Document:

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                                                                    EXHIBIT 10.1

                           PURCHASE AND SALE AGREEMENT

                  PURCHASE AND SALE AGREEMENT, dated as of October 5, 2000,
by and among FERMAN AG a corporation organized under the laws of Switzerland
(the "Company"), the stockholders of the Company listed on Schedule I attached
hereto (each a "Seller", and collectively, the "Sellers"), and INTERNET
HOLDINGS, INC., a corporation organized under the laws of the State of Utah (the
"Purchaser").

                              W I T N E S S E T H:

                  WHEREAS, the Sellers own, of record and beneficially, an
aggregate of 20,000 shares (collectively, the "Shares") of the capital stock
(the "Capital Stock"), of the Company, constituting all of the issued and
outstanding shares of Capital Stock of the Company;

                  WHEREAS, the Purchaser desires to purchase from the Sellers,
and the Sellers desire to sell to the Purchaser, all of the Shares, on the terms
and subject to the conditions set forth in this Agreement;

                  NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties hereto agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS

     SECTION 1.01 DEFINITIONS. Unless otherwise defined herein, all capitalized
terms used herein shall have the meanings assigned to them below:

     "Affiliate" of any particular Person means any other Person controlling,
controlled by or under common control with such particular Person, where
"control" means the possession, directly or indirectly, of the power to direct
the management and policies of a Person, whether through the ownership of voting
securities, contract or otherwise.

     "Agreement" means this Agreement, as the same may be amended, supplemented
or modified in accordance with the terms hereof.

     "Authorizations" means any authorization, approval, order, license, permit,
waiver, variance, franchise, grant or consent of, declaration to, or filing or
registration with, any court or governmental authority, and any consent of any
other party.

     "Closing" has the meaning set forth in Section 2.03.

     "Closing Date" has the meaning set forth in Section 2.03.

     "Financial Statements" has the meaning set forth in Section 4.07(a).

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     "GAAP" means United States generally accepted accounting principles.

     "Governmental Authority" means any Federal, state, local, foreign, regional
or other governmental, administrative, judicial or regulatory authority or
instrumentality.

     "Indebtedness" means at a particular time, without duplication, (i) any
indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money, (ii) any indebtedness evidenced by any note,
bond, debenture or other debt security, (iii) any indebtedness for the deferred
purchase price of property or services with respect to which a Person is liable,
contingently or otherwise, as obligor or otherwise (other than trade payables
and other current liabilities incurred in the ordinary course of business which
are not more than three months past due), (iv) any commitment by which a Person
assures a creditor against loss (including, without limitation, contingent
reimbursement obligations with respect to letters of credit), (v) any
indebtedness guaranteed in any manner by a Person (including, without
limitation, guarantees in the form of an agreement to repurchase or reimburse),
(vi) any obligations under capitalized leases with respect to which a Person is
liable, contingently or otherwise, as obligor, guarantor or otherwise, or with
respect to which obligations a Person assures a creditor against loss, (vii) any
indebtedness secured by a Lien on a Person's assets and (viii) any unsatisfied
obligation for "withdrawal liability" to any benefit plan.

     "Lien" means any lien, pledge, mortgage, deed of trust, security interest,
claim, lease, assessment, charge, option, right of first refusal, easement,
servitude, transfer restriction under any shareholder or similar agreement,
encumbrance or any other restriction or limitation of any kind or nature
whatsoever.

     "Losses" has the meaning set forth in Section 9.01.

     "Material Agreements" has the meaning set forth in Section 4.10(a).

     "Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.

     "Portfolio Companies" means, collectively, the companies listed on Schedule
II attached hereto, in each of which the Company is the owner of the shares
thereof specified on Schedule II.

     "Tax" or "Taxes" means any (A) federal, state, local or foreign income,
gross receipt, franchise, estimated, alternative minimum, add-on-minimum,
property, sales, use, transfer, registration, value added, excise, natural
resources, severance, stamp, occupation, premium, windfall profit,
environmental, disability, payroll, license, employment or other withholding, or
other taxes, levies, imports, duties, license and registration fees, charges,
assessments or withholdings of any kind whatsoever, including any interest,
penalties or additions to tax or additional amounts in respect of the foregoing;
and (B) liability for the payment of any amounts of the type described in clause
(A) as a result of any express or implied obligation to indemnify or otherwise
assume or succeed to the liability of any other Person.

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     "Tax Returns" means returns, declarations, reports, claims for refund,
information returns or other documents (including any related or supporting
schedules, statements or information) filed or required to be filed in
connection with the determination, assessment or collection of Taxes of any
party or the administration of any laws, regulations or administrative
requirements relating to any Taxes.

     "United States Dollar" and "$" means the lawful currency of the United
States of America.

     SECTION 1.02 TERMS GENERALLY. The definitions set forth herein apply
equally to both the singular and the plural forms thereof. All references to
Articles, Sections, Exhibits and Schedules will be deemed references to the
Articles, Sections, Exhibits and Schedules to this Agreement, in each case
unless the context shall otherwise require. Except as otherwise expressly
provided in this Agreement, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, and all currency amounts are in United
States Dollars unless otherwise indicated.

                                   ARTICLE II.

                                PURCHASE AND SALE

     SECTION 2.01 PURCHASE OF SHARES. Subject to the terms and conditions of
this Agreement and in reliance upon the representations, warranties and
agreements set forth herein, on the Closing Date, the Sellers shall sell,
convey, assign, transfer and deliver to the Purchaser, and the Purchaser shall,
purchase from the Sellers, an aggregate of 20,000 Shares, each of the Sellers to
sell, convey, assign, transfer and deliver to the Purchaser the Shares set forth
after such Seller's name in Schedule I.

     SECTION 2.02 PURCHASE PRICE. As consideration for the sale, conveyance,
assignment, transfer and delivery to the Purchaser of the Shares pursuant to
this Agreement, the Purchaser shall deliver to the Sellers aggregate
consideration consisting of an aggregate of 2,550,000 shares (the "IH Shares")
of the Common Stock, par value US$0.001 per share, of the Purchaser. The IH
Shares shall be allocated among the Sellers in proportion to their respective
ownership of the Shares as set forth on Schedule I attached hereto.

     SECTION 2.03 CLOSING. At the Closing, the Sellers shall deliver to the
Purchaser the Shares, and all certificates evidencing such Shares, to be sold to
the Purchaser pursuant to this Agreement, in each case duly endorsed in blank or
accompanied by duly executed instruments of transfer in blank, if applicable,
together with all necessary documentary or stock transfer stamps affixed and
accompanied by such other assignments, certificates of authority, consents to
transfer instruments and evidence of title to such Shares as may be reasonably
requested by counsel to the Purchaser in order that all right, title and
interest in and to the Shares pass to the Purchaser from the Sellers.

     SECTION 2.04 CLOSING. The consummation of the purchase and sale of the
Interests pursuant to this Agreement (the "Closing") shall take place at the
offices of the

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Purchaser, 16 Curzon Street, Mayfair, London W1Y 7FF, United Kingdom, or such
other place as the Sellers and the Purchaser may agree, on or before October 17,
2000, at such time or on such other date as the Sellers and the Purchaser may
agree (the "Closing Date").

                                  ARTICLE III.

                  REPRESENTATIONS AND WARRANTIES OF THE SELLERS

     Each of the Sellers, jointly and severally, hereby represents and warrants
to the Purchaser, as follows:

     SECTION 3.01 THE SELLERS.

                  (a) If such Seller is an individual, such Seller is legally
         competent and has full power and authority to execute and deliver this
         Agreement and to perform its respective obligations hereunder and to
         consummate the transactions contemplated hereby.

                  (b) If such Seller is a corporation or other legal entity,
         such Seller has full power and authority to execute and deliver this
         Agreement and to perform its respective obligations hereunder and to
         consummate the transactions contemplated hereby. Each such Seller has
         taken all necessary corporate or other action to duly and validly
         authorize the execution, delivery and performance of this Agreement by
         such Seller and the consummation by such Seller of the transactions
         contemplated hereby.

     SECTION 3.02 BINDING OBLIGATION. This Agreement has been duly executed and
delivered by each Seller and (and assuming the execution and delivery of this
Agreement by the Purchaser) constitutes, and each of the other agreements,
instruments, documents and certificates contemplated hereby when executed and
delivered for value, will constitute, the legal, valid and binding obligation of
each Seller, enforceable against such Seller in accordance with their respective
terms, except to the extent that (i) enforcement may be limited by or subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or limiting creditor's rights generally and (ii) the remedy of
specific performance and injunctive and other forms of equitable relief are
subject to certain equitable defenses and to the discretion of the court or
other similar entity before which any proceeding therefor may be brought.

     SECTION 3.03 APPROVALS. Except as set forth on Schedule 3.03, no
authorizations, approvals, consents of, and no filings or registrations with,
any Governmental Authority are necessary for the execution, delivery or
performance of this Agreement by any of the Sellers or the Company.

     SECTION 3.04 NO CONFLICTS. Neither the execution nor delivery of this
Agreement nor the consummation of the transactions contemplated hereby, nor the
compliance by the Sellers with the terms and provisions hereof will (a) conflict
with or result in a breach of, or require any consent or vote of any Person
under, the respective certificates of incorporation or by-laws, if any, of the
Sellers or any note, mortgage, indenture, contract, collective bargaining
agreement or any other agreement to which any Seller is a party or by which any
Seller or any of

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their respective properties is subject, (b) violate any applicable law,
regulation, order, writ, injunction or decree of any Governmental Authority, or
(c) constitute or result in a breach or violation of or a default under, or
result in the imposition of any Lien, charge or encumbrance on any of the assets
of the Company or any Seller, including the Shares owned by each Seller.

     SECTION 3.05 LITIGATION. There is no action, proceeding or investigation to
which the Company or any Seller is a party or to which the Company or any Seller
or any of their respective properties may be subject by or before any court or
any arbitral, governmental or regulatory authority or agency, pending or to the
knowledge of any Seller threatened, which, if adversely determined, could have
individually or in the aggregate a material adverse effect on the ability of the
Sellers to execute, deliver and perform this Agreement or the condition,
financial or otherwise, of the Company.

     SECTION 3.06 PRIVATE SALE OF IH SHARES. Each Seller acknowledges and agrees
that the IH Shares have not been registered under the United States Securities
Act of 1933, as amended, and accordingly, the IH Shares are "restricted
securities" and may not be resold except pursuant to the United States
Securities Act of 1933, as amended, and the rules and regulations thereunder.
Each Seller is acquiring the IH Shares to be issued to it for its own account
and not with a view to the distribution thereof.

                                   ARTICLE IV.

       REPRESENTATIONS AND WARRANTIES OF THE SELLERS REGARDING THE COMPANY

     Each of the Sellers, jointly and severally, hereby represents and warrants
to the Purchaser, as follows:

     SECTION 4.01 ORGANIZATION. The Company (a) is a corporation, duly
organized, validly existing and in good standing under the laws of Switzerland,
(b) has all requisite power, and all material governmental licenses,
authorizations, consents and approvals, necessary to own its assets and carry on
its business as currently being conducted, and (c) is qualified to do business
in all foreign jurisdictions in which the nature of the business conducted by it
and the properties owned or operated by it make such qualification necessary and
where the failure to so qualify could, individually or in the aggregate, have a
material adverse effect on the business or condition, financial or otherwise, of
the Company.

     SECTION 4.02 CAPITALIZATION OF THE COMPANY. The Company has authorized an
aggregate of 20,000 shares of its Capital Stock. The Sellers constitute all of
the stockholders of the Company. Each Seller has good and marketable title to
its Shares, and each Seller owns its Shares free and clear of all Liens. Neither
the Company nor any Seller has granted to any Person any option or right to
acquire any shares of capital stock or any security convertible into or
exchangeable for and giving a right to purchase any shares of the Common Stock
of the Company.

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     SECTION 4.03 APPROVALS. Neither the execution nor delivery of this
Agreement nor the consummation of the transactions contemplated hereby requires
the consent of any Person.

     SECTION 4.04 NO CONFLICTS. Neither the execution nor delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
conflict with or result in a breach of, or require any consent or vote of any
Person under, any note, mortgage, indenture, contract, collective bargaining
agreement or any other agreement to which the Company is a party or by which the
Company or any of its properties is subject, (b) violate any applicable law,
regulation, order, writ, injunction or decree of any Governmental Authority, or
(c) constitute or result in a breach or violation of or a default under, or
result in the imposition of any Lien, charge or encumbrance on any of the assets
of the Company or the Shares owned by any Seller.

     SECTION 4.05 LITIGATION. There is no claim, dispute, action, suit,
proceeding or investigation pending or, to the best knowledge of the Sellers,
threatened, against or affecting the Company or the Company's business or any of
the Company's officers, at law or in equity or admiralty before any court,
tribunal or other governmental authority, board, agency, commission or
instrumentality which, if adversely determined, would, singly or in the
aggregate, have a material adverse effect on the Company or the ability of the
Sellers to perform their obligations under this Agreement or which would
challenge the validity or propriety of the transactions contemplated hereby.
There is no outstanding judgment, order, writ, ruling, injunction, stipulation
or decree of any court, arbitrator other governmental authority, board, agency,
commission or instrumentality, against or materially affecting the Company or
the Company's business. The Company has not violated and is not in default with
respect to, any judgment, order, writ, ruling, injunction, stipulation or decree
applicable to it. Neither the Company nor any of its officers or members has
received any written or verbal inquiry from any governmental authority, board,
agency, commission or instrumentality concerning the possible violation of any
law, rule or regulation or any matter.

     SECTION 4.06 SUBSIDIARIES AND JOINT VENTURES; PORTFOLIO COMPANIES.

     (a) The Company does not have any subsidiaries nor does it own, directly or
 indirectly, any capital stock or equity interest in any corporation,
 partnership, joint venture, limited liability company or other entity.

     (b) The Company owns its investments in the Portfolio Companies, free and
 clear of all Liens. Neither the Company nor any Seller has granted to any
 Person any option or right to acquire any shares of capital stock or any
 security convertible into or exchangeable for and giving a right to
 purchase any shares of any of the Portfolio Companies.

     SECTION 4.07 FINANCIAL STATEMENTS.

     (a) The Sellers have furnished to the Purchaser (i) the Company's financial
 statements for the fiscal year ended December 31, 1999, including the notes
 thereto, as audited by KPMG, and (ii) the Company's unaudited consolidated
 and consolidating

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 financial statements for the six-month period ended June 30, 2000
 (collectively, the "Financial Statements").

     (b) The Financial Statements have been prepared in accordance with
 accounting principles generally accepted in Switzerland, applied on a basis
 consistent throughout all periods presented; such statements are correct
 and complete in all material respects, are reconcilable to the books and
 records of the Company, and present fairly the financial position of the
 Company as of the dates, and the results of operations, cash flows and
 changes in financial position of the Company for the periods, indicated,
 except in the case of such interim financial statements, for the omission
 of footnotes and for year-end review adjustments which are not expected to
 be, singly or in the aggregate, material in amount. The books of account
 and other financial records of the Company have been maintained in
 accordance with good business practices.

     (c) The Company's assets consist only of its investments in the Portfolio
 Companies.

     (d) The Company has no material liabilities or obligations, whether secured
 or unsecured, accrued, determined, absolute or contingent, asserted or
 unasserted or otherwise, which are required to be reflected or reserved in
 a balance sheet or the notes thereto in accordance with the accounting
 principles consistently applied by the Company, but which are not reflected
 in the Financial Statements.

     SECTION 4.08 EMPLOYEE MATTERS.

     (a) Schedule 4.08 sets forth the name of each director, officer, and key
 employees of the Company. The Company has provided the Purchaser with true and
 complete copies of all employment agreements or consulting agreements with each
 such director, officer or key employee.

     (b) The Company has not violated in any material respect any law or
 regulation governing employers and the conditions of employees' employment,
 including those regulating wages, hours, discrimination, civil rights and
 employment of foreign nationals.

     (c) The Company does not have any employee benefit plans.

     SECTION 4.09 TAXES. Except as indicated in Schedule 4.09, the Company has
filed all Tax Returns which were required to be filed prior to the date hereof
(after giving effect to all extensions of filing deadlines obtained) in respect
of all Taxes and has paid all Taxes which have become due pursuant to such Tax
Returns or pursuant to any assessment which has become payable, or, to the
extent its liability for any Taxes has not been fully discharged, the same have
been properly reflected as a liability on the Company's books and records and
adequate reserves therefor have been established. All such Tax Returns have been
properly prepared and are complete. Except as indicated in Schedule 4.09, no
extension for the filing of any such Tax Return is currently in effect. No Tax
Return or Tax Return liability of the Company is presently under audit or, to
the best knowledge of the Sellers, proposed to be audited. Except as indicated
in Schedule 4.09, the Company has not given or been requested to give waivers of
any statute of

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limitations relating to the payment of any Taxes. There are no claims pending
or, to the best knowledge of the Sellers, threatened, against the Company for
past due Taxes. All payments for withholding Taxes, unemployment insurance and
other amounts required to be paid for periods prior to the date hereof to any
Governmental Authority in respect of the Company's employment obligations, have
been paid or shall be paid prior to Closing. Such amounts have been duly
provided for on the books and records of the Company and in the Financial
Statements. No claim has been made by a taxing authority in a jurisdiction where
the Company does not file a Tax Return that the Company is or may be subject to
Taxes assessed by such jurisdiction.

     SECTION 4.10 MATERIAL AGREEMENTS; NO DEFAULTS.

     (a) Schedule 4.10 sets forth a complete and correct list of all
instruments, agreements, indentures, mortgages, guarantees, notes,
commitments, accommodations, letters of credit or other arrangements or
understandings, whether oral or written, to which the Company is a party or
pursuant to which the Company is obligated (the "Material Agreements"). The
Material Agreements constitute all of the contracts, agreements,
understandings and arrangements required for the operation of the Company's
business as currently conducted or which have a material effect thereon.
Copies of all such Material Agreements, or if oral, written summaries
thereof, have previously been delivered to the Purchaser, and such copies
and summaries are complete and correct as of the date hereof.

     (b) Each of the Material Agreements was entered into in the ordinary
course of the Company's business, is in full force and effect on the date
hereof and is valid, binding and enforceable in accordance with its terms.
Except as disclosed in Schedule 4.10, neither the Company nor, to the
Sellers' best knowledge, any other person or entity is in breach of, or in
default under, any Material Agreement, and no event or action has occurred,
is pending or is threatened, which, after the giving of notice, passage of
time or otherwise, would constitute or result in such a breach or default by
the Company or, to the best knowledge of the Sellers, any other person  or
entity party to a Material Agreement. The Company has not received any
notice of default under any Material Agreement, which default has not been
cured to the satisfaction of, or duly waived by, the party claiming such
default on or before the date hereof.

     (c) Except as set forth in Schedule 4.10, none of the Sellers has taken
or omitted to take any action which has resulted in, or will result in, the
Company being or becoming a party to or bound by, any agreement, arrangement
or understanding to which the Company will remain obligated or bound
following the Closing, relating to the acquisition by the Company of any
entity or all or substantially all of the assets of any Person.

     SECTION 4.11 PERSONAL PROPERTY. The Company does not own any tangible
personal property or  assets.

     SECTION 4.12 REAL PROPERTY. The Company owns no real property. The Company
is not a party to any leases of real property.

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     SECTION 4.13 PERMITS AND LICENSES. The Company has all Authorizations which
are reasonably necessary to conduct the Company's business and to own its
assets. The Company has not received any notice or claim pertaining to the
failure to obtain any material Authorization, the failure of which to obtain
would materially and adversely affect the Company's business, and the Sellers do
not know of any basis for such claim.

     SECTION 4.14 COMPLIANCE WITH LAW. The Company is not conducting its
business or affairs in material violation of any applicable law, ordinance,
rule, regulation, court or administrative order, decree or process. The Company
has not received any notice of violation or claimed violation of any law,
ordinance, rule, regulation, order, decree, process or requirement.

     SECTION 4.15 ORDINARY COURSE. Since December 31, 1999, the Company has
conducted its business, maintained its assets and kept its books of account,
records and files, substantially in the same manner as previously conducted,
maintained or kept and solely in the ordinary course. Since December 31, 1999,
the Company has not incurred any material liabilities, sold or otherwise
transferred any material assets, waived or cancelled any material rights or
incurred any material commitments except in the ordinary course of business.

     SECTION 4.16 NO ADVERSE CHANGES. Except as otherwise contemplated hereby,
since December 31, 1999, there has not been any material adverse change in the
Company's business, the prospects, financial or other condition thereof, or
assets or liabilities, as reflected in the Financial Statements.

     SECTION 4.17 MISCELLANEOUS. The representations and warranties made by the
Sellers in this Agreement and the statements made by or on behalf of the Sellers
in any certificate, document, exhibit or schedule furnished in connection with
the transactions contemplated hereby, do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make such
representations or warranties or other such statements not false or misleading.

                                   ARTICLE V.

                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     The Purchaser represents and warrants to each of the Sellers that:

     SECTION 5.01 DUE INCORPORATION. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Utah. The Purchaser has full corporate power and authority to own, lease and
operate its properties and to carry on its business in the places and in the
manner currently conducted or proposed to be conducted.

     SECTION 5.02 DUE AUTHORIZATION; VALID OBLIGATION. The Purchaser has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The Purchaser has taken
all corporate action

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necessary to authorize it to execute and deliver this Agreement and to
consummate the transactions contemplated hereby, and this Agreement constitutes
the valid and binding obligation of the Purchaser enforceable in accordance with
its terms.

     SECTION 5.03 NO CONFLICTS. The execution and delivery by the Purchaser of
this Agreement and the other Transaction Documents to which it is a party, and
the consummation of the transactions contemplated hereby and thereby do not and
shall not (a) contravene the Articles of Incorporation or By-Laws of the
Purchaser, or (b) with or without the giving of notice or the passage of time,
violate, conflict with, or result in a breach of, or a default or loss of rights
under, any covenant, agreement, mortgage, indenture, lease or instrument to
which the Purchaser is a party or by which the Purchaser or any of its assets
are bound or any judgment, order, decree, law, rule or regulation to which the
Purchaser or any of its are subject.

     SECTION 5.04 AUTHORIZATIONS. Any authorization from any court or
Governmental Authority or any other person or entity which is not a party to
this Agreement which is required in connection with the execution, delivery and
performance of the Transaction Documents by the Purchaser has been obtained or
shall be obtained prior to or as of the Closing Date. There is no pending or, to
the knowledge of the Purchaser threatened, claim, action, suit, investigation or
proceeding against the Purchaser before any court, arbitrator or Governmental
Authority which, if determined adversely to the Purchaser, would have a material
adverse effect on the ability of the Purchaser to perform its obligations under
the Transaction Documents to which it is a party.

     SECTION 5.05 MISCELLANEOUS. The representations and warranties made by the
Purchaser in this Agreement and the statements made by or on their behalf in any
certificate, document or exhibit furnished in connection with the transactions
contemplated hereby do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make such representations
or warranties or other such statement.

                                   ARTICLE VI.

                 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER

     The obligations of the Purchaser under this Agreement are subject to the
satisfaction, on or prior to the Closing Date, of the following conditions, any
of which may be waived in whole or in part by the Purchaser, in its sole
discretion:

     SECTION 6.01 DUE PERFORMANCE; ACCURACY OF REPRESENTATIONS AND WARRANTIES.

     (a) The Sellers shall have fully performed and complied in all material
 respects with all agreements and conditions required by this Agreement to
 be performed or complied with by them on or prior to the Closing Date;

     (b) All representations and warranties of the Sellers set forth in this
 Agreement shall be true and correct in all material respects, on and as of
 the Closing Date, as though made on and as of the Closing Date; and

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     (c) Each Seller shall deliver a certificate certifying that the statements
 in paragraphs (a) and (b) are true and correct on and as of the Closing Date.

     SECTION 6.02 CLOSING DATE BALANCE SHEET. The Sellers shall have delivered
to the Purchaser (a) the Financial Statements, and (b) a reconciliation of the
Financial Statements to GAAP.

     SECTION 6.03 TRANSFER OF SHARES. The Sellers shall deliver to the Purchaser
the Shares, and all certificates evidencing such Shares, to be sold to the
Purchaser pursuant to this Agreement, in each case duly endorsed in blank or
accompanied by duly executed instruments of transfer in blank, if applicable,
together with all necessary documentary or stock transfer stamps affixed and
accompanied by such other assignments, certificates of authority, consents to
transfer instruments and evidence of title to such Shares as may be reasonably
requested by counsel to the Purchaser in order that all right, title and
interest in and to the Shares pass to the Purchaser from the Sellers.

     SECTION 6.04 PORTFOLIO COMPANIES. The Sellers shall cause to be delivered
to the Purchaser any and all certificates or other evidences of ownership of the
Company's investment in the Portfolio Companies, in each case showing that the
Company is the record and beneficial owner of such investments in the Portfolio
Companies.

     SECTION 6.05 CORPORATE DOCUMENTS. The Sellers shall have delivered or
caused to be delivered to the Purchaser:

     (a) a copy of the Company's Articles and Memorandum of Association, as
 amended through the Closing Date, certified by the secretary of the Company;

     (b) certificates of the Secretary or Assistant Secretary, or such other
 authorized officer, of the Company including (i) duly enacted resolutions
 of the Company's board of directors or other governing body, as
 appropriate, in form and substance satisfactory to the Purchaser approving
 this Agreement and the transactions contemplated hereby and authorizing
 officers of the Company to execute and deliver instruments required to be
 delivered hereunder as a condition precedent to the Closing, and (ii)
 specimen signatures of the officers of the Company authorized to sign such
 instruments;

     (c) certificate of the Secretary or such other authorized officer, of each
 Seller (other than a Seller who is an individual) including (i) duly
 enacted resolutions of such Seller's board of directors approving this
 Agreement and the transactions contemplated hereby and authorizing officers
 of such Seller to execute and deliver instruments required to be delivered
 hereunder as a condition precedent to the Closing, (ii) the By-Laws of such
 Seller, and (iii) specimen signatures of the officers of such Seller
 authorized to sign such instruments.

     SECTION 6.06 NO CLAIMS. No claim, action, suit, investigation or proceeding
shall be pending or threatened against any of the parties hereto or any of their
respective Affiliates which, if adversely determined, would (a) prevent or
hinder consummation of the transactions contemplated by this Agreement or any of
the agreements attached hereto as

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Exhibits, or (b) materially and adversely affect the Company's investment in the
Portfolio Companies.

     SECTION 6.07 CONSENTS AND GOVERNMENTAL APPROVALS. The Purchaser shall have
received all Authorizations, if any, of all relevant Governmental Authorities
required in connection with the consummation of the transactions contemplated
hereby or to preserve the Company's business and the Company's rights under any
material agreements, without the imposition of any materially burdensome
expense, conditions or restrictions, and all of which shall be in full force and
effect on the Closing Date.

     SECTION 6.08 SATISFACTION OF COUNSEL. All actions, proceedings,
instruments, documents and other relevant legal matters in connection with the
transactions contemplated by this Agreement or any of the agreements attached
hereto as Exhibits, shall be reasonably satisfactory in all respects to counsel
for the Purchaser.

                                  ARTICLE VII.

                    CONDITIONS TO OBLIGATIONS OF THE SELLERS

     The obligations of the Sellers under this Agreement are subject to the
satisfaction, on or prior to the Closing Date, of the following conditions, any
of which may be waived in whole or in part by all of the Sellers in their sole
discretion:

     SECTION 7.01 DUE PERFORMANCE. The Purchaser shall have fully performed and
complied in all material respects with all of their respective agreements and
conditions required by this Agreement to be performed or complied with by it on
or prior to the Closing Date.

     SECTION 7.02 ACCURACY OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the Purchaser set forth in this Agreement
shall be true and correct in all material respects, on and as of the Closing
Date as though made on and as of the Closing Date.

     SECTION 7.03 CONSIDERATION. The Sellers shall have received the IH Shares
registered in such names and in such amounts as are set forth on Schedule I
attached hereto.

     SECTION 7.04 CORPORATE DOCUMENTS. The Purchaser shall have delivered or
caused to be delivered to the Sellers:

     (a) a copy of the Purchaser's Articles of Incorporation, as amended through
 the Closing Date, and in each case certified by the respective Secretary of
 the Purchaser; and

     (b) certificates of the Secretary or Assistant Secretary, or such other
 authorized officer, of the Purchaser including (i) duly enacted resolutions
 of the Company's board of directors approving this Agreement and the
 transactions contemplated hereby and authorizing the officers of the
 Purchaser to execute and deliver instruments required to be delivered
 hereunder as a condition precedent to the Closing,

                                      -12-
<PAGE>

 and (ii) specimen signatures of the officers of the Purchaser authorized to
 sign such  instruments.

     SECTION 7.05 NO CLAIMS. No claim, action, suit, investigation or proceeding
shall be pending or threatened against any of the parties hereto or any of their
respective Affiliates which, if adversely determined, would prevent or hinder
consummation of the transactions contemplated by this Agreement or any of the
agreements attached hereto as Exhibits.

     SECTION 7.06 CONSENTS AND GOVERNMENTAL APPROVALS. The Sellers shall have
received all material consents and waivers of third parties, and all
authorizations of all relevant Governmental Authorities, required in connection
with the consummation of the transactions contemplated hereby, all of which
shall be in full force and effect on the Closing Date.

     SECTION 7.07 SATISFACTION OF COUNSEL. All actions, proceedings,
instruments, documents and other relevant legal matters in connection with the
transactions contemplated by this Agreement or any of the agreements attached
hereto as Exhibits, shall be reasonably satisfactory in all respects to counsel
for the Sellers.

                                  ARTICLE VIII.

          CONDUCT OF BUSINESS OF THE COMPANY PRIOR TO THE CLOSING DATE

     SECTION 8.01 FURTHER INVESTIGATION. Between the date of this Agreement and
the Closing Date, the Sellers shall, and the Sellers shall cause the Company to,
give to the Purchaser and their representatives full access during normal
business hours to all of the Company's premises, files, books and records and
cause its officers to furnish such financial and operating data and other
information with respect to the Company's business and properties as the
Purchaser shall from time to time request; PROVIDED, HOWEVER, that any such
investigation shall be conducted in such manner as not to interfere unreasonably
with the operation of the Company's business. During such investigation, the
Purchaser and its representatives, shall have the right to make copies of, or
excerpts from, such files, books and records as they may deem advisable. If this
Agreement is not consummated, the Purchaser and their representatives shall
return to the Company all copies made by or furnished to them of materials
belonging to the Company. At all times prior to the Closing and, if this
Agreement is not consummated, thereafter, and the Purchaser shall, and shall
cause its officers, directors, employees, agents and representatives to, keep
secret and not divulge to any third party or otherwise use for their own benefit
(other than in connection with the transactions contemplated by this Agreement)
any confidential or proprietary information of the Company to which the
Purchaser obtains access pursuant to this Section 8.01; PROVIDED, HOWEVER, that
such obligation shall not apply to any information to the extent that (i) it is
or becomes part of public or industry knowledge or literature as a result of
causes other than the acts or omissions of the Purchaser or its officers,
directors, employees, agents or representatives, (ii) can be demonstrated to
have been known to the Purchaser prior to its receipt from the Company or a
Seller, or (iii) is received by the Purchaser in good faith from a third party.

                                      -13-
<PAGE>

     SECTION 8.02 PRESERVE BUSINESS. Between the date of this Agreement and the
Closing Date, the Sellers shall use their best efforts to cause the Company to
preserve substantially intact the Company's business organization, keep
available the services of the Company's present officers and employees involved
in the Company's business and preserve the Company's present relationships with
persons having significant business relations therewith and shall conduct the
Company's business only in the ordinary course, except as otherwise contemplated
hereby or disclosed in the Schedules attached to this Agreement. Without
limiting the generality of the foregoing, the Sellers shall not without the
prior written consent of the Purchaser, except as specifically required by this
Agreement, permit the Company to (i) issue or commit to issue any securities or
interests convertible into or exchangeable for securities of the Company, (ii)
grant or commit to grant any options, warrants or other rights to subscribe for
or purchase or otherwise acquire any securities of the Company, (iii) declare,
set aside, or pay any dividend or make any distribution with respect to its
outstanding equity securities, (iv) directly or indirectly redeem, purchase or
otherwise acquire or commit to acquire any capital stock or other ownership
interest of any person, (v) effect a split or reclassification of its capital
stock, (vi) amend its Memorandum and Articles of Association or other governing
instrument, (vii) borrow or agree to borrow any funds, except in the ordinary
course of business, (viii) waive or commit to waive any rights of substantial
value, (ix) sell, exchange, or otherwise dispose of, or cause or suffer the
sale, exchange or other disposition of any significant part of its assets,
except in the ordinary course of business, (x) mortgage, pledge or subject (or
suffer to be subjected) any of its assets to any Lien, (xi) create any
receivable (including, without limitation, accounts receivable, notes, advances
and receivables due from Affiliates) except in BONA FIDE transactions in the
ordinary course of business, (xii) acquire (by purchase of assets or stock,
merger, consolidation or otherwise) or sell, transfer or otherwise dispose of,
any assets in excess of an aggregate amount of US$50,000, or cancel any debts or
claims in excess of such aggregate amount, except in the ordinary course of
business, (xiii) sell, assign, license or transfer any right, title or interest
in or to any Intellectual Property, (xiv) make any material change in the
accounting methods or practices currently employed by the Company, or (xv)
manage the Company's working capital other than in the ordinary course.

     SECTION 8.03 PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES OF THE
SELLERS. Between the date of this Agreement and the Closing Date, the Sellers
shall refrain from taking, and shall cause the Company to refrain from taking,
without the prior written consent of the Purchaser, any action which would
render any of the representations or warranties made by the Sellers in this
Agreement set forth in this agreement materially inaccurate as of the Closing
Date. The Sellers shall notify the Purchaser promptly of the occurrence of any
matter, event or change in circumstances after the date hereof that would have
been required to be disclosed in the Schedules to this Agreement if it had
occurred prior to the date hereof, but such notification shall not affect any of
the Purchaser's rights under this Agreement.

     SECTION 8.04 CONSENTS AND WAIVERS. The parties hereto shall cooperate with
each other and use best efforts to obtain all consents and waivers to the
transactions contemplated hereby required under all agreements, mortgages,
indentures, contracts, licenses, franchises, permits, leases or other
instruments, the withholding of which consents or waivers could have a material
adverse effect on the condition, business or assets of the Company.

                                      -14-
<PAGE>

                                   ARTICLE IX.

                                 INDEMNIFICATION

     SECTION 9.01 OBLIGATIONS OF THE SELLERS. Each of the Sellers, jointly and
severally, agrees to defend, indemnify and hold harmless the Purchaser (which
for the purposes of this Section 9.01 shall include the Purchaser's respective
affiliates, directors, officers, employees, agents, advisors and
representatives) from and against, and to reimburse the Purchaser with respect
to, all liabilities, losses, costs and expenses, including, without limitation,
reasonable attorneys' fees and disbursements ("Losses"), asserted against or
incurred by the Purchaser by reason of, arising out of, or in connection with:

     (a) any breach of any representation, warranty, covenant or agreement
 contained in this Agreement made by the Sellers or in any document or
 certificate delivered by the Sellers to the Purchaser pursuant to the
 provisions of this Agreement;

     (b) any claim, demand, action, suit, proceeding or investigation involving
 the Company arising at any time and not disclosed in the Schedules to this
 Agreement relating to a state of facts, action or omission to act arising
 on or prior to the Closing Date or the allegation by any third party of the
 existence of any state of facts which, if existing, would constitute a
 breach of any representation or warranty referred to in clause (a) of this
 Section 9.01; and

     (c) any Taxes incurred by the Company on or prior to the Closing Date or
 which otherwise relate to taxable years or periods of the Company ended or
 ending on or prior to the Closing Date or which arise as a result of or in
 connection with the transactions contemplated hereby (including, without
 limitation, any federal, state, local or foreign documentary, transfer or
 other Taxes which are required to be paid in connection with the sale,
 transfer, exchange, conveyance, assignment and delivery of the Interests to
 the Purchaser hereunder).

     SECTION 9.02 INDEMNIFICATION PROCEDURE.

     (a) In the case of a claim pursuant to Section 9.01, the Purchaser shall
 give notice to the Sellers as promptly as practicable of (i) the allegation
 by it of any breach or failure referred to in Section 9.01(a), setting
 forth to the extent known the amount of indemnification claimed, (ii) the
 allegation by any third party of the existence of any matter or state of
 facts referred to in Section 9.01(b), or (iii) the incurrence of any Taxes
 referred to in Section 10.01(c); PROVIDED that the rights of the Purchaser
 shall not be affected by any delay in providing such notice except to the
 extent that the Sellers are actually prejudiced thereby.

     (b) Upon receipt of notice pursuant to Section 9.02(a), the indemnifying
 party shall have 10 days in which to dispute the claim asserted by sending
 written notice thereof to the indemnified party (a "Dispute Notice"). The
 indemnifying party shall not be entitled to dispute a claim based on a
 final judgment or order of a court of competent jurisdiction. If no Dispute
 Notice is received prior to the expiration of the 10-day period,

                                      -15-
<PAGE>

 the indemnified party shall be entitled to receive full payment of the
 amount of the claim. If a Dispute Notice is received prior to the
 expiration of the 10-day period, the parties shall negotiate in good faith
 to resolve the dispute. If the parties are unable to resolve the dispute
 within 30 days of the receipt of the Dispute Notice, the dispute shall be
 submitted to arbitration. Such arbitration shall be conducted according to
 the applicable rules of the American Arbitration Association and shall take
 place in New York, New York before a single arbitrator, who shall be
 designated by the Purchaser and the Sellers or, if they are unable to agree
 within 10 days after the dispute is submitted to arbitration, by the
 American Arbitration Association. The decision of the arbitrator shall be
 final and binding upon the parties hereto.

     SECTION 9.03 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations and warranties and statements made by the Sellers in this
Agreement or in any document or certificate delivered pursuant hereto shall
survive the Closing Date and for a period of one year from the Closing Date, and
in each case shall be unaffected by any investigation made by or on behalf of
any party hereto, by knowledge obtained as a result thereof or otherwise or by
any notice of breach of, or failure to perform under, this Agreement which is
not effectively waived in accordance herewith.

                                   ARTICLE X.

                                  MISCELLANEOUS

     SECTION 10.01 EXPENSES. Each of the parties hereto shall bear and pay all
costs, expenses and fees incurred by it on its behalf incident to the
preparation, execution and delivery of this Agreement, any agreements
contemplated hereby, including those attached as Exhibits and Schedules hereto,
and the performance of such party's obligations hereunder or thereunder, whether
or not the transactions contemplated by this Agreement are consummated,
including, without limitation, any broker's or finder's fees, costs incident to
the transfer of any securities and the fees and disbursements of attorneys,
accountants and consultants (including investment banking advisors) employed by
such party,

     SECTION 10.02 FURTHER ASSURANCES. From time to time after the date of this
Agreement, each of the parties hereto, at the request of the other, and without
further consideration, shall execute and deliver such further documents or
instruments and shall take such other actions as the requesting party may
reasonably request in order to effect complete consummation of the transactions
contemplated by this Agreement.

     SECTION 10.03 NOTICES. All communications, notices, requests, consents or
demands given or required under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered to, sent by facsimile with
acknowledged receipt or recognized courier service with acknowledged receipt, or
five (5) days after being mailed by prepaid registered or certified mail
addressed to, the party for whom intended, as follows, or to such other address
as may be furnished by such party by notice in the manner provided herein:

     (a) If to the Sellers:

                                      -16-
<PAGE>

     Dr. Alexander Nill
     2 Roberts Mews
     London SW1X 8DA
     United Kingdom

     and

     Stephan Rind
     Roggenweg No. 20
     50933 Cologne
     Germany

     (b)      If to the Purchaser:

     Internet Holdings, Inc.
     16 Curzon Street
     London W1Y 7FF
     United Kingdom

     with a copy to:

     Salans Hertzfeld Heilbronn Christy & Viener
     620 Fifth Avenue
     New York, New York 10020
     Attention:  Steven R. Berger, Esq.
     Fax: (212) 307-3308 or (212) 632-5555

     SECTION 10.04 ENTIRE AGREEMENT. This Agreement, together with the Schedules
and Exhibits hereto, and the instruments and agreements to be executed pursuant
to this Agreement, sets forth the entire understanding of the parties hereto
with respect to its subject matter, merges and supersedes all prior and
contemporaneous understandings with respect to its subject matter and may not be
waived or modified, in whole or in part, except by a writing signed by each of
the parties hereto. No waiver of any provision of this Agreement in any instance
shall be deemed to be a waiver of the same or any other provision in any other
instance. Failure of any party to enforce any provision of this Agreement shall
not be construed as a waiver of its rights under such provision.

     SECTION 10.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon,
enforceable against and inure to the benefit of, the parties hereto and their
respective heirs, administrators, executors, personal representatives,
successors and assigns, and nothing herein is intended to confer any right,
remedy or benefit upon any other person. This Agreement may not be assigned by
any party hereto except with the prior written consent of all the other parties,
which consent shall not be unreasonably withheld.

     SECTION 10.06 GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with the laws of England and Wales.

                                      -17-
<PAGE>

     SECTION 10.07 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     SECTION 10.08 CONSTRUCTION. Headings contained in this Agreement are for
convenience only and shall not be used in the interpretation of this Agreement.
References herein to Articles, Sections, Schedules and Exhibits are to the
articles, sections, schedules and exhibits, respectively, of this Agreement. The
Schedules and all Exhibits to this Agreement are hereby incorporated herein by
reference and made a part of this Agreement. As used herein, the singular
includes the plural, and the masculine, feminine and neuter gender each includes
the others where the context so indicates.

     SECTION 10.09 SEVERABILITY. If any provision of this Agreement is held to
be invalid or unenforceable by a court of competent jurisdiction, this Agreement
shall be interpreted and enforceable as if such provision were severed or
limited, but only to the extent necessary to render such provision and this
Agreement enforceable.

     SECTION 10.10 SPECIFIC PERFORMANCE. The Sellers acknowledge that money
damages would not be a sufficient remedy for any breach by the Sellers of this
Agreement and agrees that the Purchaser shall be entitled to specific
performance and injunctive relief as remedies for any such breach.

                                      -18-
<PAGE>

     IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the date first set forth above.

Company:                                          FERMAN AG

                                                  By /s/ MARTIN LECHNER
                                                    ----------------------------
                                                    Name: Martin Lechner
                                                    Title: Director

Sellers:
                                                    /s/ DR. ALEXANDER NILL
                                                  ------------------------------
                                                      Dr. Alexander Nill

                                                  STEPHAN RIND
                                                  By /s/ STEPHAN RIND
                                                    ---------------------------
                                                    Name:
                                                    Title:

Purchaser:                                        INTERNET HOLDINGS, INC.

                                                  By /s/ STEFAN ALLESCH-TAYLOR
                                                    ----------------------------
                                                    Name: Stefan Allesch-Taylor
                                                    Title: President and Chief
                                                           Executive Officer

                                      -19-
<PAGE>

                                   SCHEDULE I

                                     SELLERS

Dr. Alexander Nill                          13,334 shares

Stephan Rind                                 6,666 shares

                                      -20-
<PAGE>

                                   SCHEDULE II

                               PORTFOLIO COMPANIES

            Name                                   Number of Shares
            ----                                   -----------------
        TopTier Software                               311,132
        Schweizerische Gesellschaft
            fur Aktienhandel und Research AG ("SGA")    13,500
        Newtron                                            666
        Neomedia Inc.                                  105,000
        Firetalk                                        95,239
        Open Mind Systems AG                                44
        Alaron.com                                      68,419
        Metrotainment AG                                50,000

                                      -21-
<PAGE>

SCHEDULE 3.03

NONE

SCHEDULE 4.08

DIRECTORS:
----------
PRESIDENT:     Martin Lechner
MEMBER:        Paul Schuler
MEMBER:        Karl Schleich

EMPLOYMENT CONTRACTS:
---------------------
AS PROVIDED--MARTIN LECHNER

SCHEDULE 4.09

NONE

SCHEDULE 4.10

NONE<PAGE>

                                 EXHIBIT 4.01

THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE, AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND
REGULATIONS THEREUNDER OR ANY STATE SECURITIES LAWS OR THE PROVISIONS OF THIS
WARRANT.

                      No. of Shares of Common Stock:  50,000

                                    WARRANT

                          To Purchase Common Stock of

                         NANOPIERCE TECHNOLOGIES, INC.

          THIS IS TO CERTIFY THAT Equinox Investors LLC, a Delaware limited
liability company, or its registered assigns, is entitled, at any time from the
Warrant Issuance Date (as hereinafter defined) to the Expiration Date (as
hereinafter defined), to purchase from Nanopierce Technologies, Inc., a Nevada
corporation (the "Company"), fifty thousand (50,000) shares of Common Stock (as
hereinafter defined and subject to adjustment as provided herein), in whole or
in part, including fractional parts, at a purchase price per share equal to two
dollars and seventeen cents ($2.17) (subject to any adjustments made to such
amount pursuant to Section 4 hereto) on the terms and conditions and pursuant to
the provisions hereinafter set forth.

1.   DEFINITIONS
     -----------

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

          "Additional Shares of Common Stock" shall mean all shares of Common
Stock issued by the Company after the Closing Date, other than Warrant Stock.

          "Book Value" shall mean, in respect of any share of Common Stock on
any date herein specified, the consolidated book value of the Company as of the
last day of any month immediately preceding such date, divided by the number of
Fully Diluted Outstanding shares of Common Stock as determined in accordance
with GAAP (assuming the payment of the exercise prices for such shares) by a
firm of independent certified public accountants of recognized national standing
selected by the Company and reasonably acceptable to the Holder.

          "Business Day" shall mean any day that is not a Saturday or Sunday or
a day on which banks are required or permitted to be closed in the State of New
York.

          "Closing Date" shall mean the Termination Date (as defined in the
Termination and Redemption Agreement).

          "Commission" shall mean the Securities and Exchange Commission or any
other federal agency then administering the Securities Act and other federal
securities laws.
<PAGE>

          "Common Stock" shall mean (except where the context otherwise
indicates) the Common Stock, par value $.0001 per share, of the Company as
constituted on the Closing Date, and any capital stock into which such Common
Stock may thereafter be changed, and shall also include (i) capital stock of the
Company of any other class (regardless of how denominated) issued to the holders
of shares of Common Stock upon any reclassification thereof which is also not
preferred as to dividends or assets over any other class of stock of the Company
and which is not subject to redemption and (ii) shares of common stock of any
successor or acquiring corporation received by or distributed to the holders of
Common Stock of the Company in the circumstances contemplated by Section 4.4.

          "Convertible Securities" shall mean evidences of indebtedness, shares
of stock or other securities which are convertible into or exchangeable, with or
without payment of additional consideration in cash or property, for shares of
Common Stock, either immediately or upon the occurrence of a specified date or a
specified event.

          "Current Warrant Price" shall mean, two dollars ninety one and one
half cents ($2.915) subject to any adjustments to such amount made in accordance
with Section 4 hereof.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.

          "Exercise Period" shall mean the period during which this Warrant is
exercisable pursuant to Section 2.1.

          "Expiration Date" shall mean October 20, 2003.

          "Fully Diluted Outstanding" shall mean, when used with reference to
Common Stock, at any date as of which the number of shares thereof is to be
determined, all shares of Common Stock Outstanding at such date and all shares
of Common Stock issuable in respect of this Warrant, outstanding on such date,
and other options or warrants to purchase, or securities convertible into,
including without limitation the shares of Common Stock outstanding on such date
which would be deemed outstanding in accordance with GAAP for purposes of
determining book value or net income per share.

          "GAAP" shall mean generally accepted accounting principles in the
United States of America as from time to time in effect.

          "Holder" shall mean the Person in whose name the Warrant or Warrant
Stock set forth herein is registered on the books of the Company maintained for
such purpose.

          "Market Price" per Common Share means the average of the closing bid
prices of the Common Shares as reported on the National Association of
Securities Dealers Automated Quotation System for the National Market,
("NASDAQ") or, if such security is not listed or admitted to trading on the
NASDAQ, on the principal national security exchange or quotation system on which
such security is quoted or listed or admitted to trading, or, if not quoted or
listed or admitted to trading on any national securities exchange or quotation
system, the closing bid price of such security on the over-the-counter market on
the day in question as reported by the National Association of Security Dealers,
Inc., or a similar generally accepted reporting service, as the case may be, for
the five (5) trading days immediately preceding the date of determination.

          "Other Property" shall have the meaning set forth in Section 4.4.

                                       2
<PAGE>

          "Outstanding" shall mean, when used with reference to Common Stock, at
any date as of which the number of shares thereof is to be determined, all
issued shares of Common Stock, except shares then owned or held by or for the
account of the Company or any subsidiary thereof, and shall include all shares
issuable in respect of outstanding scrip or any certificates representing
fractional interests in shares of Common Stock.

          "Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, incorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).

          "Restricted Common Stock" shall mean shares of Common Stock which are,
or which upon their issuance on the exercise of this Warrant would be, evidenced
by a certificate bearing the restrictive legend set forth in Section 9.1(a).

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

          "Securities Purchase Agreement" shall mean the Securities Purchase
Agreement dated as of January 11, 2000 by and between the Company and Equinox
Investors LLC, as it may be amended from time to time.

          "Termination and Redemption Agreement" shall mean the Termination and
Redemption Agreement dated as of a date even herewith by and between the Company
and Equinox Investors LLC, as it may be amended from time to time.

          "Transfer" shall mean any disposition of any Warrant or Warrant Stock
or of any interest in either thereof, which would constitute a sale thereof
within the meaning of the Securities Act.

          "Transfer Notice" shall have the meaning set forth in Section 9.2.

          "Warrant Issuance Date" shall mean any date on which Warrants are
issued pursuant to the Termination and Redemption Agreement.

          "Warrants" shall mean this Warrant and all warrants issued upon
transfer, division or combination of, or in substitution for, any thereof.  All
Warrants shall at all times be identical as to terms and conditions and date,
except as to the number of shares of Common Stock for which they may be
exercised.

          "Warrant Price" shall mean an amount equal to (i) the number of shares
of Common Stock being purchased upon exercise of this Warrant pursuant to
Section 2.1, multiplied by (ii) the Current Warrant Price as of the date of such
exercise.

          "Warrant Stock" shall mean the shares of Common Stock purchased by the
holders of the Warrants upon the exercise thereof.

2.   EXERCISE OF WARRANT
     -------------------

          2.1. Manner of Exercise.  From and after the Warrant Issuance Date
               ------------------
and until 5:00 P.M., New York City time, on the Expiration Date, Holder may
exercise this Warrant, on

                                       3
<PAGE>

any Business Day, for all or any part of the number of shares of Common Stock
purchasable hereunder.

          In order to exercise this Warrant, in whole or in part, Holder shall
deliver to the Company at the office or agency designated by the Company
pursuant to Section 12, (i) a written notice of Holder's election to exercise
this Warrant, which notice shall specify the number of shares of Common Stock to
be purchased, (ii) payment by cash, check or bank draft payable to the Company
of the Warrant Price in cash or by wire transfer or cashier's check drawn on a
United States bank or by the Holder's surrender of Warrant Stock (or the right
to receive such number of shares) having an aggregate Market Price equal to the
Warrant Price for all shares then being purchased and (iii) this Warrant.  Such
notice shall be substantially in the form of the subscription form appearing at
the end of this Warrant as Exhibit A, duly executed by Holder or its agent or
                           ---------
attorney.  Upon receipt of the items referred to in clauses (i), (ii) and (iii)
above, of receipt of such notice the Company shall, as promptly as practicable,
and in any event within three (3) Business Days, execute or cause to be executed
and deliver or cause to be delivered to Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as
hereinafter provided.  The stock certificate or certificates so delivered shall
be, to the extent possible, in such denomination or denominations as Holder
shall request in the notice and shall be registered in the name of Holder or,
subject to Section 9, such other name as shall be designated in the notice.
This Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and Holder or any other Person
so designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Warrant Price.  If this Warrant shall
have been exercised in part, the Company shall, at the time of delivery of the
certificate or certificates representing Warrant Stock, deliver to Holder a new
Warrant evidencing the rights of Holder to purchase the unpurchased shares of
Common Stock called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.

          The Holder shall be entitled to exercise the Warrant notwithstanding
the commencement of any case under 11 U.S.C. (S) 101 et seq. (the "Bankruptcy
                                                     -- ----
Code").  In the event the Company is a debtor under the Bankruptcy Code, the
Company hereby waives to the fullest extent permitted any rights to relief it
may have under 11 U.S.C. (S) 362 in respect of the Holder's exercise right.  The
Company hereby waives to the fullest extent permitted any rights to relief it
may have under 11 U.S.C. (S) 362 in respect of the exercise of the Warrant.  The
Company agrees, without cost or expense to the Holder, to take or consent to any
and all action necessary to effectuate relief under 11 U.S.C. (S) 362.

          2.2. Payment of Taxes and Charges.  All shares of Common Stock
               ----------------------------
issuable upon the exercise of this Warrant pursuant to the terms hereof shall be
validly issued, fully paid and nonassessable, and without any preemptive rights.
The Company shall pay all expenses in connection with, and all taxes and other
governmental charges that may be imposed with respect to, the issue or delivery
thereof.

          2.3. Fractional Shares.  The Company shall not be required to issue a
               -----------------
fractional share of Common Stock upon exercise of any Warrant.  As to any
fraction of a share which

                                       4
<PAGE>

Holder would otherwise be entitled to purchase upon such exercise, the Company
shall pay a cash adjustment in respect of such final fraction in an amount equal
to the same fraction of the Market Price per share of Common Stock on the
relevant exercise date.

          2.4. Continued Validity.  A holder of shares of Common Stock issued
               ------------------
upon the exercise of this Warrant, in whole or in part (other than a holder who
acquires such shares after the same have been publicly sold pursuant to a
Registration Statement under the Securities Act or sold pursuant to Rule 144
thereunder), shall continue to be entitled with respect to such shares to all
rights to which it would have been entitled as Holder under Sections 9, 10 and
14 of this Warrant.  The Company will, at the time of  exercise of this Warrant,
in whole or in part, upon the request of Holder, acknowledge in writing, in form
reasonably satisfactory to Holder, its continuing obligation to afford Holder
all such rights; provided, however, that if Holder shall fail to make any such
                 --------  -------
request, such failure shall not affect the continuing obligation of the Company
to afford to Holder all such rights.

          2.5. Right to Convert Warrant.  The Holder shall have the right to
               ------------------------
convert, in whole or in part, this Warrant (the "Conversion Right") at any time
prior to the expiration of the Exercise Period, into shares of Common Stock in
accordance with this Section 2.5.  Upon exercise of the Conversion Right, the
Company shall deliver to the Holder (without payment by the Holder of the
Warrant Price) that number of shares of Common Stock equal to the quotient
obtained by dividing (x) the value of the portion of this Warrant being
converted at the time the Conversion Right is exercised (determined by
subtracting the Warrant Price for the portion of this Warrant being converted
(in effect immediately prior to the exercise of the Conversion Right) from the
amount obtained by multiplying the number of shares of Common Stock issuable
upon the whole or partial exercise of this Warrant, as the case may be, by the
Market Price immediately prior to the exercise of the Conversion Right) by (y)
the Market Price of one share of Common Stock immediately prior to the exercise
of the Conversion Right.

          The Conversion Right may be exercised by the Holder, at any time or
from time to time, prior to its expiration, on any business day by delivering a
written notice (the "Conversion Notice") to the Company at the offices of the
Company, exercising the Conversion Right and specifying (i) the total number of
shares of Common Stock the Holder will purchase pursuant to the conversion and
(ii) a place and date not less than two (2) nor more than twenty (20) Business
Days from the date of the Conversion Notice for the closing of such purchase.

          At any closing under this Section 2.5, (i) the Holder will surrender
this Warrant and (ii) the Company will deliver to the Holder a certificate or
certificates for the number of shares of Common Stock issuable upon such
conversion.  If this Warrant shall have been converted only in part, the Company
shall, at the time of delivery of said stock certificate or certificates,
deliver to the Holder a new Warrant evidencing the rights of the Holder to
purchase the remaining shares of Common Stock called for by this Warrant, which
new Warrant shall in all other respects be identical to this Warrant, or, at the
request of the Holder, appropriate notation may be made on this Warrant and the
same returned to the Holder.  The Company shall pay all expenses, taxes and
other charges payable in connection with the preparation, issue and delivery of
such stock certificates and new Warrants, except that, in case such stock
certificates and/or new Warrants shall be registered in a name or names other
than the name of the Holder, funds sufficient to pay all stock transfer taxes
that are payable upon the issuance of such stock

                                       5
<PAGE>

certificates or new Warrants shall be paid by the Holder at the time of
delivering the notice of exercise mentioned above.

3.   TRANSFER, DIVISION AND COMBINATION
     ----------------------------------

          3.1. Transfer.  Subject to compliance with Sections 9, transfer of
               --------
this Warrant and all rights hereunder, in whole or in part, shall be registered
on the books of the Company to be maintained for such purpose, upon surrender of
this Warrant at the principal office of the Company referred to in Section 2.1
or the office or agency designated by the Company pursuant to Section 12,
together with a written assignment of this Warrant substantially in the form of
Exhibit B hereto duly executed by Holder or its agent or attorney.  Upon such
---------
surrender, the Company shall, subject to Section 9, execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination specified in such instrument of assignment, and shall issue to the
assignor a new Warrant evidencing the portion of this Warrant not so assigned,
and this Warrant shall promptly be cancelled.  A Warrant, if properly assigned
in compliance with Section 9, may be exercised by a new Holder for the purchase
of shares of Common Stock without having a new Warrant issued.

          3.2. Division and Combination.  Subject to Section 9, this Warrant may
               ------------------------
be divided or combined with other Warrants upon presentation hereof at the
aforesaid office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by Holder or its agent or attorney.  Subject to compliance with Section
3.1 and with Section 9, as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.

          3.3. Expenses.  The Company shall prepare, issue and deliver at its
               --------
own expense the new Warrant or Warrants under this Section 3.

          3.4. Maintenance of Books.  The Company agrees to maintain, at its
               --------------------
aforesaid office or agency, books for the registration and the registration of
transfer of the Warrants.

4.   ADJUSTMENTS
     -----------

          The number of shares of Common Stock for which this Warrant is
exercisable, or the price at which such shares may be purchased upon exercise of
this Warrant, shall be subject to adjustment from time to time as set forth in
this Section 4.  The Company shall give Holder notice of any event described
below which requires an adjustment pursuant to this Section 4 at the time of
such event.

          4.1. Stock Dividends, Subdivisions and Combinations.  If at any time
               ----------------------------------------------
the Company shall:

               (a)  take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, Additional Shares of Common Stock,

                                       6
<PAGE>

               (b)  subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or

               (c)  combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock,

then (i) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of  shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (ii) the Current Warrant Price
shall be adjusted to equal (A) the Current Warrant Price multiplied by the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment divided by (B) the number of shares for
which this Warrant is exercisable immediately after such adjustment.

          4.2. Certain Other Distributions.
               ---------------------------

               (a)  If at any time prior to the Expiration Date the Company
shall take a record of the holders of its Common Stock for the purpose of
entitling them to receive any dividend or other distribution of:

                         (i)   cash,

                         (ii)  any evidences of its indebtedness, any shares of
               its stock or any other securities or property of any nature
               whatsoever (other than cash, Convertible Securities or Additional
               Shares of Common Stock), or

                         (iii) any warrants or other rights to subscribe for or
               purchase any evidences of its indebtedness, any shares of its
               stock or any other securities or property of any nature
               whatsoever (other than cash, Convertible Securities or Additional
               Shares of Common Stock),

then Holder shall be entitled to receive such dividend or distribution as if
Holder had exercised the Warrant.  A reclassification of the Common Stock (other
than a change in par value, or from par value to no par value or from no par
value to par value) into shares of Common Stock and shares of any other class of
stock shall be deemed a distribution by the Company to the holders of its Common
Stock of such shares of such other class of stock within the meaning of this
Section 4.2 and, if the outstanding shares of Common Stock shall be changed into
a larger or smaller number of shares of Common Stock as a part of such
reclassification, such change shall be deemed a subdivision or combination, as
the case may be, of the outstanding shares of Common Stock within the meaning of
Section 4.1.

          (b)  In case the Company shall issue any Common Stock or any rights,
options or warrants to all holders of record of its Common Stock entitling all
holders to subscribe for or purchase shares of Common Stock at a price per share
less than the Market Price per share of the Common Stock on the date fixed for
such issue, the Current Warrant Price in effect

                                       7
<PAGE>

immediately prior to the close of business on the date fixed for such
determination shall be reduced to the amount determined by multiplying such
Current Warrant Price by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to the close of business
on the date fixed for such determination plus the number of shares of Common
Stock which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
Market Price and the denominator of which shall be the number of shares of
Common Stock outstanding immediately prior to the close of business on the date
fixed for such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such reduced amount to become effective
immediately after the close of business on the date fixed for such
determination. For the purposes of this clause (b), (i) the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company and (ii) in the case of any rights, options or warrants
which expire by their terms not more than 60 days after the date of issue, sale,
grant or assumption thereof, no adjustment of the Current Warrant Price shall be
made until the expiration or exercise of all rights, options or warrants,
whereupon such adjustment shall be made in the manner provided in this clause
(b), but only with respect to the shares of Common Stock actually issued
pursuant thereto. Such adjustment shall be made successively whenever any event
specified above shall occur. In the event that any or all rights, options or
warrants covered by this clause (b) are not so issued or expire or terminate
before being exercised, the Current Warrant Price then in effect shall be
appropriately readjusted.

          4.3. Other Provisions Applicable to Adjustments under this Section.
               -------------------------------------------------------------
The following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable and the
Current Warrant Price provided for in this Section 4:

               (a)  When Adjustments to Be Made.  The adjustments required by
                    ---------------------------
this Section 4 shall be made whenever and as often as any specified event
requiring an adjustment shall occur. For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of business on the
date of its occurrence.

               (b)  Fractional Interests.  In computing adjustments under this
                    --------------------
Section 4, fractional interests in Common Stock shall be taken into account to
the nearest 1/10th of a share.

               (c)  When Adjustment Not Required.  If the Company shall take a
                    ----------------------------
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend or distribution or subscription or purchase rights and shall,
thereafter and before the distribution to stockholders thereof, legally abandon
its plan to pay or deliver such dividend, distribution, subscription or purchase
rights, then thereafter no adjustment shall be required by reason of the taking
of such record and any such adjustment previously made in respect thereof shall
be rescinded and annulled.

               (d)  Challenge to Good Faith Determination.  Whenever the Board
                    -------------------------------------
of Directors of the Company shall be  required to make a determination in good
faith of the fair value of any item under this Section 4, such determination may
be challenged in good faith by

                                       8
<PAGE>

the Holder, and any dispute shall be resolved by an investment banking firm of
recognized national standing selected by the Holder and reasonably acceptable to
the Company.

          4.4. Reorganization, Reclassification, Merger, Consolidation or
               ----------------------------------------------------------
Disposition of Assets.  In case the Company shall reorganize its capital,
---------------------
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then Holder shall have the right thereafter to receive, upon
exercise of the Warrant, the number of shares of common stock of the successor
or acquiring corporation or of the Company, if it is the surviving corporation,
and Other Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event.  In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate, subject to the Holder's consent, in order to provide for
adjustments of shares of Common Stock for which this Warrant is exercisable
which shall be as nearly equivalent as practicable to the adjustments provided
for in this Section 4.  For purposes of this Section 4.4, "common stock of the
successor or acquiring corporation" shall include stock of such corporation of
any class which is not preferred as to dividends or assets over any other class
of stock of such corporation and which is not subject to redemption and shall
also include any evidences of indebtedness, shares of stock or other securities
which are convertible into or exchangeable for any such stock, either
immediately or upon the arrival of a specified date or the happening of a
specified event and any warrants or other rights to subscribe for or purchase
any such stock.  The foregoing provisions of this Section 4.4 shall similarly
apply to successive reorganizations, reclassifications, mergers, consolidations
or disposition of assets.

          4.5. Other Action Affecting Common Stock.  In case at any time or
               -----------------------------------
from time to time the Company shall take any action in respect of its Common
Stock, other than any action taken in the ordinary course of the Company's
business or any action described in this Section 4, which would have a material
adverse effect upon the rights of the Holder, the number of shares of Common
Stock and/or the purchase price thereof shall be adjusted in such manner as may
be equitable in the circumstances, as determined in good faith by an investment
bank selected by Holder.

          4.6. Certain Limitations.  Notwithstanding anything herein to the
               -------------------
contrary, the Company agrees not to enter into any transaction which, by reason
of any adjustment hereunder, would cause the Current Warrant Price to be less
than the par value per share of Common Stock.

                                       9
<PAGE>

          4.7. No Voting Rights.  This Warrant shall not entitle its Holder to
               ----------------
any voting rights or other rights as a shareholder of the Company.

5.   NOTICES TO HOLDER
     -----------------

          5.1. Notice of Adjustments.  Whenever the number of shares of Common
               ---------------------
Stock for which this Warrant is exercisable, or whenever the price at which a
share of such Common Stock may be purchased upon exercise of the Warrants, shall
be adjusted pursuant to Section 4, the Company shall forthwith prepare a
certificate to be executed by an executive officer of the Company setting forth,
in reasonable detail, the event requiring the adjustment and the method by which
such adjustment was calculated, specifying the number of shares of Common Stock
for which this Warrant is exercisable and (if such adjustment was made pursuant
to Section 4.4 or 4.5) describing the number and kind of any other shares of
stock or Other Property for which this Warrant is exercisable, and any change in
the purchase price or prices thereof, after giving effect to such adjustment or
change.  The Company shall promptly cause a signed copy of such certificate to
be delivered to the Holder in accordance with Section 14.2.  The Company shall
keep at its office or agency designated pursuant to Section 12 copies of all
such certificates and cause the same to be available for inspection at said
office during normal business hours by the Holder, its representatives, or any
prospective purchaser of a Warrant designated by the Holder.

          5.2. Notice of Corporate Action.  If at any time
               --------------------------

               (a)  the Company shall take a record of the holders of its Common
Stock for the purpose of entitling them to receive a dividend or other
distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property, or to receive any other right, or

               (b)  there shall be any capital reorganization of the Company,
any reclassification or recapitalization of the capital stock of the Company or
any consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation, or

               (c)  there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder (i) at
least thirty (30) Business Days' prior written notice of the date on which a
record date shall be selected for such dividend, distribution or right or for
determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least thirty (30)
Business Days' prior written notice of the date when the same shall take place.
Such notice in accordance with the foregoing clause also shall specify (i) the
date on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,

                                       10
<PAGE>

reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 14.2.

6.   NO IMPAIRMENT
     -------------

          The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
against impairment.  Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (b) take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant, and (c) use its best efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant.

          Upon the request of Holder, the Company will at any time during the
period this Warrant is outstanding acknowledge in writing, in form reasonably
satisfactory to Holder, the continuing validity of this Warrant and the
obligations of the Company hereunder.

7.   RESERVATION AND AUTHORIZATION OF COMMON STOCK
     ---------------------------------------------

          From and after the Closing Date, the Company shall at all times
reserve and keep available for issue upon the exercise of Warrants such number
of its authorized but unissued shares of Common Stock as will be sufficient to
permit the exercise in full of all outstanding Warrants.  All shares of Common
Stock which shall be so issuable, when issued upon exercise of any Warrant and
payment therefor in accordance with the terms of such Warrant, shall be duly and
validly issued and fully paid and nonassessable, and not subject to preemptive
rights.

          Before taking any action which would cause an adjustment reducing the
Current Warrant Price below the then par value, if any, of the shares of Common
Stock issuable upon exercise of the Warrants, the Company shall take any
corporate action which may be necessary in order that the Company may validly
and legally issue fully paid and non-assessable shares of such Common Stock at
such adjusted Current Warrant Price.

                                       11
<PAGE>

          Before taking any action which would result in an adjustment in the
number of shares of Common Stock for which this Warrant is exercisable or in the
Current Warrant Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

8.   TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS
     --------------------------------------------------

          In the case of all dividends or other distributions by the Company to
the holders of its Common Stock with respect to which any provision of Section 4
refers to the taking of a record of such holders, the Company will in each such
case take such a record as of the close of business on a Business Day.  The
Company will not at any time close its stock transfer books or Warrant transfer
books so as to result in preventing or delaying the exercise or transfer of any
Warrant.

9.   RESTRICTIONS ON TRANSFERABILITY
     -------------------------------

          The Warrants and the Warrant Stock shall not be transferred,
hypothecated or assigned before satisfaction of the conditions specified in this
Section 9, which conditions are intended to ensure compliance with the
provisions of the Securities Act with respect to the Transfer of any Warrant or
any Warrant Stock.  Holder, by acceptance of this Warrant, agrees to be bound by
the provisions of this Section 9.

          9.1. Restrictive Legend.  The Holder by accepting this Warrant and any
               ------------------
Warrant Stock agrees that this Warrant and the Warrant Stock issuable upon
exercise hereof may not be assigned or otherwise transferred unless and until
(i) the Company has received an opinion of counsel for the Holder that such
securities may be sold pursuant to an exemption from registration under the
Securities Act or (ii) a registration statement relating to such securities has
been filed by the Company and declared effective by the Commission.

               (a)  Each certificate for Warrant Stock issuable hereunder shall
     bear a legend substantially worded as follows unless such securities have
     been sold pursuant to an effective registration statement under the
     Securities Act:

                    "The securities represented by this certificate have not
          been registered under the Securities Act of 1933, as amended (the
          "Act") or any state securities laws. The securities may not be offered
          for sale, sold, assigned, offered, transferred or otherwise
          distributed for value except (i) pursuant to an effective registration
          statement under the Act or any state securities laws or (ii) pursuant
          to an exemption from registration or prospectus delivery requirements
          under the Act or any state securities laws in respect of which the
          Company has received an opinion of counsel satisfactory to the Company
          to such effect. Copies of the agreement covering both the purchase of
          the securities and restricting their transfer may be obtained at no
          cost by written request made by the holder

                                       12
<PAGE>

          of record of this certificate to the Secretary of the Company at the
          principal executive offices of the Company."

               (b)  Except as otherwise provided in this Section 9, the Warrant
     shall be stamped or otherwise imprinted with a legend in substantially the
     following form:

                         "This Warrant and the securities represented hereby
          have not been registered under the Securities Act of 1933, as amended,
          or any state securities laws and may not be transferred in violation
          of such Act, the rules and regulations thereunder or any state
          securities laws or the provisions of this Warrant."

          9.2. Notice of Proposed Transfers.  Prior to any Transfer or attempted
               -----------------------------
Transfer of any Warrants or any shares of Restricted Common Stock, the Holder
shall give five (5) days' prior written notice (a "Transfer Notice") to the
Company of Holder's intention to effect such Transfer, describing the manner and
circumstances of the proposed Transfer, and obtain from counsel to Holder an
opinion that the proposed Transfer of such Warrants or such Restricted Common
Stock may be effected without registration under the Securities Act or state
securities laws. After the Company's receipt of the Transfer Notice and opinion,
such Holder shall thereupon be entitled to Transfer such Warrants or such
Restricted Common Stock, in accordance with the terms of the Transfer Notice.
Each certificate, if any, evidencing such shares of Restricted Common Stock
issued upon such Transfer and the Warrant issued upon such Transfer shall bear
the restrictive legends set forth in Section 9.1, unless in the opinion of such
counsel such legend is not required in order to ensure compliance with the
Securities Act.

          9.3. Required Registration.  Pursuant to the terms and conditions set
               ----------------------
forth in the Termination and Redemption Agreement, the Company shall prepare and
file with the Commission not later than the forty-fifth (45/th/) day after the
Closing Date, an amendment to the Registration Statement relating to the offer
and sale of the Common Stock issuable upon conversion or exercise of the
Debentures (as defined in the Securities Purchase Agreement) to include in such
Registration Statement the Common Stock issuable upon exercise of this Warrant
and shall use its best efforts to cause the Commission to declare effective and
maintain such amended Registration Statement effective in accordance with the
terms set forth in Section 3 of the Termination and Redemption Agreement.

          9.4. Termination of Restrictions.  Notwithstanding the foregoing
               ---------------------------
provisions of Section 9, the restrictions imposed by this Section upon the
transferability of the Warrants, the Warrant Stock and the Restricted Common
Stock (or Common Stock issuable upon the exercise of the Warrants) and the
legend requirements of Section 9.1 shall terminate as to any particular Warrant
or share of Warrant Stock or Restricted Common Stock (or Common Stock issuable
upon the exercise of the Warrants) (i) when and so long as such security shall
have been effectively registered under the Securities Act and applicable state
securities laws and disposed of pursuant thereto or (ii) when the Company shall
have received an opinion of counsel that such shares may be transferred without
registration thereof under the Securities Act and applicable state securities
laws.  Whenever the restrictions imposed by Section 9 shall terminate as to this

                                       13
<PAGE>

Warrant, as hereinabove provided, the Holder hereof shall be entitled to receive
from the Company upon written request of the Holder, at the expense of the
Company, a new Warrant bearing the following legend in place of the restrictive
legend set forth hereon:

                    "THE RESTRICTIONS ON TRANSFERABILITY OF THE
          WITHIN WARRANT CONTAINED IN SECTION 9 HEREOF TERMINATED
          ON ________, 20__, AND ARE OF NO FURTHER FORCE AND
          EFFECT."

All Warrants issued upon registration of transfer, division or combination of,
or in substitution for, any Warrant or Warrants entitled to bear such legend
shall have a similar legend endorsed thereon.  Whenever the restrictions imposed
by this Section shall terminate as to any share of Restricted Common Stock, as
hereinabove provided, the holder thereof shall be entitled to receive from the
Company, at the Company's expense, a new certificate representing such Common
Stock not bearing the restrictive legends set forth in Section 9.1.

          9.5. Listing on Securities Exchange.  If the Company shall list any
               ------------------------------
shares of Common Stock on any securities exchange, it will, at its expense, list
thereon, maintain and, when necessary, increase such listing of, all shares of
Common Stock issued or, to the extent permissible under the applicable
securities exchange rules, issuable upon the exercise of this Warrant so long as
any shares of Common Stock shall be so listed during the Exercise Period.

10.  SUPPLYING INFORMATION
     ---------------------

          The Company shall cooperate with Holder in supplying such information
as may be reasonably necessary for Holder to complete and file any information
reporting forms presently or hereafter required by the Commission as a condition
to the availability of an exemption from the Securities Act for the sale of any
Warrant or Restricted Common Stock.

11.  LOSS OR MUTILATION
     ------------------

          Upon receipt by the Company from Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and indemnity reasonably satisfactory to it (it being
understood that the written agreement of the Holder shall be sufficient
indemnity), and in case of mutilation upon surrender and cancellation hereof,
the Company will execute and deliver in lieu hereof a new Warrant of like tenor
to Holder; provided, in the case of mutilation, no indemnity shall be required
           --------
if this Warrant in identifiable form is surrendered to the Company for
cancellation.

12.  OFFICE OF THE COMPANY
     ---------------------

          As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency (which may be the principal executive offices of
the Company) where the Warrants may be presented for exercise, registration of
transfer, division or combination as provided in this Warrant, such office to be
initially located at 370 Seventeenth Street, Suite #3290, Denver, Colorado
80202, fax (303) 592-1010, provided, however, that the Company

                                       14
<PAGE>

shall provide prior written notice to Holder of a change in address no less than
thirty (30) days prior to such change.

13.  LIMITATION OF LIABILITY
     -----------------------

          No provision hereof, in the absence of affirmative action by Holder to
purchase shares of Common Stock, and no enumeration herein of the rights or
privileges of Holder hereof, shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.

14.  MISCELLANEOUS
     -------------

          14.1. Nonwaiver and Expenses.  No course of dealing or any delay or
                ----------------------
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Expiration Date.  If the
Company fails to make, when due, any payments provided for hereunder, or fails
to comply with any other provision of this Warrant, the Company shall pay to
Holder such amounts as shall be sufficient to cover any direct and indirect
losses, damages, costs and expenses including, but not limited to, reasonable
attorneys' fees, including those of appellate proceedings, incurred by Holder in
collecting any amounts due pursuant hereto or in otherwise enforcing any of its
rights, powers or remedies hereunder.

          14.2. Notice Generally.  Except as may be otherwise provided herein,
                ----------------
any notice or other communication or delivery required or permitted hereunder
shall be in writing and shall be delivered personally or sent by certified mail,
postage prepaid, or by a nationally recognized overnight courier service, and
shall be deemed given when so delivered personally or by overnight courier
service, or, if mailed, three (3) days after the date of deposit in the United
States mails, as follows:

                (1)  if to the Company, to:

                     Nanopierce Technologies, Inc.
                     370 Seventeenth Street, Suite #3580
                     Denver, Colorado 80202
                     Attention:  Paul H. Metzinger, President
                     Tel:  (303) 592-1010
                     Fax:  (303) 592-1054

with a copy to:      Kutak Rock LLP
                     717 Seventeenth Street, Suite #2900
                     Denver, Colorado 80202
                     Attention:  Robert Ahrenholz, Esq.
                     Tel: (303) 297-2400
                     Fax: (303) 292-7799

                                       15
<PAGE>

                (2)  if to the Purchaser to:

                     Equinox Investors LLC
                     WEC Asset Management LLC
                     110 Colabaugh Pond Road
                     Croton-on-Hudson, New York 10520
                     Attention:  Daniel J. Saks
                     Tel: (914) 271-2211
                     Fax: (914) 271-0889
with a copy to:
                     Pryor Cashman Sherman & Flynn LLP
                     410 Park Avenue
                     New York, New York 10022
                     Attention:  Mark Saks, Esq.
                     Tel: (212) 326-0140
                     Fax: (212) 326-0806

     The Company or the Holder may change the foregoing address by notice given
pursuant to this Section 14.2.

          14.3. Indemnification.  The Company agrees to indemnify and hold
                ---------------
harmless Holder from and against any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses
and disbursements of any kind which may be imposed upon, incurred by or asserted
against Holder in any manner relating to or arising out of any failure by the
Company to perform or observe in any respect any of its covenants, agreements,
undertakings or obligations set forth in this Warrant.

          14.4. Remedies.  Holder in addition to being entitled to exercise all
                --------
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant.  The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.

          14.5. Successors and Assigns.  Subject to the provisions of Sections
                ----------------------
3.1 and 9, this Warrant and the rights evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and assigns of Holder.  The provisions of this Warrant are intended to be for
the benefit of all Holders from time to time of this Warrant and, with respect
to Section 9 hereof, holders of Warrant Stock, and shall be enforceable by any
such Holder or holder of Warrant Stock.

          14.6. Amendment.  This Warrant and all other Warrants may be modified
                ---------
or amended or the provisions hereof waived only with the prior written consent
of the Company and the Holder.

          14.7. Severability.  Wherever possible, each provision of this
                ------------
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision

                                       16
<PAGE>

of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Warrant.

          14.8. Headings.  The headings used in this Warrant are for the
                ---------
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

          14.9. Governing Law.  This Warrant shall be governed by the laws of
                -------------
the State of New York, without regard to the provisions thereof relating to
conflict of laws. The Company consents to the jurisdiction of the federal courts
whose districts encompass any part of the City of New York or the state courts
of the State of New York sitting in the City of New York in connection with any
dispute arising under this Warrant or any of the transactions contemplated
hereby, and hereby waives, to the maximum extent permitted by law, any
objection, including any objections based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions.

    [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK, SIGNATURE PAGE TO FOLLOW.]

                                       17
<PAGE>

          IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed and its corporate seal to be impressed hereon and attested by its
Secretary or an Assistant Secretary.

Dated:  October __, 2000

                                          NANOPIERCE TECHNOLOGIES, INC.

                                          By:___________________________
                                             Name:  Paul H. Metzinger
                                             Title: President

Attest:

By:______________________
   Name:  Kristi J. Kampmann
   Title: Secretary

<PAGE>

                                   EXHIBIT A

                               SUBSCRIPTION FORM

                 [To be executed only upon exercise of Warrant]

The undersigned registered owner of this Warrant irrevocably exercises this
Warrant for the purchase of ______ Shares of Common Stock of Nanopierce
Technologies, Inc., and herewith makes payment therefor in cash or by check or
bank draft made payable to the Company, all at the price and on the terms and
conditions specified in this Warrant and requests that certificates for the
shares of Common Stock hereby purchased (and any securities or other property
issuable upon such exercise) be issued in the name of and delivered to
_____________ whose address is _________________ and, if such shares of Common
Stock shall not include all of the shares of Common Stock issuable as provided
in this Warrant, that a new Warrant of like tenor and date for the balance of
the shares of Common Stock issuable hereunder be delivered to the undersigned.

                                             _______________________________
                                             (Name of Registered Owner)

                                             _______________________________
                                             (Signature of Registered Owner)

                                             _______________________________
                                             (Street Address)

                                             _______________________________
                                             (City)     (State)  (Zip Code)

          NOTICE:  The signature on this subscription must correspond with the
name as written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
<PAGE>

                                   EXHIBIT B

                                ASSIGNMENT FORM

          FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under this Warrant, with respect to the number of
shares of Common Stock set forth below:

            Name and Address of Assignee     No. of Shares of
            ----------------------------     ----------------
                                             Common Stock
                                             ------------

and does hereby irrevocably constitute and appoint _______ ________________
attorney-in-fact to register such transfer on the books of Nanopierce
Technologies, Inc., maintained for the purpose, with full power of substitution
in the premises.

            Dated:__________________      Print Name:___________________

                                          Signature:____________________

                                          Witness:______________________

          NOTICE:  The signature on this assignment must correspond with the
name as written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.

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