a) or 15(d) of the Exchange Act, as well as any other
information required thereby, in the time period that such filings would have
been required to have been made under the Exchange Act.  The Company further
covenants that it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Person to
sell Conversion Shares and Warrant Shares without registration under the
Securities Act within the limitation of the

                                       12
<PAGE>

exemptions provided by Rule 144 promulgated under the Securities Act, including
providing any legal opinions of counsel to the Company referred to in the
Purchase Agreement. Upon the request of any Holder, the Company shall deliver to
such Holder a written certification of a duly authorized officer as to whether
it has complied with such requirements.

     7.   Miscellaneous.
          -------------

          (a)  Remedies. In the event of a breach by the Company or by a Holder,
               --------
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.  The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

          (b)  No Inconsistent Agreements. Neither the Company nor any of its
               --------------------------
subsidiaries has, as of the date hereof entered into and currently in effect,
nor shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof except for registration rights
provisions disclosed in the Company's Disclosure Schedule to the Purchase
Agreement.  Except for registration rights provisions disclosed in the Company's
Disclosure Schedule to the Purchase Agreement, neither the Company nor any of
its subsidiaries has previously entered into any agreement currently in effect
granting any registration rights with respect to any of its securities to any
Person.  Without limiting the generality of the foregoing, without the written
consent of the Holders of a majority of the then outstanding Registrable
Securities, the Company shall not grant to any Person the right to request the
Company to register any securities of the Company under the Securities Act
unless the rights so granted are subject in all respects to the prior rights in
full of the Holders set forth herein, and are not otherwise in conflict with the
provisions of this Agreement.  This Section 7(b) shall not prohibit the Company
from entering into any agreements concerning the registration of securities on
Form S-8 or Form S-4.

          (c)  No Piggyback on Registrations. Neither the Company nor any of its
               -----------------------------
security holders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in the Registration Statement, and the Company
shall not after the date hereof enter into any agreement providing such right to
any of its security holders, unless the right so granted is subject in all
respects to the prior rights in full of the Holders set forth herein, and is not
otherwise in conflict with the provisions of this Agreement.

          (d)  Piggy-Back Registrations. If at any time when there is not an
               ------------------------
effective Registration Statement covering any Registrable Securities, the
Company shall determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than

                                       13
<PAGE>

on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or its
then equivalents relating to equity securities to be issued solely in connection
with any acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, the Company shall
send to each holder of Registrable Securities written notice of such
determination and, if within thirty (30) days after receipt of such notice, any
such holder shall so request in writing (which request shall specify the
Registrable Securities intended to be disposed of by the Holders), the Company
will cause the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by the holder, to
the extent requisite to permit the disposition of the Registrable Securities so
to be registered, provided that if at any time after giving written notice of
its intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to such holder and, thereupon, (i) in the case of a determination
not to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay expenses in accordance with Section 4 hereof), and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Registrable Securities being registered pursuant to this Section 7(d) for the
same period as the delay in registering such other securities. The Company shall
include in such registration statement all or any part of such Registrable
Securities such holder requests to be registered; provided, however, that the
                                                  --------  -------
Company shall not be required to register any Registrable Securities pursuant to
this Section 7(d) that are eligible for sale pursuant to Rule 144(k) of the
Securities Act.  In the case of an underwritten public offering, if the managing
underwriter(s) or underwriter(s) should reasonably object to the inclusion of
the Registrable Securities in such registration statement, then if the Company
after consultation with the managing underwriter should reasonably determine
that the inclusion of such Registrable Securities would materially adversely
affect the offering contemplated in such registration statement, and, based on
such determination, recommends inclusion in such registration statement of fewer
or none of the Registrable Securities of the Holders, then, as applicable, (x)
the number of Registrable Securities of the Holders included in such
registration statement shall be reduced pro-rata among such Holders (based upon
the number of Registrable Securities requested to be included in the
registration), if the Company after consultation with the underwriter(s)
recommends the inclusion of fewer Registrable Securities, or (y) none of the
Registrable Securities of the Holders shall be included in such registration
statement, if the Company after consultation with the underwriter(s) recommends
the inclusion of none of such Registrable Securities; provided, however, that if
                                                      --------  -------
securities are being offered for the account of other persons or entities as
well as the Company, such reduction of the number of Registrable Securities
intended to be offered by the Holders shall not represent a greater fraction
than the fraction of similar reductions imposed on such other persons or
entities (other than the Company).

          (e)  Failure to File Registration Statement and Other Events. The
               -------------------------------------------------------
Company and the Purchasers agree that the Holders will suffer damages if the
Registration Statement is not filed on or prior to the Filing Date and not
declared effective by the Commission on or prior to the Effectiveness Date and
maintained in the manner contemplated herein during the Effectiveness Period or
if certain other events occur.  The Company and the Holders further

                                       14
<PAGE>

agree that it would not be feasible to ascertain the extent of such damages with
precision. Accordingly, if (i) the Registration Statement is not filed on or
before the Filing Date, or is not declared effective by the Commission on or
prior to the Effectiveness Date (or in the event an additional Registration
Statement is filed because the actual number of shares of Common Stock into
which the Preferred Stock is convertible and the Warrants are exercisable
exceeds the number of shares of Common Stock initially registered is not filed
and declared effective within the time periods set forth in Section 2(a)), or
(ii) the Company fails to file with the Commission a request for acceleration in
accordance with Rule 461 promulgated under the Exchange Act within five (5)
Business Days of the date that the Company is notified (orally or in writing,
whichever is earlier) by the Commission that a Registration Statement will not
be "reviewed," or not subject to further review, or (iii) the Registration
Statement is filed with and declared effective by the Commission but thereafter
ceases to be effective as to all Registrable Securities at any time prior to the
expiration of the Effectiveness Period, without being succeeded immediately by a
subsequent Registration Statement filed with and declared effective by the
Commission, or (iv) trading in the Common Stock shall be suspended or if the
Common Stock is delisted from the Nasdaq SmallCap Market for any reason for more
than three Business Days in the aggregate, or (v) the conversion rights of the
Holders are suspended for any reason, including by the Company, or (vi) the
Company breaches in a material respect any covenant or other material term or
condition to this Agreement, the Certificate of Designation, the Purchase
Agreement (other than a representation or warranty contained therein) or any
other agreement, document, certificate or other instrument delivered in
connection with the transactions contemplated hereby and thereby, and such
breach continues for a period of thirty days after written notice thereof to the
Company, or (vii) the Company has breached Section 3(n) of this Agreement (any
such failure or breach being referred to as an "Event"), the Company shall pay
                                                -----
as liquidated damages for such failure and not as a penalty to each Holder an
amount equal to 3% for the first thirty (30) day period and 1.5% for each thirty
(30) day period thereafter of such Holder's pro rata share of the purchase price
paid by all Holders for all shares of Series B Preferred Stock purchased and
then outstanding pursuant to the Purchase Agreement for each thirty (30) day
period until the applicable Event has been cured, which shall be pro rated for
such periods less than thirty (30) days (the "Periodic Amount").  Payments to be
                                              ---------------
made pursuant to this Section 7(e) shall be due and payable immediately upon
demand at the option of the Holders in cash or as an accrual to the Liquidation
Preference Amount (as defined in the Certificate of Designation of the Series B
Convertible Preferred Stock).  The parties agree that the Periodic Amount
represents a reasonable estimate on the part of the parties, as of the date of
this Agreement, of the amount of damages that may be incurred by the Holders if
the Registration Statement is not filed on or prior to the Filing Date or has
not been declared effective by the Commission on or prior to the Effectiveness
Date and maintained in the manner contemplated herein during the Effectiveness
Period or if any other Event as described herein has occurred.

          (f)  Specific Enforcement, Consent to Jurisdiction.
               ---------------------------------------------

               (i)  The Company and the Purchasers acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Registration Rights Agreement or the Purchase Agreement were not performed in
accordance with their specific terms or were otherwise breached.  It is
accordingly agreed that the parties shall be entitled to an

                                       15
<PAGE>

injunction or injunctions to prevent or cure breaches of the provisions of this
Registration Rights Agreement or the Purchase Agreement and to enforce
specifically the terms and provisions hereof or thereof, this being in addition
to any other remedy to which any of them may be entitled by law or equity.

               (ii)  Each of the Company and the Purchasers (i) hereby
irrevocably submits to the jurisdiction of the United States District Court for
the Southern District of New York and the courts of the State of New York
located in New York county for the purposes of any suit, action or proceeding
arising out of or relating to this Agreement or the Purchase Agreement and (ii)
hereby waives, and agrees not to assert in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or that
the venue of the suit, action or proceeding is improper. Each of the Company and
the Purchasers consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing in this
Section 7(f) shall affect or limit any right to serve process in any other
manner permitted by law.

          (g)  Amendments and Waivers.  The provisions of this Agreement,
               ----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and each of the Holders.  Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders and that does not directly or indirectly
affect the rights of other Holders may be given by Holders of at least a
majority of the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be amended,
--------  -------
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.

          (h)  Notices.  Any and all notices or other communications or
               -------
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earlier of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice prior to 5:00 p.m., pacific
standard time, on a Business Day, (ii) the Business Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice later than 5:00 p.m., pacific
standard time, on any date and earlier than 11:59 p.m., pacific time, on such
date, (iii) the Business Day following the date of mailing, if sent by
nationally recognized overnight courier service or (iv) actual receipt by the
party to whom such notice is required to be given.  The addresses for such
communications shall be with respect to each Holder at its address set forth
under its name on Schedule 1 attached hereto, or with respect to the Company,
                  ----------
addressed to:

                                       16
<PAGE>

                    Speedcom Wireless Corporation
                    1748 Independence Boulevard, D-4
                    Sarasota, Florida 34243
                    Attention:  Jay Wright, Chief Financial Officer
                    Telecopier: (941) 358-6208
                    Telephone:  (941) 358-9283

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice.  Copies of notices to any Holder shall be sent to the addresses
listed on Schedule 1 attached hereto, if applicable.  Copies of notices to the
Company shall be sent to Foley & Lardner, One IBM Plaza, 330 N. Wabash Avenue,
Suite 3300, Chicago, Illinois 60611-3608, Attention: Edwin D. Mason, Esq.,
Facsimile No. (312) 755-1925.  Copies of notices to the Holders shall be sent to
(i) Jenkens & Gilchrist Parker Chapin LLP, the Chrysler Building, 405 Lexington
Avenue, New York, New York 10174, Attention: Christopher S. Auguste, Esq.,
Telephone No.: (212) 704-6000, Facsimile No.: (212) 704-6288.

          (i)  Successors and Assigns.  This Agreement shall be binding upon and
               ----------------------
inure to the benefit of the parties and their successors and permitted assigns
and shall inure to the benefit of each Holder and its successors and assigns.
The Company may not assign this Agreement or any of its rights or obligations
hereunder without the prior written consent of each Holder.  Each Holder may
assign its rights hereunder in the manner and to the Persons as permitted under
the Purchase Agreement.

          (j)  Assignment of Registration Rights.  The rights of each Holder
               ---------------------------------
hereunder, including the right to have the Company register for resale
Registrable Securities in accordance with the terms of this Agreement, shall be
automatically assignable by each Holder to any transferee of such Holder of all
or a portion of the shares of Preferred Stock or the Registrable Securities with
the prior written consent of the Company, which consent shall not be
unreasonably withheld; provided, however, that each Holder may assign its rights
                       --------  -------
under this Agreement to any fund which is an affiliate of such Holder.  In
addition, the following conditions must be met:  (i) the Holder agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment, (ii) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (a) the name and address of such
transferee or assignee, and (b) the securities with respect to which such
registration rights are being transferred or assigned, (iii) following such
transfer or assignment the further disposition of such securities by the
transferee or assignees is restricted under the Securities Act and applicable
state securities laws, (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this Section, the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
of this Agreement, and (v) such transfer shall have been made in accordance with
the applicable requirements of the Purchase Agreement.  In addition, each Holder
shall have the right to assign its rights hereunder to any other Person with the
prior written consent of the Company, which consent shall not be unreasonably
withheld.  The rights to assignment shall apply to the Holders (and to
subsequent) successors and assigns.

                                       17
<PAGE>

          (k)  Counterparts.  This Agreement may be executed in any number of
               ------------
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement.
In the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

          (l)  Governing Law.  This Agreement shall be governed by and construed
               -------------
in accordance with the laws of the State of New York, without regard to
principles of conflicts of law thereof.  This Agreement shall not be interpreted
or construed with any presumption against the party causing this Agreement to be
drafted.

          (m)  Cumulative Remedies.  The remedies provided herein are cumulative
               -------------------
and not exclusive of any remedies provided by law.

          (n)  Severability.  If any term, provision, covenant or restriction of
               ------------
this Agreement is held to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction.  It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

          (o)  Headings.  The headings herein are for convenience only, do not
               --------
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

          (p)  Shares Held by the Company and its Affiliates. Whenever the
               ---------------------------------------------
consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company or
its Affiliates (other than any Holder or transferees or successors or assigns
thereof if such Holder is deemed to be an Affiliate solely by reason of its
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage and shall not be counted as outstanding.

          (q)  Notice of Effectiveness.  Within two (2) business days after the
               -----------------------
Registration Statement which includes the Registrable Securities is ordered
effective by the Commission, the Company shall deliver, and shall cause legal
counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Holders whose Registrable Securities are included
in such Registration Statement) confirmation that the Registration Statement has
been declared effective by the Commission in the form attached hereto as Exhibit
                                                                         -------
A.
-

                                       18
<PAGE>

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       19
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed by their respective authorized persons as of the
date first indicated above.

                                               SPEEDCOM WIRELESS CORPORATION

                                               By: /s/ Michael W. McKinney
                                                  -----------------------------
                                                   Name:  Michael W. McKinney
                                                   Title: CEO

                                               SDS MERCHANT FUND, L.P.

                                               By: /s/ Steve Derby
                                                  -----------------------------
                                                   Name:  Steve Derby
                                                   Title: Managing Member

                                               S.A.C. CAPITAL ASSOCIATES, LLC
                                               By: S.A.C. Capital Advisors, LLC

                                               By: /s/ Peter Nussbaum
                                                  -----------------------------
                                                   Name:  Peter Nussbaum
                                                   Title: General Counsel

                                               OSCAR PRIVATE EQUITY INVESTMENTS,
                                               L.P.
                                               By:  Oscar Private Equity, LLC
                                                    General Partner

                                               By: /s/ Timothy F. Sylvester
                                                  -----------------------------
                                                   Name:  Timothy F. Sylvester
                                                   Title: President

                                               By: /s/ Bruce Sanguinetti
                                                  -----------------------------
                                                   Bruce Sanguinetti
<PAGE>

                                               By: /s/ Robert B. Prag
                                                  -----------------------------
                                                   Robert B. Prag

                                               INVESTOR:

                                               By: /s/ George Reichl
                                                  -----------------------------
                                                  Name: George Reichl
                                                  Title

                                               INVESTOR:

                                               By: /s/ Richard C. Ross
                                                  -----------------------------
                                                  Name:  Richard C. Ross
                                                  Title:

                                               INVESTOR:

                                               By: /s/ Thomas L. Shields, Jr.
                                                  -----------------------------
                                                  Name: Thomas L. Shields, Jr.
                                                  Title:

                                               INVESTOR:

                                               By: /s/ William O. Shields
                                                  -----------------------------
                                                  Name:  William O. Shields
                                                  Title:

                                       1
<PAGE>

                                           INVESTOR:
                                             Kessler Family Limited Partnership

                                           By: /s/ Irvin Kessler
                                               -----------------------------
                                               Name:  Irvin Kessler
                                               Title: General Partner

                                           INVESTOR:

                                           By: /s/ Irvin Kessler
                                              -----------------------------
                                              Name: Irvin Kessler
                                              Title:

                                           INVESTOR:

                                           By: /s/ Frank M. Bishop
                                               -----------------------------
                                               Name: Frank M. Bishop
                                               Title:

                                       2
<PAGE>

                                                                       EXHIBIT A
                        FORM OF NOTICE OF EFFECTIVENESS
                           OF REGISTRATION STATEMENT

American Stock Transfer & Trust Company
40 Wall Street
New York, NY 10005
Attn:  _____________

          Re:  Speedcom Wireless Corporation
               -----------------------------

Ladies and Gentlemen:

     We are counsel to Speedcom Wireless Corporation, a Delaware corporation
(the "Company"), and have represented the Company in connection with that
certain Series B Convertible Preferred Stock Purchase Agreement (the "Purchase
Agreement"), dated as of August 23, 2001, by and among the Company and the
purchasers named therein (collectively, the "Purchasers") pursuant to which the
Company issued to the Purchasers shares of its Series B Convertible Preferred
Stock, par value $.001 per share, (the "Preferred Shares") and warrants (the
"Warrants") to purchase shares of the Company's common stock, par value $.001
per share (the "Common Stock").  Pursuant to the Purchase Agreement, the Company
has also entered into a Registration Rights Agreement with the Purchasers (the
"Registration Rights Agreement"), dated as of June 29, 2001, pursuant to which
the Company agreed, among other things, to register the Registrable Securities
(as defined in the Registration Rights Agreement), including the shares of
Common Stock issuable upon conversion of the Preferred Shares and exercise of
the Warrants, under the Securities Act of 1933, as amended (the "1933 Act").  In
connection with the Company's obligations under the Registration Rights
Agreement, on ________________, 2001, the Company filed a Registration Statement
on Form S-3 (File No. 333-________) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") relating to the resale of the
Registrable Securities which names each of the present Purchasers as a selling
stockholder thereunder.

     In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and accordingly, the
Registrable Securities are available for resale under the 1933 Act pursuant to
the Registration Statement.

                                        Very truly yours,

                                        [COMPANY COUNSEL]

                                        By:_________________________________
cc:  [LIST NAMES OF PURCHASERS]

                                       3
<PAGE>

                               SCHEDULE 1 to the
                         REGISTRATION RIGHTS AGREEMENT
                       FOR SPEEDCOM WIRELESS CORPORATION

Names and Addresses of Purchasers
---------------------------------

SDS Merchant Fund, L.P.
c/o SDS Capital Partners
One Sound Shore Drive
Greenwich, CT 06830
Attention: Steve Derby
Fax no.: (203) 629-0345

S.A.C. Capital Associates, LLC
c/o S.A.C. Capital Advisors, LLC
777 Long Ridge Road
Stamford, CT 06902
Attention:  General Counsel
Fax no.: (203) 614-2393

Oscar Private Equity Investments, L.P.
11611 San Vicente Blvd.
Suite 810
Los Angeles, CA 90049
Attention: Tim Sylvester
Fax no.: (310) 622-0023

Bruce Sanguinetti
802 Morning Sun Drive
Encinitas, CA 92024
Fax No.: (877) 290-5168

Robert B. Prag
2455 El Amigo Rd.
Del Mar, CA 92024
Fax No.: (858) 794-9544

George Reichl
353 Park Drive
Palatine, IL 60067
Fax No.: (847) 734-7055

                                       4

<PAGE>

DLJSC for the benefit of
Richard C. Ross
310 Kietro Drive
Linwood, NJ 08221
Attention: Richard C. Ross
Fax No.:  (609) 653-4448

Thomas L. Shields, Jr.
1750 W. Sussex
Atlanta, GA 30306
Fax No.: (404) 439-4925

William Shields
3115 W. Parker #270
Plano, TX 75023
Fax No.: (972) 867-2111

Kessler Family Limited Partnership
130 Sheshire Lane, Suite 102
Minnetonka, MN 55305
Attention: Larry Shapiro
Fax No.:  (952) 249-5320

Irvin Kessler
130 Sheshire Lane, Suite 102
Minnetonka, MN 55305
Attention: Larry Shapiro
Fax No.:  (952) 249-5320

Frank Bishop
6105 Weatherly Drive
Atlanta, GA 30328
Fax No.: (404) 439-4906

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