Document:

Exhibit 10.24

THE  SECURITIES  EVIDENCED BY THIS WARRANT  HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR APPLICABLE  STATE  SECURITIES LAWS, AND NO
INTEREST  MAY BE SOLD,  DISTRIBUTED,  ASSIGNED,  OFFERED,  PLEDGED OR  OTHERWISE
TRANSFERRED UNLESS (A) THERE IS AN EFFECTIVE  REGISTRATION  STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION INVOLVING
SAID  SECURITIES,  (B) THE COMPANY  RECEIVES AN OPINION OF LEGAL COUNSEL FOR THE
HOLDER  OF  THE  SECURITIES  SATISFACTORY  TO  THE  COMPANY  STATING  THAT  SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION,  OR (C) THE COMPANY OTHERWISE SATISFIES
ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.

ISSUED: October 20, 2000                                     WARRANT TO PURCHASE
Void After October 19, 2005                                  COMMON STOCK

                             EBIZ ENTERPRISES, INC.

                                     WARRANT

     THIS IS TO CERTIFY that, for good and valuable consideration and subject to
these terms and conditions,  THE CANOPY GROUP,  INC. or such person to whom this
Warrant is transferred  (the "HOLDER"),  is entitled to exercise this Warrant to
purchase 500,000 fully paid and nonassessable shares of EBIZ ENTERPRISES,  INC.,
a Nevada  corporation (the  "COMPANY"),  Common Stock (the "WARRANT STOCK") at a
price per share of $1.10 (the "EXERCISE PRICE") (such number of shares,  type of
security and the Exercise Price being subject to adjustment as provided below).

     1. METHOD OF EXERCISE

     This Warrant may be exercised by the Holder,  at any time after October 19,
2002, but not later than October 19, 2005 (the "EXERCISE  PERIOD"),  in whole or
in part,  by delivering to the Company at Ebiz  Enterprises,  Inc.,  15695 North
83rd  Way,  Scottsdale,  Arizona  85260 (or such  other  office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company) (a) this Warrant  certificate,
(b) a  certified  or  cashier's  check  payable  to  the  Company,  or  canceled
indebtedness  of the Company to the Holder,  in the amount of the Exercise Price
multiplied  by the number of shares for which  this  Warrant is being  exercised
(the  "PURCHASE  PRICE"),  and (c) the Notice of Exercise  attached as EXHIBIT A
duly completed and executed by the Holder. This Warrant may also be exercised by
the Holder at any time after the date  issued,  but not later than  October  19,
2005,  in whole or in part,  by delivery as  specified  above,  provided (a) the
closing bid price of the Common Stock as reported by the OTC Bulletin  Board (or
NASDAQ,  if applicable) on the trading day prior to the day on which the Warrant
is exercised is equal to or greater than $4.00 or (b) the  occurrence of (i) any
merger,  consolidation or corporate  reorganization  of the Company with or into
any  corporation  or entity and the Company is not the surviving  entity of such
merger,  consolidation  or  reorganization  (ii) any  transaction  or  series of
related  transactions by the Company in which more than 50% of the voting equity
of the Company is transferred or (iii) a sale of all or substantially all of the
assets of the Company.
<PAGE>
     2. DELIVERY OF STOCK CERTIFICATES; NO FRACTIONAL SHARES

     2.1 DELIVERY OF STOCK CERTIFICATES. Within 10 days after the payment of the
Purchase Price following the exercise of this Warrant (in whole or in part), the
Company at its expense  shall issue in the name of and deliver to the Holder (a)
a certificate  or  certificates  for the number of fully paid and  nonassessable
Warrant Shares to which the Holder shall be entitled upon such exercise, and (b)
a new  Warrant in  substantially  the same form to purchase up to that number of
Warrant Shares,  if any, as to which this Warrant has not been exercised if this
Warrant has not  expired.  The Holder  shall for all  purposes be deemed to have
become the holder of record of such Warrant  Shares on the date this Warrant was
exercised  (the date the  Holder has fully  complied  with the  requirements  of
Section  1),  irrespective  of  the  date  of  delivery  of the  certificate  or
certificates  representing  the Warrant Shares;  PROVIDED that, if the date such
exercise  is made is a date when the stock  transfer  books of the  Company  are
closed,  such person shall be deemed to have become the holder of record of such
Warrant Shares at the close of business on the next succeeding date on which the
stock transfer books are open.

     2.2 NO FRACTIONAL  SHARES.  No  fractional  shares shall be issued upon the
exercise of this Warrant.  In lieu of fractional  shares,  the Company shall pay
the Holder a sum in cash equal to the fair market value of the fractional shares
(as determined by the Company's Board of Directors) on the date of exercise.

     3. COVENANTS AS TO WARRANT SHARES

     The Company  covenants  that at all times during the Exercise  Period there
shall be reserved for issuance and delivery  upon  exercise of this Warrant such
number of Warrant  Shares as is  necessary  for exercise in full of this Warrant
and, from time to time,  it will take all steps  necessary to amend the Articles
of Incorporation to provide sufficient reserves of Warrant Shares.

     4. ADJUSTMENTS; TERMINATION OF WARRANT UPON CERTAIN EVENTS

     4.1 EFFECT OF REORGANIZATION.

          (a) REORGANIZATION - NO CHANGE IN CONTROL

     Upon a merger,  consolidation,  acquisition of all or substantially  all of
the  property  or stock,  liquidation  or other  reorganization  of the  Company
(collectively,  a  "REORGANIZATION")  during the Exercise Period, as a result of
which the  shareholders of the Company receive cash,  stock or other property in
exchange for their Warrant Shares and the holders of the Company's voting equity
securities  immediately  prior to such  Reorganization  together  own a majority
interest of the voting equity securities of the successor  corporation following
such  Reorganization,  lawful  provision  shall be made so that the Holder shall
thereafter be entitled to receive,  upon exercise of this Warrant, the number of
shares  of  securities  of  the  successor   corporation   resulting  from  such
Reorganization  (and cash and other property),  to which a holder of the Warrant

                                       2
<PAGE>
Shares  issuable  upon exercise of this Warrant would have been entitled in such
Reorganization  if this  Warrant had been  exercised  immediately  prior to such
Reorganization.  In any such case, appropriate adjustment (as determined in good
faith by the Company's  Board of Directors)  shall be made in the application of
the  provisions  of this  Warrant with respect to the rights and interest of the
Holder after the  Reorganization  to the end that the provisions of this Warrant
(including  adjustments  of the  Exercise  Price  and  the  number  and  type of
securities  purchasable  pursuant  to  the  terms  of  this  Warrant)  shall  be
applicable  after that event,  as near as reasonably  may be, in relation to any
shares deliverable after that event upon the exercise of this Warrant.

          (b) REORGANIZATION - CHANGE IN CONTROL; TERMINATION OF WARRANT

     Upon  Reorganization  during the Exercise Period,  as a result of which the
shareholders  of the Company  receive cash,  stock or other property in exchange
for  their  Warrant  Shares  and the  holders  of the  Company's  voting  equity
securities  immediately  prior to such  Reorganization  together own less than a
majority interest of the voting equity  securities of the successor  corporation
following such Reorganization, the Holder shall be given notice of such proposed
action as  provided  in Section  7. The  Holder  may  attend the  meeting of the
Company's shareholders at which such action is considered and voted upon. If the
proposed action is approved  according to applicable law by the  shareholders of
all corporations or other entities that are parties to the proposed action,  the
Holder shall be so notified in writing by the Company by registered or certified
mail at least 10 days before its  effectiveness.  Notwithstanding  the period of
exercisability  stated on the face of this  Warrant,  this Warrant  shall become
forever  null and void to the  extent  not  exercised  on or before  5:00  p.m.,
Pacific time, on the seventh day following the delivery of such notice; provided
that if the Reorganization  does not close, this Warrant shall not terminate and
the Exercise Period shall continue as stated in this Warrant.

     4.2 ADJUSTMENTS FOR STOCK SPLITS, DIVIDENDS.

     If the Company shall subdivide the number of outstanding shares of the same
class as the Warrant Shares into a greater  number of shares,  then the Exercise
Price in effect before such  dividend or  subdivision  shall be  proportionately
reduced and the number of Warrant  Shares at that time issuable  pursuant to the
exercise of this Warrant shall be proportionately increased; and, conversely, if
the Company shall contract the number of outstanding shares of the same class as
the Warrant  Shares by  combining  such shares into a smaller  number of shares,
then  the  Exercise   Price  in  effect   before  such   combination   shall  be
proportionately  increased and the number  Warrant  Shares at that time issuable
pursuant to the exercise or conversion of this Warrant shall be  proportionately
decreased.  Each adjustment in the number of Warrant Shares issuable shall be to
the nearest whole share.

     4.3 CERTIFICATE AS TO ADJUSTMENTS.

     In the case of any  adjustment in the Exercise  Price or number and type of
securities  issuable upon  exercise of this  Warrant,  the Company will promptly
give written  notice to the Holder in the form of a  certificate,  certified and
confirmed  by an  officer  of the  Company,  setting  forth  the  adjustment  in
reasonable detail.

                                        3
<PAGE>
     5. SECURITIES LAWS RESTRICTIONS; LEGEND ON WARRANT SHARES

     5.1 SECURITIES LAWS RESTRICTIONS.  This Warrant and the securities issuable
upon  exercise have not been  registered  under the  Securities  Act of 1933, as
amended,  or  applicable  state  securities  laws,  and no interest may be sold,
distributed,  assigned,  offered,  pledged or otherwise  transferred  unless (a)
there is an effective registration statement under such Act and applicable state
securities laws covering any such transaction involving said securities, (b) the
Company  receives an opinion of legal  counsel for the holder of the  securities
satisfactory  to the  Company  stating  that such  transaction  is  exempt  from
registration,   or  (c)  the  Company  otherwise   satisfies  itself  that  such
transaction is exempt from registration.

     5.2 LEGEND.  A legend setting forth or referring to the above  restrictions
shall  be  placed  on  this  Warrant,   any   replacement  and  any  certificate
representing  the Warrant  Shares,  and a stop transfer order shall be placed on
the books of the Company and with any transfer  agent until such  securities may
be legally sold or otherwise transferred.

     6. EXCHANGE OF WARRANT; LOST OR DAMAGED WARRANT CERTIFICATE

     This Warrant is exchangeable upon its surrender by the Holder at the office
of the  Company.  Upon  receipt by the Company of  satisfactory  evidence of the
loss,  theft,  destruction  or damage of this Warrant and either (in the case of
loss,  theft  or  destruction)  reasonable  indemnification  or (in the  case of
damage) the surrender of this Warrant for cancellation, the Company will execute
and deliver to the Holder,  without charge, but with adequate  indemnity,  a new
Warrant of like denomination.

     7. NOTICES OF RECORD DATE, ETC.

     In the event of:

          (a) any taking by the  Company  of a record of the  holders of Warrant
Shares for the purpose of  determining  the holders who are  entitled to receive
any dividend or other  distribution,  or any right to subscribe for, purchase or
otherwise  acquire any shares of stock of any class or any other  securities  or
property, or to receive any other right;

          (b)  any  reorganization  of  the  Company,  any  reclassification  or
recapitalization of the capital structure of the Company, or any transfer of all
or  substantially  all the assets of the Company to, or  consolidation or merger
of, the Company with or into any person;

          (c)  any  voluntary  or   involuntary   dissolution,   liquidation  or
winding-up of the Company;

          (d) any  proposed  issue or grant by the  Company  to the  holders  of
Warrant Shares of any shares of any class or any other securities,  or any right
or warrant to  subscribe  for,  purchase or  otherwise  acquire any units of any
class or any other securities;

          (e) the initial public offering of the Company's shares; or

                                        4
<PAGE>
          (f) any other event as to which the Company is required to give notice
to any holders of Warrant Shares,

then  and in each  such  event  the  Company  will  mail to the  Holder a notice
specifying  (i) the date on which any such record is to be taken,  (ii) the date
on which any such reorganization, reclassification,  recapitalization, transfer,
consolidation,  merger, dissolution, liquidation or winding-up is to take place,
and the  time,  if any is to be  fixed,  as to which  the  holders  of record of
Warrant Shares or securities into which the Warrant Shares are convertible shall
be  entitled  to  exchange   their  shares  for  securities  or  other  property
deliverable   on  such   reorganization,   reclassification,   recapitalization,
transfer, consolidation,  merger, dissolution,  liquidation or winding-up, (iii)
the  amount  and  character  of any  stock or other  securities,  or  rights  or
warrants,  proposed to be issued or granted,  the date of such proposed issue or
grant and the persons or class of persons to whom such  proposed  issue or grant
is to be offered or made, and (iv) in reasonable  detail,  the facts,  including
the  proposed  date,  concerning  any other such  event.  Such  notice  shall be
delivered  to the  Holder at least 20 days  prior to the date  specified  in the
notice.

     8. INVESTMENT INTENT

     By accepting this Warrant,  the Holder represents that it is acquiring this
Warrant for investment  and not with a view to, or for sale in connection  with,
any distribution thereof.

     9. MISCELLANEOUS

     9.1 HOLDER AS OWNER.

     The Company may deem and treat the holder of record of this  Warrant as the
absolute owner for all purposes regardless of any notice to the contrary.

     9.2 NO SHAREHOLDER RIGHTS.

     This Warrant shall not entitle the Holder to any voting rights or any other
rights as a shareholder  of the Company or to any other rights except the rights
stated  herein;  and no dividend or interest shall be payable or shall accrue in
respect of this Warrant or the Warrant Shares, until this Warrant is exercised.

     9.3 NOTICES.

     Unless otherwise provided,  any notice under this Warrant shall be given in
writing and shall be deemed  effectively given (a) upon personal delivery to the
party to be notified, (b) upon confirmation of receipt by fax by the party to be
notified, (c) one business day after deposit with a reputable overnight courier,
prepaid for  overnight  delivery and addressed as set forth in (d), or (d) three
days  after  deposit  with the  United  States  Post  Office,  postage  prepaid,
registered or certified with return receipt requested and addressed to the party
to be notified at the address  indicated below, or at such other address as such
party may designate by 10 days' advance  written notice to the other party given
in the foregoing manner.

                                        5
<PAGE>
     If to the Holder:   To the address last furnished
                         in writing to the Company by
                         the Holder

     If to the Company:  Ebiz Enterprises, Inc.
                         15695 North 83rd Way
                         Scottsdale, Arizona 85260
                         Attn: President
                         Fax: (480) 778-1001

     9.4 AMENDMENTS AND WAIVERS.

     Any term of this Warrant may be amended and the  observance of any term may
be waived (either generally or in a particular instance and either retroactively
or  prospectively)  only with the written consent of the Company and the holders
of  Warrants to purchase a majority of the  Warrant  Shares.  Any  amendment  or
waiver  effected in  accordance  with this  Section 9.4 shall be binding on each
future Holder and the Company.

     9.5 GOVERNING LAW; JURISDICTION; VENUE.

     This Warrant shall be governed by and construed under the laws of the state
of Utah without regard to principles of conflict of laws.

     9.6 SUCCESSORS AND ASSIGNS; TRANSFER.

     The terms and  conditions of this Warrant shall inure to the benefit of and
be binding on the respective successors and assigns of the parties. This Warrant
may not be  transferred  or assigned  without the consent of the Company,  which
shall not be unreasonably withheld.

     IN WITNESS  WHEREOF,  the Company has executed  this Warrant as of the date
first written above.

                                        EBIZ ENTERPRISES, INC.

                                        By: /s/ Stephen C. Herman
                                            ------------------------------------
                                            Name: Stephen C. Herman
                                            Title: Chief Operations Officer

                                        6
<PAGE>
                                    EXHIBIT A

                               NOTICE OF EXERCISE

To: Ebiz Enterprises, Inc.

     The undersigned hereby irrevocably elects to purchase ___________ shares of
Common  Stock of Ebiz  Enterprises,  Inc.  (the  "COMPANY"),  issuable  upon the
exercise of the attached Warrant and requests that  certificates for such shares
be issued in the name of and delivered to the address of the undersigned  stated
below and,  if said  number of shares  shall not be all the  shares  that may be
purchased  pursuant to the attached Warrant,  that a new Warrant  evidencing the
right to purchase the balance of such shares be  registered  in the name of, and
delivered  to, the  undersigned  at the address  stated below.  The  undersigned
agrees with and  represents to the Company that said shares are acquired for the
account of the undersigned for investment and not with a view to, or for sale in
connection  with, any  distribution or public offering within the meaning of the
Securities Act of 1933, as amended.

     Payment enclosed in the amount of $___________.

     Dated: ________________

     Name of Holder of Warrant: ________________________________________________
                                                (Please print)

     Address: __________________________________________________________________

     Signature: ________________________________________________________________
<PAGE>
                                   ASSIGNMENT

     For value  received the  undersigned  sells,  assigns and  transfers to the
transferee named below the attached Warrant,  together with all right, title and
interest, and does irrevocably constitute and appoint the transfer agent of Ebiz
Enterprises,  Inc. (the "COMPANY") as the  undersigned's  attorney,  to transfer
said Warrant on the books of the Company, with full power of substitution in the
premises.

     Dated: __________________________

     Name of Holder of Warrant: ________________________________________________
                                                (Please print)

     Address: __________________________________________________________________

     Signature: ________________________________________________________________

     Name of transferee: _______________________________________________________
                                               (Please print)

     Address of transferee: ____________________________________________________Exhibit 10.25

                             EBIZ ENTERPRISES, INC.

                           INVESTORS' RIGHTS AGREEMENT

     THIS INVESTOR'S  RIGHTS AGREEMENT (this  "AGREEMENT") is made as of October
20, 2000,  by and between EBIZ  ENTERPRISES,  Inc.,  a Nevada  corporation  (the
"COMPANY"), and THE CANOPY GROUP, INC., a Utah corporation ("INVESTOR").

                                    RECITALS

     A. The Company,  Investor and JEM Ventures  EBIZ,  LLC ("JEM") have entered
into a Stock and Warrant Purchase  Agreement (the "PURCHASE  AGREEMENT") of even
date  herewith  pursuant  to which (i) JEM has  agreed to sell to  Investor  and
Investor has agreed to purchase  from JEM shares of the  Company's  Common Stock
and (ii) the Company has agreed to issue to Investor  and Investor has agreed to
purchase from the Company  warrants to purchase  shares of the Company's  Common
Stock (the "WARRANTS").

     B. A condition to Investor's  obligations  under the Purchase  Agreement is
that the  Company and  Investor  enter into this  Agreement  in order to provide
Investor  with (i) certain  rights to register  shares of the  Company's  Common
Stock to be issued to Investor  upon  exercise  of the  Warrants,  (ii)  certain
rights to receive or inspect information  pertaining to the Company, and (iii) a
right of first  refusal with respect to certain  issuances by the Company of its
securities.  The Company desires to induce Investor to purchase shares of Common
Stock and the  Warrants  pursuant to the  Purchase  Agreement by agreeing to the
terms and conditions set forth herein.

                                    AGREEMENT

     The parties hereby agree as follows:

     1.  REGISTRATION  RIGHTS.  The Company and  Investor  covenant and agree as
follows:

          1.1 DEFINITIONS. For purposes of this Section 1:

               (a) The terms "REGISTER,"  "REGISTERED," and "REGISTRATION" refer
to a registration  effected by preparing and filing a registration  statement or
similar  document in compliance with the Securities Act of 1933, as amended (the
"ACT"),  and the declaration or ordering of effectiveness  of such  registration
statement or document.

               (b) The term  "REGISTRABLE  SECURITIES"  means (i) the  shares of
Common Stock issuable upon exercise of the Warrants (such shares of Common Stock
are collectively referred to hereinafter as the "STOCK"),  (ii) any other shares
of Common Stock of the Company  issued as (or issuable  upon the  conversion  or
exercise of any warrant,  right or other security which is issued as) a dividend
or other  distribution with respect to, or in exchange for or in replacement of,
the Stock,  PROVIDED HOWEVER, that the foregoing definition shall exclude in all
cases any Registrable  Securities sold by a person in a transaction in which his
or her  rights  under  this  Agreement  are not  assigned.  Notwithstanding  the
<PAGE>
foregoing, Common Stock or other securities shall only be treated as Registrable
Securities  if and so long as they have not been (A) sold to or through a broker
or  dealer  or  underwriter  in a public  distribution  or a  public  securities
transaction,  or (B) sold in a  transaction  exempt  from the  registration  and
prospectus  delivery  requirements of the Act under Section 4(1) thereof so that
all transfer restrictions, and restrictive legends with respect thereto, if any,
are removed upon the consummation of such sale;

               (c)  The  number  of  shares  of  "REGISTRABLE   SECURITIES  THEN
OUTSTANDING"  shall be  determined  by the  number of  shares  of  Common  Stock
outstanding  which  are,  and the  number of shares  of  Common  Stock  issuable
pursuant to then exercisable or convertible  securities  which are,  Registrable
Securities;

               (d) The term "HOLDER" means any person owning or having the right
to acquire  Registrable  Securities or any assignee  thereof in accordance  with
Section 1.11 hereof;

               (e) The term  "FORM  S-3"  means  such  form  under the Act as in
effect on the date hereof or any successor form under the Act; and

               (f) The term "SEC" means the Securities and Exchange Commission.

          1.2 DEMAND REGISTRATION.

               (a) If the  Company  shall  receive at any time after the date of
this Agreement, a written request from a Holder or Holders that the Company file
a registration  statement under the Act covering the  registration of at 500,000
shares of Registrable Securities,  then the Company shall file within 30 days of
the receipt of such  request,  a  registration  statement  under the Act for all
Registrable  Securities which the Holders request to be registered and shall use
its  best  efforts  to  effect  as soon as  possible  the  registration  of such
Registrable Securities.

               (b) Notwithstanding  the foregoing,  if the Company shall furnish
to Holders  requesting a registration  statement pursuant to this Section 1.2, a
certificate  signed by the  President  of the Company  stating  that in the good
faith  judgment of the Board of Directors of the Company,  it would be seriously
detrimental to the Company and its shareholders for such registration  statement
to be  filed  and  it is  therefore  essential  to  defer  the  filing  of  such
registration  statement,  the Company  shall have the right to defer such filing
for a period of not more than sixty (60) days  after  receipt of the  request of
the Initiating Holders; PROVIDED, HOWEVER, that the Company may not utilize this
right more than once in any twelve-month period.

               (c) In addition, the Company shall not be obligated to effect, or
to take any action to effect, any registration pursuant to this Section 1.2:

                    (i) After the Company  has  effected  two (2)  registrations
pursuant  to this  Section  1.2 and such  registrations  have been  declared  or
ordered effective; or

                                       2
<PAGE>
                    (ii) If the initiating  Holders propose to dispose of shares
of  Registrable  Securities  that  may be  immediately  registered  on Form  S-3
pursuant to a request made pursuant to Section 1.12 below.

          1.3 PIGGYBACK  REGISTRATION.  If (but without any obligation to do so)
the Company  proposes to register  (including  for this  purpose a  registration
effected by the  Company for  shareholders  other than the  Holders)  any of its
stock under the Act in connection  with the public  offering of such  securities
solely  for cash  (other  than a  registration  relating  solely  to the sale of
securities to participants  in a Company stock plan or a transaction  covered by
Rule 145 under the Act),  the Company  shall,  at such time,  promptly give each
Holder written  notice of such  registration.  Upon the written  request of each
Holder given within twenty (20) days after mailing of such notice by the Company
in accordance with Section 4.5, the Company shall,  subject to the provisions of
Section  1.8,  cause  to be  registered  under  the Act  all of the  Registrable
Securities that each such Holder has requested to be registered.

          1.4 OBLIGATIONS OF THE COMPANY. Whenever required under this Section 1
to effect the registration of any Registrable Securities,  the Company shall, as
expeditiously as reasonably possible:

               (a) Prepare and file with the SEC a  registration  statement with
respect to such  Registrable  Securities  and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable  Securities  registered  thereunder,  keep such
registration statement effective for up to ninety (90) days.

               (b) Prepare and file with the SEC such amendments and supplements
to such  registration  statement and the prospectus used in connection with such
registration  statement as may be necessary to comply with the provisions of the
Act  with  respect  to  the  disposition  of  all  securities  covered  by  such
registration statement for up to ninety (90) days.

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

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

               (e) In the event of any underwritten public offering,  enter into
and  perform  its  obligations  under an  underwriting  agreement,  in usual and
customary  form,  with the managing  underwriter of such  offering.  Each Holder
participating  in such  underwriting  shall  also  enter  into and  perform  its
obligations under such an agreement.

                                       3
<PAGE>
               (f) Notify each Holder of Registrable  Securities covered by such
registration  statement  at any  time  when a  prospectus  relating  thereto  is
required to be delivered under the Act of the happening of any event as a result
of which the  prospectus  included in such  registration  statement,  as then in
effect,  includes  an untrue  statement  of a material  fact or omits to state a
material fact required to be stated  therein or necessary to make the statements
therein not misleading in the light of the  circumstances  then  existing,  such
obligation to continue for ninety (90) days.

               (g) Cause all such  Registrable  Securities  registered  pursuant
hereunder to be listed on each securities  exchange on which similar  securities
issued by the Company are then listed.

               (h) Provide a transfer  agent and registrar  for all  Registrable
Securities  registered  pursuant  hereunder  and a CUSIP  number  for  all  such
Registrable  Securities,  in each case not later than the effective date of such
registration.

               (i) Use its best efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to this Section 1, on
the date that such Registrable  Securities are delivered to the underwriters for
sale in  connection  with a  registration  pursuant  to this  Section 1, if such
securities are being sold through  underwriters,  or, if such securities are not
being sold through  underwriters,  on the date that the  registration  statement
with respect to such securities  becomes effective,  (i) an opinion,  dated such
date,  of the  counsel  representing  the  Company  for  the  purposes  of  such
registration,  in form and substance as is customarily  given to underwriters in
an underwritten public offering,  addressed to the underwriters,  if any, and to
the Holders requesting  registration of Registrable Securities and (ii) a letter
dated  such date,  from the  independent  certified  public  accountants  of the
Company, in form and substance as is customarily given by independent  certified
public accountants to underwriters in an underwritten public offering, addressed
to the  underwriters,  if any,  and to the Holders  requesting  registration  of
Registrable Securities.

          1.5  FURNISH  INFORMATION.  It shall be a condition  precedent  to the
obligations  of the Company to take any action  pursuant to this  Section 1 with
respect to the  Registrable  Securities  of any selling  Holder that such Holder
shall furnish to the Company such information  regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the  registration  of such  Holder's  Registrable
Securities.   The  Company  shall  have  no  obligation   with  respect  to  any
registration  requested pursuant to Section 1.2 or 1.12 of this Agreement if, as
a result of the application of the preceding  sentence,  the number of shares or
the anticipated  aggregate  offering price of the  Registrable  Securities to be
included  in the  registration  does not equal or exceed the number of shares or
the  anticipated  aggregate  offering price  required to originally  trigger the
Company's  obligation to initiate such  registration  as specified in subsection
1.2(a) or subsection 1.12(b)(2),whichever is applicable.

          1.6  EXPENSES  OF  DEMAND   REGISTRATION.   All  expenses  other  than
underwriting   discounts   and   commissions   incurred   in   connection   with
registrations,  filings or  qualifications  pursuant to Section  1.2,  including
(without limitation) all registration,  filing and qualification fees, printers'

                                       4
<PAGE>
and accounting fees, fees and disbursements of counsel for the Company,  and the
reasonable fees and  disbursements  of one counsel for the selling Holders shall
be borne by the Company.

          1.7 EXPENSES OF COMPANY  REGISTRATION.  The Company shall bear and pay
all  expenses   incurred  in  connection  with  any   registration,   filing  or
qualification  of  Registrable  Securities  with  respect  to the  registrations
pursuant to Section 1.3 for each Holder (which right may be assigned as provided
in Section 1.13),  including (without limitation) all registration,  filing, and
qualification  fees,  printers' and  accounting  fees relating or  apportionable
thereto and the reasonable fees and disbursements of one counsel for the selling
Holders selected by them with the approval of the Company,  which approval shall
not  be  unreasonably   withheld,   but  excluding  underwriting  discounts  and
commissions relating to Registrable Securities.

          1.8  UNDERWRITING  REQUIREMENTS.   In  connection  with  any  offering
involving an underwriting of shares of the Company's  capital stock, the Company
shall  not be  required  under  Section  1.3  to  include  any  of the  Holders'
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon  between the Company and the  underwriters  selected by it (or by
other  persons  entitled  to  select  the  underwriters),  and then only in such
quantity  as the  underwriters  determine  in  their  sole  discretion  will not
jeopardize  the success of the offering by the  Company.  If the total amount of
securities,  including Registrable  Securities,  requested by shareholders to be
included in such offering  exceeds the amount of  securities  sold other than by
the  Company  that the  underwriters  determine  in  their  sole  discretion  is
compatible with the success of the offering,  then the Company shall be required
to  include  in the  offering  only that  number of such  securities,  including
Registrable   Securities,   which  the  underwriters  determine  in  their  sole
discretion  will not jeopardize  the success of the offering (the  securities so
included to be apportioned pro rata among the selling shareholders  according to
the total amount of  securities  entitled to be included  therein  owned by each
selling  shareholder or in such other proportions as shall mutually be agreed to
by such selling shareholders) but in no event shall (i) the amount of securities
of the selling Holders  included in the offering be reduced below twenty percent
(20%) of the total amount of securities  included in such offering,  unless such
offering is the initial  public  offering of the  Company's  securities in which
case the  selling  shareholders  may be excluded  if the  underwriters  make the
determination described above and no other shareholder's securities are included
or (ii)  notwithstanding  (i)  above,  any shares  being  sold by a  shareholder
exercising a demand registration right similar to that granted in Section 1.2 be
excluded  from  such  offering.  For  purposes  of the  preceding  parenthetical
concerning  apportionment,  for any  selling  shareholder  which is a holder  of
Registrable Securities and which is a partnership or corporation,  the partners,
retired  partners and  shareholders  of such  holder,  or the estates and family
members of any such partners and retired partners and any trusts for the benefit
of any of  the  foregoing  persons  shall  be  deemed  to be a  single  "SELLING
SHAREHOLDER,"  and  any  pro  rata  reduction  with  respect  to  such  "SELLING
SHAREHOLDER"  shall be based  upon  the  aggregate  amount  of  shares  carrying
registration  rights  owned by all  entities  and  individuals  included in such
"SELLING SHAREHOLDER," as defined in this sentence.

          1.9 DELAY OF REGISTRATION. No Holder shall have any right to obtain or
seek an injunction  restraining or otherwise  delaying any such  registration as
the  result  of  any   controversy   that  might  arise  with   respect  to  the
interpretation or implementation of this Section 1.

                                       5
<PAGE>
          1.10  INDEMNIFICATION.  In the event any  Registrable  Securities  are
included in a registration statement under this Section 1:

               (a) To the extent  permitted by law,  the Company will  indemnify
and hold harmless each Holder,  any underwriter (as defined in the Act) for such
Holder and each person,  if any, who controls such Holder or underwriter  within
the meaning of the Act or the  Securities  Exchange Act of 1934, as amended (the
"EXCHANGE ACT"),  against any losses,  claims,  damages or liabilities (joint or
several) to which they may become  subject  under the Act,  the  Exchange Act or
other  federal  or  state  law,  insofar  as such  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof) arise out of or are based upon any
of  the  following   statements,   omissions  or  violations   (collectively   a
"VIOLATION"): (i) any untrue statement or alleged untrue statement of a material
fact  contained  in  such  registration  statement,  including  any  preliminary
prospectus  or  final  prospectus   contained   therein  or  any  amendments  or
supplements  thereto,  (ii) the omission or alleged  omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not  misleading;  or (iii) any  violation  or alleged  violation  by the
Company of the Act, the Exchange  Act, any state  securities  law or any rule or
regulation  promulgated  under the Act, the Exchange Act or any state securities
law; and the Company will pay to each such Holder,  underwriter  or  controlling
person, as incurred,  any legal or other expenses reasonably incurred by them in
connection  with  investigating  or  defending  any such  loss,  claim,  damage,
liability or action;  provided,  however, that the indemnity agreement contained
in this subsection  1.10(a) shall not apply to amounts paid in settlement of any
such loss,  claim,  damage,  liability or action if such  settlement is effected
without the  consent of the Company  (which  consent  shall not be  unreasonably
withheld),  nor shall the  Company be liable in any such case for any such loss,
claim,  damage,  liability  or action to the extent  that it arises out of or is
based upon a  Violation  with  occurs in reliance  upon and in  conformity  with
written  information  furnished  expressly  for  use  in  connection  with  such
registration by any such Holder, underwriter or controlling person.

               (b) To the extent  permitted  by law,  each  selling  Holder will
indemnify  and hold  harmless the Company,  each of its  directors,  each of its
officers who has signed the  registration  statement,  each person,  if any, who
controls the Company within the meaning of the Act, any  underwriter,  any other
Holder selling  securities in such  registration  statement and any  controlling
person of any such  underwriter  or other  Holder,  against any losses,  claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become  subject,  under the Act, the Exchange Act or other  federal or state
law,  insofar as such losses,  claims,  damages,  or liabilities  (or actions in
respect  thereto) arise out of or are based upon any Violation,  in each case to
the extent (and only to the extent) that such Violation  occurs in reliance upon
and in conformity with written  information  furnished by such Holder  expressly
for use in connection with such registration;  and each such Holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be  indemnified  pursuant to this  subsection  1.10(b),  in  connection  with
investigating or defending any such loss, claim, damage,  liability,  or action;
provided,  however,  that the indemnity  agreement  contained in this subsection
1.10(b) shall not apply to amounts paid in  settlement of any such loss,  claim,
damage,  liability or action if such settlement is effected  without the consent
of the Holder, which consent shall not be unreasonably withheld;  provided that,
in no event shall any indemnity  under this  subsection  1.10(b)  exceed the net
proceeds  from the  offering  received  by such  Holder,  except  in the case of
willful fraud by such Holder.

                                       6
<PAGE>
               (c) Promptly  after  receipt by an  indemnified  party under this
Section  1.10  of  notice  of the  commencement  of any  action  (including  any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, deliver to
the  indemnifying  party a written  notice of the  commencement  thereof and the
indemnifying  party shall have the right to  participate  in, and, to the extent
the indemnifying  party so desires,  jointly with any other  indemnifying  party
similarly  noticed,   to  assume  the  defense  thereof  with  counsel  mutually
satisfactory  to the  parties;  provided,  however,  that an  indemnified  party
(together with all other  indemnified  parties which may be represented  without
conflict by one counsel)  shall have the right to retain one  separate  counsel,
with the reasonable fees and expenses to be paid by the  indemnifying  party, if
representation  of  such  indemnified  party  by  the  counsel  retained  by the
indemnifying  party would be inappropriate due to actual or potential  differing
interests between such indemnified party and any other party represented by such
counsel  in such  proceeding.  The  failure  to  deliver  written  notice to the
indemnifying  party within a  reasonable  time of the  commencement  of any such
action, if prejudicial to its ability to defend such action,  shall relieve such
indemnifying  party of any liability to the indemnified party under this Section
1.10, but the omission so to deliver  written notice to the  indemnifying  party
will not relieve it of any liability that it may have to any  indemnified  party
otherwise than under this Section 1.10.

               (d) If the  indemnification  provided for in this Section 1.10 is
held by a court of competent  jurisdiction  to be  unavailable to an indemnified
party with respect to any loss, liability,  claim, damage or expense referred to
therein,  then the indemnifying  party, in lieu of indemnifying such indemnified
party  hereunder,  shall  contribute  to the  amount  paid  or  payable  by such
indemnified party as a result of such loss, liability,  claim, damage or expense
in such  proportion  as is  appropriate  to reflect  the  relative  fault of the
indemnifying  party on the one hand and of the indemnified party on the other in
connection  with  the  statements  or  omissions  that  resulted  in such  loss,
liability,  claim,  damage or  expense as well as any other  relevant  equitable
considerations;  provided,  that, in no event shall any contribution by a Holder
under this Subsection 1.10(d) exceed the net proceeds from the offering received
by such Holder, except in the case of willful fraud by such Holder. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by  reference  to,  among other  things,  whether  the untrue or alleged  untrue
statement of a material fact or the omission to state a material fact relates to
information  supplied by the indemnifying  party or by the indemnified party and
the parties' relative intent, knowledge, access to information,  and opportunity
to correct or prevent such statement or omission.

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

                                       7
<PAGE>
               (f) The obligations of the Company and Holders under this Section
1.10 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.

          1.11 REPORTS  UNDER  SECURITIES  EXCHANGE ACT OF 1934.  With a view to
making  available to the Holders the benefits of Rule 144 promulgated  under the
Act and any other rule or  regulation  of the SEC that may at any time  permit a
Holder to sell  securities of the Company to the public without  registration or
pursuant to a registration on Form S-3, the Company agrees to:

               (a) make and keep public  information  available,  as those terms
are  understood and defined in SEC Rule 144, at all times so long as the Company
remains  subject to the periodic  reporting  requirements  under  Sections 13 or
15(d) of the Exchange Act;

               (b) take such  action,  as is  necessary to enable the Holders to
utilize Form S-3 for the sale of their Registrable Securities;

               (c) file with the SEC in a timely  manner all  reports  and other
documents required of the Company under the Act and the Exchange Act; and

               (d)  furnish  to any  Holder,  so long  as the  Holder  owns  any
Registrable  Securities,  forthwith upon request (i) a written  statement by the
Company that it has complied  with the reporting  requirements  of SEC Rule 144,
the Act and the  Exchange  Act,  or that  it  qualifies  as a  registrant  whose
securities  may be  resold  pursuant  to  Form  S-3  (at any  time  after  it so
qualifies),  (ii) a copy of the most recent  annual or  quarterly  report of the
Company and such other reports and documents so filed by the Company,  and (iii)
such other information as may be reasonably  requested in availing any Holder of
any  rule or  regulation  of the SEC  which  permits  the  selling  of any  such
securities without registration or pursuant to such form.

          1.12 FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder or Holders of not less than 500,000 shares of the Registrable  Securities
then  outstanding  a written  request  or  requests  that the  Company  effect a
registration on Form S-3, provided that the Company is eligible to register such
securities on Form S-3, and any related qualification or compliance with respect
to all or a part of the Registrable  Securities owned by such Holder or Holders,
the Company will:

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

               (b) as soon as practicable, effect such registration and all such
qualifications  and  compliances  as may be so requested  and as would permit or
facilitate the sale and  distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request,  together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such  request as are  specified  in a written  request  given  within
fifteen  (15) days  after  receipt  of such  written  notice  from the  Company;
provided,  however,  that the Company  shall not be obligated to effect any such
registration,  qualification or compliance pursuant to this Section 1.12: (i) if
Form S-3 is not available for such offering by the Holders;  (ii) if the Company

                                       8
<PAGE>
shall  furnish  to the  Holders a  certificate  signed by the  President  of the
Company stating that in the good faith judgment of the Board of Directors of the
Company,  it would be seriously  detrimental to the Company and its shareholders
for such Form S-3  Registration  to be effected at such time, in which event the
Company  shall have the right to defer the  filing of the Form S-3  registration
statement  for a period of not more than sixty  (60) days  after  receipt of the
request of the Holder or Holders  under this Section  1.12;  provided,  however,
that the Company shall not utilize this right more than once in any twelve month
period;  (iii) if the Company has already effected two registrations on Form S-3
for  the  Holders  pursuant  to this  Section  1.12;  or (iv) in any  particular
jurisdiction in which the Company would be required to qualify to do business or
to  execute  a  general   consent  to  service  of  process  in  effecting  such
registration, qualification or compliance.

               (c)  Subject  to  the   foregoing,   the  Company  shall  file  a
registration  statement covering the Registrable Securities and other securities
so  requested  to be  registered  as soon as  practicable  after  receipt of the
request or requests of the Holders.  All expenses  incurred in connection with a
registration  requested pursuant to Section 1.12, including (without limitation)
all registration,  filing, qualification,  printers' and accounting fees and the
reasonable fees and  disbursements of a single counsel for the selling Holder or
Holders and counsel for the Company,  but excluding any underwriters'  discounts
or commissions associated with Registrable  Securities,  shall be borne pro rata
by  the  Holder  or  Holders   participating  in  the  Form  S-3   Registration.
Registrations  effected  pursuant to this  Section  1.12 shall not be counted as
demands for registration or registrations  effected  pursuant to Sections 1.2 or
1.3, respectively.

          1.13  ASSIGNMENT  OF  REGISTRATION  RIGHTS.  The  rights  to cause the
Company to register  Registrable  Securities  pursuant to this  Section 1 may be
assigned (but only with all related  obligations) by a Holder to a transferee or
assignee of at least 250,000 shares of such securities, provided the Company is,
within a reasonable  time after such transfer,  furnished with written notice of
the name and address of such  transferee  or assignee  and the  securities  with
respect to which such  registration  rights are being  assigned;  and  provided,
further,  that such assignment shall be effective only if immediately  following
such transfer the further  disposition  of such  securities by the transferee or
assignee is restricted under the Act. For the purposes of determining the number
of shares of  Registrable  Securities  held by a  transferee  or  assignee,  the
holdings of  transferees  and  assignees  of a  partnership  who are partners or
retired partners of such partnership  (including  spouses and ancestors,  lineal
descendants  and  siblings of such  partners or spouses who acquire  Registrable
Securities by gift, will or intestate  succession) shall be aggregated  together
and with the partnership;  provided that all assignees and transferees who would
not qualify  individually  for  assignment of  registration  rights shall have a
single  attorney-in-fact  for the purpose of  exercising  any rights,  receiving
notices or taking any action under Section 1.

          1.14 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of the Holders of a majority of the outstanding  Registrable  Securities,  enter
into  any  agreement  relating  to  registration   rights  with  any  holder  or
prospective  holder of any  securities  of the Company  unless the terms of such
registration rights are subordinate to or on parity with the registration rights
granted to Investor as set forth Section 1 of this Agreement.

                                       9
<PAGE>
     2.  INSPECTION.  The Company  shall permit each Investor who holds not less
than 250,000 shares of Registrable  Securities,  at such Investor's  expense, to
visit and inspect the Company's properties,  to examine its books of account and
records and to discuss the  Company's  affairs,  finances and accounts  with its
officers,  all  at  such  reasonable  times  as may be  requested  by  Investor;
PROVIDED,  HOWEVER,  that the Company  shall not be  obligated  pursuant to this
Section 2 to provide access to any information which it reasonably  considers to
be a trade secret or similar confidential information.

     3. INVESTOR'S RIGHT OF FIRST REFUSAL.

          3.1  RIGHT OF FIRST  REFUSAL.  Subject  to the  terms  and  conditions
specified  in this Section 3, the Company  hereby  grants to Investor a right of
first  refusal with respect to an  Investor's  Pro Rata Portion (as  hereinafter
defined)  of  future  sales by the  Company  of any  shares  of,  or  securities
convertible  into or  exercisable  for any shares  of, any class of its  capital
stock  ("SHARES").  For purposes of this Section 3, an  "INVESTOR"  includes any
general  partners,  shareholders and affiliates of an Investor.  An Investor who
chooses to exercise the right of first refusal may designate as purchasers under
such right itself or its partners or affiliates in such  proportions as it deems
appropriate.  An Investor's "PRO RATA PORTION" for purposes of this Section 3 is
the ratio that (x) the sum of the number of shares of the Company's Common Stock
then held by Investor  and the number of shares of the  Company's  Common  Stock
issuable upon  exercise of the Warrants  then held by Investor  bears to (y) the
sum  of  the  total  number  of  shares  of  the  Company's  Common  Stock  then
outstanding.

          3.2 NOTICE OF RIGHT. In the event the Company proposes to undertake an
issuance of Shares,  it shall give  Investor  written  notice of its  intention,
describing  the type of Shares and the price and terms  upon  which the  Company
proposes to issue the same.  Investor shall have fifteen (15) days from the date
of receipt of any such notice to agree to purchase  shares of such Shares (up to
the amount  referred to in subsection  3.1), and upon the terms specified in the
notice, by giving written notice to the Company and stating therein the quantity
of Shares to be purchased.

          3.3  EXERCISE  OF  RIGHT.  If  Investor  exercises  its right of first
refusal  under this  Agreement,  the closing of the  purchase of the Shares with
respect to which such right has been  exercised  shall take place within  thirty
(30) calendar days after Investor gives notice of such exercise, which period of
time shall be extended in order to comply with applicable laws and  regulations.
Upon exercise of such right of first refusal,  the Company and Investor shall be
legally obligated to consummate the purchase  contemplated thereby and shall use
their best efforts to secure any approvals required in connection therewith.

          3.4 LAPSE AND  REINSTATEMENT  OF RIGHT. In the event Investor fails to
exercise  the right of first  refusal  provided  in this  Section 3 within  said
fifteen (15) day period,  the Company shall have thirty (30) days  thereafter to
sell or enter into an agreement  (pursuant  to which the sale of Shares  covered
thereby shall be closed, if at all, within sixty (60) days from the date of said
agreement)  to sell the Shares not  elected to be  purchased  by Investor at the
price and upon the terms no more favorable to the purchasers of such  securities
than  specified in the Company's  notice.  In the event the Company has not sold

                                       10
<PAGE>
the Shares or entered into an  agreement  to sell the Shares  within said thirty
(30) day period  (or sold and issued  Shares in  accordance  with the  foregoing
within sixty (60) days from the date of said  agreement),  the Company shall not
thereafter  issue or sell any Shares without first  offering such  securities to
Investor in the manner provided above.

          3.5 EXCLUSIONS FROM  DEFINITION OF SHARES.  The right of first refusal
in this Section 3 shall not be applicable (i) shares of Common Stock issuable or
issued to employees,  consultants or directors of this Corporation pursuant to a
stock plan  approved by the Board of Directors  of the  Company,  or (ii) to the
issuance of  securities  pursuant  to the  conversion  or exercise of  currently
outstanding convertible or exercisable  securities,  or (iii) to the issuance of
securities in  connection  with a bona fide  business  acquisition  of or by the
Company, whether by merger,  consolidation,  sale of assets, sale or exchange of
stock or otherwise,  or (iv) to the issuance of securities  that, with unanimous
approval  of the Board of  Directors  of the  Company,  are not  offered  to any
existing shareholder of the Company.

     4. MISCELLANEOUS.

          4.1 SUCCESSORS AND ASSIGNS.  Except as otherwise  provided herein, the
terms and  conditions  of this  Agreement  shall  inure to the benefit of and be
binding upon the respective  successors  and assigns of the parties.  Nothing in
this Agreement,  express or implied,  is intended to confer upon any party other
than the parties hereto or their  respective  successors and assigns any rights,
remedies,  obligations,  or  liabilities  under or by reason of this  Agreement,
except as expressly provided in this Agreement.

          4.2  GOVERNING  LAW.  This  Agreement  and all acts  and  transactions
pursuant hereto shall be governed,  construed and interpreted in accordance with
the laws of the  State of Utah,  without  giving  effect  to the  principles  of
conflicts of law.

          4.3  COUNTERPARTS.  This  Agreement  may be  executed  in two or  more
counterparts,  each of  which  shall  be  deemed  an  original  and all of which
together shall constitute one instrument.

          4.4  TITLES AND  SUBTITLES.  The  titles  and  subtitles  used in this
Agreement  are  used  for  convenience  only  and  are not to be  considered  in
construing or interpreting this Agreement.

          4.5  NOTICES.  Unless  otherwise  provided,  any  notice  required  or
permitted by this Agreement  shall be in writing and shall be deemed  sufficient
on the date of delivery,  when delivered  personally or by overnight  courier or
sent by telegram or fax, or forty-eight  (48) hours after being deposited in the
U.S. mail, as certified or registered mail, with postage prepaid,  and addressed
to the party to be notified at such party's  address as set forth herein,  or as
subsequently modified by written notice.

          4.6  EXPENSES.  If any  action  at law or in equity  is  necessary  to
enforce or interpret the terms of this Agreement,  the prevailing party shall be
entitled to reasonable  attorneys'  fees,  costs and necessary  disbursements in
addition to any other relief to which such party may be entitled.

                                       11
<PAGE>
          4.7 AMENDMENTS AND WAIVERS.  Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular  instance and either  retroactively or  prospectively),  only
with the  written  consent of the Company and the holders of at least 50% of the
Registrable  Securities  then  outstanding.  Any amendment or waiver effected in
accordance  with  this  paragraph  shall be  binding  upon  each  holder  of any
Registrable  Securities  then  outstanding,  each  future  holder  of  all  such
Registrable Securities, and the Company.

          4.8 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable  under applicable law, the parties agree to renegotiate such
provision in good faith.  In the event that the parties  cannot reach a mutually
agreeable  and  enforceable  replacement  for  such  provision,  then  (x)  such
provision  shall  be  excluded  from  this  Agreement,  (y) the  balance  of the
Agreement shall be interpreted as if such provision were so excluded and (z) the
balance of the Agreement shall be enforceable in accordance with its terms.

          4.9  AGGREGATION  OF STOCK.  Except with respect to Section 1.11,  all
shares of the Registrable  Securities held or acquired by affiliated entities or
persons  shall  be  aggregated  together  for the  purpose  of  determining  the
availability of any rights under this Agreement.

     IN WITNESS  WHEREOF,  the parties hereto  executed this  Investor's  Rights
Agreement as of the date first written above.

                                         EBIZ ENTERPRISES, INC.

                                         By: /s/ Stephen C. Herman
                                             -----------------------------------
                                             Name: Stephen C. Herman
                                             Title: Chief Financial Officer

                                             Address: 15695 North 83rd Way
                                                      Scottsdale, Arizona 85260

                                         THE CANOPY GROUP, INC.

                                         By: /s/ Darcy Mott
                                             -----------------------------------
                                             Name: Darcy Mott
                                             Title: Chief Financial Officer and
                                                    Treasurer

                                             Address: 240 West Center Street
                                                      Orem, UT 84057

                                       12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00018-of-00352.parquet"}]]