Document:

8.0% NON-NEGOTIABLE CONVERTIBLE SUBORDINATED PROMISSORY NOTE

September 21, 2000                                               US$2,000,000.00

FOR VALUE RECEIVED, CHAPARRAL RESOURCES, INC., a Delaware corporation ("Maker"),
promises to pay to the order of Whittier Ventures, LLC, a corporation organized
under the laws of Nevada ("Payee"), in lawful money of the United States of
America, the principal amount (the "Principal Amount") of TWO MILLION DOLLARS
(US$2,000,000.00), together with interest in arrears on the unpaid principal
balance at an annual rate equal to eight percent per annum (8.0%), in the manner
and subject to adjustment as provided below. Interest shall be calculated on the
basis of a year of 365 or 366 days, as applicable, and charged for the actual
number of days elapsed.

     The following additional terms shall govern this Note:

1.   PRINCIPAL AND INTEREST

     The entire Principal Amount of this Note together with accrued and unpaid
interest thereon shall be due and payable in the manner provided in Paragraph 2.

2.   MANNER OF PAYMENT

(a)  Except as provided in Paragraph 2.2(b), the Principal Amount and
accrued and unpaid interest thereon shall be made in shares of the Maker's
common stock, $0.0001 par value ("Common Stock"), not later than the tenth
(10th) business day following the approval by the shareholders of the Maker, at
a general meeting or special meeting called in whole or in part for such
purpose, of the terms of this Paragraph 2.2(a). The number of shares of Maker
Common Stock to be issued pursuant to this Paragraph 2.2(b) shall be equal to
the product of the Principal Amount together with accrued and unpaid interest
thereon divided by $1.86 (the "Conversion Price"). Payment shall be made by
delivering such shares to Payee at 1600 Huttington Drive, South Pasadena, CA
91030, or at such other place as Payee shall designate to Maker in writing.
Delivery of such stock certificates shall be made by registered mail, return
receipt requested, or by a recognized overnight delivery service.

(b)  In the event that a majority of the shareholders of the Maker fail to
approve the manner of payment provided in Paragraph 1.2(a), (i) the interest
rate of this Note shall automatically, without any action required to be taken
by Maker or Payee, be increased to the lesser of twenty five percent (25%) per
annum or the maximum note allowed by the laws of the State of Texas and (ii) the
Principal Amount, together with all accrued and unpaid interest shall be due and
payable on October 31, 2001.

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3.   REPRESENTATIONS OF MAKER

     The Maker hereby represents and warrants to the Payee as follows:

(a)  The Maker is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all corporate power and
authority to own and lease its properties and to conduct its business as
presently conducted.

(b)  This Note has been duly authorized by all necessary corporate action on
the part of the Maker. This Note has been duly executed and delivered by Maker
and constitutes the valid and binding agreement of Maker, enforceable against
Maker in accordance with its terms, except as the enforceability hereof may be
subject to applicable bankruptcy, insolvency, reorganization, or other similar
laws affecting creditors' rights generally and to general principles of equity.

(c)  When approved by a majority of the shareholders of Maker, the issuance
of the Maker's shares as provided in Paragraph 2(a) will have been duly
authorized and, upon the issuance thereof will be validly issued, fully paid and
non-assessable.

(d)  The execution and delivery of this Note will not (i) except for filings
that may be made under the securities laws and with NASDAQ, as contemplated by
this Note or where the absence would not have a material adverse effect on the
Maker, require consent, approval, waiver or authorization from or registration
or filing with any party, including but not limited to any party to any material
agreement to which the Maker is a party or by which it is bound or by any
regulatory or governmental agency, body or entity or (ii) violate any statute,
law, rule, regulation or ordinance, or any judgment, decree, order, regulation
or rule of any court, tribunal, administrative or governmental agency, body or
entity to which the Maker or its properties are subject.

4.   REPRESENTATIONS OF PAYEE

(a)  Payee is an "accredited investor" as that term is defined in Rule 501
of Regulation D promulgated by the SEC under the Securities Act of 1933 as
amended (the "Act"). Payee further represents that Payee considers itself to be
a sophisticated investor in companies similarly situated to the Maker, and Payee
has substantial knowledge and experience in financial and business matters
(including knowledge of finance, securities and investments, generally, and
experience and skill in investments based on actual participation) such that
Payee is capable of evaluating the merits and risks of this Note.

(b)  Payee has been advised and acknowledges that any shares issued by the
Maker pursuant to the Note have not been registered under the Act, in reliance
upon the exemption(s) from registration promulgated thereunder. Payee also
acknowledges that the issuance of any shares have not be registered under the
securities laws of any state. Consequently, Payee agrees that pursuant to this
Note, such shares cannot be resold, unless they are registered under the Act and
applicable state securities laws, or unless an exemption from such registration
requirements is available.

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(c)  Any shares acquired by Payee pursuant to this Note are solely for
Payee's own account and not as nominee for, representative of, or otherwise on
behalf of, any other person. Payee is acquiring any such shares with the
intention of holding such shares for investment, with no present intention of
participating, directly or indirectly, in a subsequent public distribution of
the shares, unless registered under the Act and applicable state securities
laws, or unless an exemption from such registration requirements is available.
Payee shall not make any sale, transfer or other disposition of any of the
shares in violation of any state or federal law.

(d)  Payee has been advised and agrees that there will be placed on any
certificates representing any shares issued pursuant to this Note, a legend
stating in substance the following (and including any restrictions or conditions
that may be required by any applicable state law), and Payee has been advised
and further agrees that the Maker will refuse to permit the transfer of the
shares out of Payee's name in the absence of compliance with the terms of such
legend:

          "The securities represented by this certificate have not
          been registered under the Securities Act of 1933, as
          amended, or under any state securities laws and may not be
          sold, pledged, transferred, assigned or otherwise disposed
          of except in accordance with such Act and the rules and
          regulations thereunder and in accordance with applicable
          state securities laws. The Maker will transfer such
          securities only upon receipt of evidence satisfactory to the
          Maker, which may include an opinion of counsel, that the
          registration provisions of such Act have been compiled with
          or that such registration is not required and that such
          transfer will not violate any applicable state securities
          laws."

5.   REGISTRATION RIGHTS

(a)  Definitions. For purposes of this Paragraph 5, the following terms
shall have the respective meanings set forth below:

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

          (ii) The term "holder or holders of Registrable Stock" shall mean the
          holder of any shares issued pursuant to this Note.

          (iii) 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 Act, and the declaration or
          ordering of effectiveness of such registration statement or document
          by the Commission.

          (iv) The term "Registrable Stock" means (a) the shares issued pursuant
          to this Note; provided, however, that shares of Registrable Stock will
          cease to be Registrable Stock if they are sold or transferred pursuant
          to a registered public offering or other transaction which does not
          result in restrictions on resale being imposed on the public transfer
          by virtue of federal or state securities laws; and provided further
          that Registrable Stock will cease to be Registrable Stock if the
          holder could sell or transfer all such Shares held by him/her pursuant
          to Rule 144 promulgated under the Act.

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(b)  Demand Registration.

          (i) Upon the written request of any holder or holders ("Initiating
          Holders") of at least 30% of the shares of Registrable Stock, which
          request shall state the intended method of disposition by such
          Initiating Holders and shall request that the Maker effect the
          registration of all or part of the Registrable Stock under the
          Securities Act, the Maker shall promptly give written notice of such
          requested registration to all other holders, if any, of Registrable
          Stock. If, after the expiration of 30 days from the giving of such
          notice to the holders of Registrable Stock, the Maker shall have
          received written requests to register at least 50% of the shares of
          Registrable Stock, which requests shall state the intended method of
          disposition of such securities by such holders, the Maker shall use
          all reasonable efforts to prepare and file with the Commission a
          registration statement and such other documents, including a
          prospectus, as may be necessary to permit a public offering and sale
          of such Registrable Stock in the United States in compliance with the
          provisions of the Securities Act, all to the extent required to permit
          the disposition (in accordance with the intended methods thereof as
          aforesaid) by the holders of the Registrable Stock so to be registered
          (the "Participating Holders"). If such sale of Registrable Stock is to
          be pursuant to an underwritten offering, the underwriter shall be
          selected by the Initiating Holders and shall be reasonably acceptable
          to the Maker. If the underwriter selected determines that the number
          of shares so to be included is required to be limited due to market
          conditions or otherwise, the holders of Registrable Stock proposing to
          sell their shares in such underwritten registration shall share pro
          rata (according to the number of shares requested to be registered) in
          the number of shares being underwritten (as determined by such
          underwriter) and registered for their account. The Maker shall only be
          required to effect two registrations pursuant to this Paragraph 5(b).

          (ii) The Maker shall not be required to effect any registration under
          this Paragraph 5(b) within nine months after the completion of any
          Registered offering of its securities pursuant.

          (iii) The Maker shall have the right to include in any registration
          statement or post-effective amendment filed pursuant to this Paragraph
          5(b), other securities of the Maker then proposed to be distributed,
          except that, to the extent consistent with the rights of other holders
          of the Maker's securities, if and to the extent that the underwriter
          or underwriters acting with respect of such registered offering
          reasonably determine that the inclusion of such other securities may
          substantially prejudice or hinder the offering of Registrable Stock,
          the number of such other securities shall be reduced or eliminated
          prior to any reduction in the number of shares of Registrable Stock so
          to be registered.

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<PAGE>

          (iv) If the registration under this Paragraph 5(b) is effected on a
          Form S-3 (or any successor form thereto), and the effectiveness of
          such registration statement can be maintained without significant
          additional expense to the Maker, then the Maker agrees to maintain the
          effectiveness of such registration statement for a period of six
          months after its initial effective date.

(c)  Incidental or Piggyback Registration.

          (i) If the Maker at any time or from time to time proposes to file
          with the Commission a registration statement under the Act with
          respect to any proposed distribution of any of its securities (other
          than a registration to be effected on Form S-4, S-8 or other similar
          limited purpose form), whether for sale for its own account or for the
          account of any other person holding registration rights with respect
          to the securities of the Maker, then the Maker shall give written
          notice of such proposed filing to the holders of Registrable Stock at
          least ten days before the anticipated filing date, and such notice
          shall describe in detail the proposed registration and distribution
          (including those jurisdictions where registration or qualification
          under the securities or blue sky laws is intended) and shall offer the
          holders of Registrable Stock the opportunity to register such number
          of shares of Registrable Stock as the holders of Registrable Stock may
          request. Upon receipt by the Maker by the anticipated filing date of
          written requests from Participating Holders for the Maker to register
          their Registrable Stock, the Maker shall permit, or in the event of an
          underwritten offering, shall use its reasonable best efforts to cause
          the managing underwriter or underwriters of such proposed underwritten
          offering to permit, the Participating Holders to include such
          Registrable Stock in such offering on the same terms and conditions as
          any similar securities of the Maker included therein; provided,
          however, that if in the opinion of the managing underwriter or
          underwriters of such offering, the inclusion of the total amount
          Registrable Stock which it or the Maker, and any other persons or
          entities, intend to include in such offering would interfere, hinder,
          delay, reduce or prevent the effectiveness or sale of the Maker's
          securities proposed to be so registered, or would otherwise adversely
          affect the success of such offering, then the amount or kind of
          securities to be offered for the accounts of the Maker and each holder
          of Maker Securities (including without limitation Registrable Stock)
          or securities convertible into or exercisable for Maker securities
          proposed to be registered (other than any persons exercising demand
          registration rights) shall be reduced (or eliminated) in proportion to
          their respective values to the extent necessary to reduce the total
          amount of securities to be included in such offering on behalf of such
          holders of securities to the amount recommended by such managing
          underwriter. For purposes of this Paragraph, "value" shall mean
          principal amount with respect to debt securities and the proposed
          offering price per share with respect to equity securities.
          Notwithstanding the foregoing, if, at any time after giving written
          notice of its intention to register securities and prior to the
          effectiveness of the registration statement filed in connection with

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<PAGE>

          such registration, the Maker determines for any reason either not to
          effect such registration or to delay such registration, the Maker may,
          at its election, by delivery of written notice to the Participating
          Holders, (i) in the case of a determination not to effect
          registration, relieve itself of its obligations to register any
          Registrable Stock in connection with such registration, or (ii) in the
          case of determination to delay the registration, delay the
          registration of such Registrable Stock for the same period as the
          delay in the registration of such other shares of Common Stock or
          other securities convertible into or exercisable for Common Stock.

          (ii) The Maker shall not be required to include any of the Registrable
          Stock of a Participating Holder in any registration statement or
          post-effective amendment prepared at its own instance unless such
          Participating Holder shall furnish such information and sign such
          documents as may be required by the Commission or reasonably requested
          by the Maker, in accordance with generally accepted practices, in
          connection with such proposed distribution.

(d)  Covenants of the Maker with Respect to Registration. In connection with
any registration under this Paragraph 5, the Maker will, as expeditiously as is
reasonably practicable:

          (i) Prepare and file with the Commission a registration statement with
          respect to such Participating Holders and, subject to the last
          sentence of Paragraph 5(c)(i) hereof, use its reasonable best efforts
          to cause such registration statement to become effective.

          (ii) Prepare and file with the Commission such amendments and
          supplements to such registration statement and 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.

          (iii) Furnish to the Participating Holders such numbers of copies of a
          prospectus, including, if applicable, a preliminary prospectus, in
          conformity with the requirements of the Act, and such other documents
          as the selling shareholders may reasonably request in order to
          facilitate the disposition of Registrable Stock owned by the
          Participating Holders.

          (iv) 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 within the United States as shall
          be reasonably requested by the Participating Holders; provided,
          however, that the Maker 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.

          (v) 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. The
          Participating Holders shall also enter into and perform their
          obligations under such an agreement.

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<PAGE>

          (vi) Notify the Participating Holders, at any time when a prospectus
          relating to Registrable Stock covered by such registration statement
          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.

(e)  The Maker shall pay all costs, fees and expenses in connection with all
registration statements filed under this Paragraph 5 including, without
limitation, the Maker's legal and accounting fees, printing expenses and blue
sky fees and expenses, but not including (i) the fees and expenses of counsel
for the Participating Holders in connection with such registration; and (ii) the
underwriting discounts and commissions and underwriters' expenses allocable to
the Registrable Stock being registered or state transfer taxes.

6.   SALE OF ADDITIONAL SHARES BELOW CONVERSION PRICE

(a)  If at any time or from time to time within a period of three hundred
and sixty-five (365) days after the date of this Note, the Maker issues or sells
Additional Shares of Common Stock (as hereinafter defined), other than as a
dividend or other distribution on any class of stock for an Effective Price per
share (as hereinafter defined) that is less than the Conversion Price, then and
in each such case, the Payee shall be entitled to an additional number of shares
of Common Stock (the "Adjusted Shares") which when added to the number of shares
acquired pursuant to Paragraph 2(a) and divided by the by the Conversion Price
shall be equal to the Effective Price per share.

(b)  For purposes of the foregoing paragraph, the consideration received by
the Maker for any issuance or sale of Common Stock shall (i) to the extent it
consists of cash be computed at the net amount of cash received by the Maker
after deduction of any expenses payable by the Maker and any underwriting or
similar commissions, compensation, or concessions paid or allowed by the Maker
in connection with such issuance or sale, and (ii) to the extent it consists of
property other than cash, be computed at the fair value of that property as
reasonably determined in good faith by the Maker's Board of Directors.

(c)  "Additional Shares of Common Stock" shall mean all shares of Common
Stock issued by the Maker after the date of this Note other than (i) shares of
Common stock or options or warrants to acquire Common Stock issued to
management, directors or employees of, or consultants to, the Maker or any
Subsidiary, (ii) shares of Common Stock issuable upon exercise of convertible
securities, (iii) shares of Common Stock issued to Allen & Company, Whittier
Trust or any other current holders of any debt of the Maker, (iv) shares of
Common Stock issued pursuant to any rights offering to current shareholders and
(iii) shares of Common Stock or options or warrants to acquire Common Stock
issued in connection with investment banking, financial advisory or legal
services provided to the Maker.

(d)  The "Effective Price" of Additional Shares of Common Stock shall mean
the quotient determined by dividing the total number of Additional Shares of
Common Stock issued or sold, into the aggregate consideration received, or
deemed to have been received by the Maker for the issuance of such Additional
Shares of Common Stock.

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7.   EVENTS OF DEFAULT

     The occurrence of any one or more of the following events with respect to
Maker shall constitute an event of default hereunder ("Event of Default"):

(a)  If pursuant to, or within the meaning of, the United States Bankruptcy
Code or any other federal or state law relating to insolvency or relief of
debtors (a "Bankruptcy Law"), Maker shall (i) commence a voluntary case or
proceeding; (ii) consent to the entry of an order for relief against it in an
involuntary case; (iii) consent to the appointment of a trustee, receiver,
assignee, liquidator or similar official; (iv) make an assignment for the
benefit of its creditors; or (v) admit in writing its inability to pay its debts
as they become due.

(b)  If a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that (i) is for relief against Maker in an involuntary case,
(ii) appoints a trustee, receiver, assignee, liquidator or similar official for
Maker or substantially all of Maker's properties, or (iii) orders the
liquidation of Maker, and in each case the order or decree is not dismissed
within one hundred and twenty (120) days.

(c)  Upon the occurrence of an Event of Default hereunder (unless all Events
of Default have been cured or waived by Payee), Payee may, at its option, (i) by
written notice to Maker, declare the entire unpaid principal balance of this
Note, together with all accrued interest thereon, immediately due and payable
regardless of any prior forbearance, and (ii) exercise any and all rights and
remedies available to it under applicable law, including, without limitation,
the right to collect from Maker all sums due under this Note. Maker shall pay
all reasonable costs and expenses incurred by or on behalf of Payee in
connection with Payee's exercise of any or all of its rights and remedies under
this Note, including, without limitation, reasonable attorneys' fees.

8.   SUBORDINATION

     Payee agrees to subordinate this Note on such terms and conditions as may
be requested by Shell Capital Limited ("Shell") in connection with the Loan
Agreement among Maker, Shell, Central Asia Petroleum (Guernsey) Limited, Central
Asia Petroleum Inc., Karakuduk-Munay, Inc. and certain other facilities agents
and lenders. If requested by Shell, Payee agrees to execute and deliver to Shell
a subordination agreement relating to this Note.

9.   PREPAYMENT

     From and after the date of this Note, the outstanding Principal Amount may
be prepaid by Maker, in whole or in part, on written notice given by Maker to
Payee. On the prepayment date, Maker shall pay to Payee in the manner specified
in Paragraph 2(b), the Principal Amount to be prepaid plus accrued interest
thereon to and including the date of prepayment and Payee shall return this Note
to the Maker.

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10.  MISCELLANEOUS

(a)  If any provision in this Note is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Note will remain
in full force and effect. Any provision of this Note held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

(b)  This Note will be governed by the laws of the State of Texas without
regard to conflicts of laws principles.

(c)  This Note shall bind Maker and its successors and assigns. This Note
shall not be assigned or transferred by Payee without the express prior written
consent of Maker.

(d)  The headings of Paragraphs in this Note are provided for convenience
only and will not affect its construction or interpretation. All references to
"Paragraph" or "Paragraphs" refer to the corresponding Paragraph or Paragraphs
of this Note unless otherwise specified.

(e)  All words used in this Note will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
words "hereof" and "hereunder" and similar references refer to this Note in its
entirety and not to any specific Paragraph or subParagraph hereof.

IN WITNESS WHEREOF, Maker has executed and delivered this Note as of the date
first stated above.

CHAPARRAL RESOURCES, INC.

By: /s/ Michael B. Young

                                       9<PAGE>   1

                                                                     EXHIBIT 4.1

                      FORM OF REGISTRATION RIGHTS AGREEMENT

     REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of September 5,
2000, by and among Starbase Corporation, a Delaware corporation, with
headquarters located at 4 Hutton Center Drive, Suite 800, Santa Ana, California
92707 (the "COMPANY") and the undersigned buyers (each, a "BUYER" and
collectively, the "BUYERS").

     WHEREAS:

     A. In connection with the Securities Purchase Agreement by and among the
Company, the Buyers and dated of even date herewith (the "SECURITIES PURCHASE
AGREEMENT"), the Company has agreed, upon the terms and subject to the
conditions of the Securities Purchase Agreement, to issue and sell to the Buyers
shares (the "SHARES") of the Company's common stock, $.01 par value per share
(the "COMMON STOCK");

     B. In consideration for the Buyers purchasing the Shares, the Company shall
issue and deliver to the Buyers common stock purchase warrants (the "WARRANTS")
to purchase additional shares of Common Stock pursuant to the terms of the
Securities Purchase Agreement (the shares of Common Stock issued or issuable
upon exercise of the Warrants are hereinafter referred to as the "WARRANT
SHARES"); and

     C. To induce the Buyers to execute and deliver the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "1933 ACT"), and
applicable state securities laws;

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

     1. DEFINITIONS.

     As used in this Agreement, the following terms shall have the following
meanings:

     a. "INVESTOR" means a Buyer and any transferee or assignee thereof to whom
a Buyer assigns its rights under this Agreement and who agrees to become bound
by the provisions of this Agreement in accordance with Section 9.

     b. "PERSON" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual, an
entity, a governmental or political subdivision thereof or a governmental
agency.

     c. "REGISTER," "REGISTERED," and "REGISTRATION" refer to a registration
effected by preparing and filing one or more Registration Statements in
compliance with the 1933 Act and pursuant to Rule 415 under the 1933 Act or any
successor rule providing for offering securities on a continuous basis ("RULE
415"), and the declaration or ordering of effectiveness of such Registration
Statement(s) by the United States Securities and Exchange Commission (the
"SEC").

     d. "REGISTRABLE SECURITIES" means (i) the Shares, (ii) the Warrant Shares
issued or issuable upon exercise of the Warrants, and (iii) any shares of common
stock issued or issuable with respect to the Shares, the Warrant Shares or the
Warrants as a result of any stock split, stock dividend, recapitalization,
exchange or similar event.

                                      -1-
<PAGE>   2

     e. "REGISTRATION STATEMENT" means a registration statement of the Company
filed under the 1933 Act.

     Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Securities Purchase Agreement.

     2. REGISTRATION.

     a. Mandatory Registration. The Company shall prepare, and, on or prior to
thirty (30) days after the initial issuance date of the Shares (the "CLOSING
DATE"), file with the SEC a Registration Statement or Registration Statements
(as is necessary) on Form S-3 (or, if such form is unavailable for such a
registration, on such other form as is available for such a registration,
subject to the consent of the holders of a majority of Registrable Securities
and the provisions of Section 2(c), which consent will not be unreasonably
withheld), covering the resale of all of the Registrable Securities, which
Registration Statement(s) shall state that, in accordance with Rule 416
promulgated under the 1933 Act, such Registration Statement(s) also covers such
indeterminate number of additional shares of Common Stock as may become issuable
upon exercise of the Warrants to prevent dilution resulting from stock splits,
stock dividends or similar transactions. Such Registration Statement shall
initially register for resale at least that number of shares of Common Stock
equal to the aggregate of (i) the number of Shares and (ii) 100% of the number
of Warrant Shares issuable as of the date immediately preceding the date the
Registration Statement is initially filed with the SEC, subject to adjustment as
provided in Section 3(b). Such registered shares of Common Stock shall be
allocated among the Investors pro rata based on the total number of Registrable
Securities issued or issuable as of each date that a Registration Statement, as
amended, relating to the resale of the Registrable Securities is declared
effective by the SEC. The Company shall use its best efforts to have the
Registration Statement declared effective by the SEC within one hundred and
twenty (120) days after the Closing Date.

     b. Counsel and Investment Bankers. Subject to Section 5 hereof, in
connection with any offering pursuant to Section 2, the Buyers shall have the
right to select , at the Buyers' sole cost and expense, legal counsel and an
investment banker or bankers and manager or managers to administer their
interest in the offering, which investment banker or bankers or manager or
managers shall be reasonably satisfactory to the Company. The Company shall
reasonably cooperate with any such counsel and investment bankers.

     c. Eligibility for Form S-3. The Company represents, warrants and covenants
that it will meet the requirements for the use of Form S-3 for registration of
the sale by the Buyers and any other Investor of the Registrable Securities on
and after the thirtieth (30) day following the Closing Date and the Company has
filed and shall file all reports required to be filed by the Company with the
SEC in a timely manner so as to obtain and maintain such eligibility for the use
of Form S-3. In the event that Form S-3 is not available for sale by the
Investors of the Registrable Securities, then the Company (i) with the consent
of the holders of a majority of Registrable Securities pursuant to Section 2(a)
(which consent shall not be unreasonably withheld), shall register the sale of
the Registrable Securities on another appropriate form and not more than
forty-five (45) days after being notified that Form S-3 is not available and
(ii) the Company shall undertake to register the Registrable Securities on Form
S-3 as soon as such form is available, provided that the Company shall maintain
the effectiveness of the Registration Statement then in effect until such time
as a Registration Statement on Form S-3 covering the Registrable Securities has
been declared effective by the SEC.

     3. RELATED OBLIGATIONS.

     At such time as the Company is obligated to file a Registration Statement
with the SEC pursuant to Section 2(a), the Company will use its best efforts to
effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto, the Company shall
have the following obligations:

     a. The Company shall promptly prepare and file with the SEC a Registration
Statement with respect to the Registrable Securities (on or prior to the
thirtieth (30) day after the Closing Date and solely (unless otherwise consented
to by the holders of a majority of Registrable Securities) for the registration
of Registrable Securities pursuant to Section 2(a)) and use its best efforts to
cause such Registration Statement(s) relating to

                                      -2-
<PAGE>   3

Registrable Securities to become effective as soon as possible after such filing
(but no later than one hundred twenty (120) days after the Closing Date), and
keep the Registration Statement(s) effective pursuant to Rule 415 at all times
until the earlier of (i) the date as of which the Investors may sell all of the
Registrable Securities without restriction pursuant to Rule 144(k) promulgated
under the 1933 Act (or successor thereto) or (ii) the date on which (A) the
Investors shall have sold all the Registrable Securities and (B) none of the
Warrants is outstanding (the "REGISTRATION PERIOD"), which Registration
Statement(s) (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading. In the event that the Registration Statement is not
declared effective by the SEC within one hundred twenty (120) days after the
Closing Date, the Company will pay each Investor a penalty, in cash,
nonrefundable and in arrears for each thirty day period thereafter that the
Registration Statement has not been declared effective at a rate equal to (x)
one percent (1%) times (y) the aggregate purchase price paid on the Closing Date
by such Investor for its portion of the Shares.

     b. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the Registration
Statement(s) and the prospectus(es) used in connection with the Registration
Statement(s), which prospectus(es) are to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep the Registration
Statement(s) effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by the
Registration Statement(s) until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in the Registration
Statement(s). In the event the number of shares available under a Registration
Statement filed pursuant to this Agreement is insufficient to cover all of the
Registrable Securities, the Company shall amend the Registration Statement, or
file a new Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover all of the Registrable Securities, in each
case, as soon as practicable, but in any event within fifteen (15) days after
the necessity therefor arises (based on the market price of the Common Stock and
other relevant factors on which the Company reasonably elects to rely). In
addition any such amendment or new Registration Statement shall for purposes of
Section 3(a) above be deemed to be a "Registration Statement". For purposes of
the foregoing provisions, if applicable, the number of shares available under a
Registration Statement shall be deemed "insufficient to cover all of the
Registrable Securities" if at any time the number of shares of Common Stock
available for resale under such Registration Statement is less than the
aggregate of (i) the number of Shares held by the Investors and (ii) the number
of Warrant Shares. For purposes of the calculation set forth in the foregoing
sentence, such calculation shall assume that the Warrants are then fully
convertible into shares of Common Stock at the then prevailing Exercise Price
(as defined in the Warrants).

     c. The Company shall furnish to each Investor whose Registrable Securities
are included in the Registration Statement(s) and its legal counsel without
charge (i) promptly after the same is prepared and filed with the SEC at least
one copy of the Registration Statement and any amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits, the prospectus(es) included in such Registration
Statement(s) (including each preliminary prospectus) and, with regards to the
Registration Statement, any correspondence by or on behalf of the Company to the
SEC or the staff of the SEC and any correspondence from the SEC or the staff of
the SEC to the Company or its representatives, (ii) upon the effectiveness of
any Registration Statement, ten (10) copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may reasonably request) and (iii) such other
documents, including any preliminary prospectus, as such Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor. The Company will promptly respond to any and all
comments received from the SEC, with a view towards causing any Registration
Statement or any amendment thereto to be declared effective by the SEC as soon
as practicable and shall, subject to Section 3(h), promptly file an acceleration
request as soon as practicable, but in no event later than five (5) business
days following the resolution or clearance of all SEC comments or, if
applicable, following notification by the SEC that the Registration Statement or
any amendment thereto will not be subject to review.

     d. The Company shall its use best efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statement(s) under such other
securities or "blue sky" laws of such jurisdictions in the United States as any
Investor reasonably requests, (ii) prepare and file in those jurisdictions, such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may

                                      -3-
<PAGE>   4

be necessary to maintain the effectiveness thereof during the Registration
Period, (iii) take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period, and (iv) take all other actions reasonably necessary or advisable to
qualify the Registrable Securities for sale in such jurisdictions; provided,
however, that the Company shall not be required in connection therewith or as a
condition thereto to (x) qualify to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3(d), (y)
subject itself to general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such jurisdiction. The Company
shall promptly notify each Investor who holds Registrable Securities of the
receipt by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.

     e. As promptly as practicable after becoming aware of such event, the
Company shall notify each Investor in writing of the happening of any event as a
result of which the prospectus included in a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and promptly prepare a supplement or amendment to the Registration
Statement to correct such untrue statement or omission, and deliver ten (10)
copies of such supplement or amendment to each Investor (or such other number of
copies as such Investor may reasonably request). The Company shall also promptly
notify each Investor in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when a Registration
Statement or any post-effective amendment has become effective (notification of
such effectiveness shall be delivered to each Investor by facsimile on the same
day of such effectiveness and by overnight mail), (ii) of any request by the SEC
for amendments or supplements to a Registration Statement or related prospectus
or related information, and (iii) of the Company's reasonable determination that
a post-effective amendment to a Registration Statement would be appropriate.

     f. The Company shall use its best efforts to prevent the issuance of any
stop order or other suspension of effectiveness of a Registration Statement, or
the suspension of the qualification of any of the Registrable Securities for
sale in any jurisdiction and, if such an order or suspension is issued, to
obtain the withdrawal of such order or suspension at the earliest possible
moment and to notify each Investor who holds Registrable Securities being sold
(and, in the event of an underwritten offering, the managing underwriters) of
the issuance of such order and the resolution thereof or its receipt of actual
notice of the initiation or threat of any proceeding for such purpose.

     g. The Company shall permit each Investor and a single firm of counsel,
initially Schulte Roth & Zabel LLP or such other counsel as thereafter
designated as selling stockholders' counsel by the Investors who hold a majority
of the Registrable Securities being sold, to review and comment upon the
Registration Statement(s) and all amendments and supplements thereto at least
four (4) business days prior to their filing with the SEC, and not file any
document in a form to which such counsel reasonably objects; provided, that such
counsel delivers such comments to the Company within two (2) business days
following receipt of such Registration Statement and/or amendment or supplement.

     h. The Company shall hold in confidence and not make any disclosure of
information concerning an Investor provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this or any other agreement. The
Company agrees that it shall, upon learning that disclosure of such information
concerning an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to
such Investor and allow such Investor, at the Investor's expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.

     i. The Company shall use its best efforts either to (i) cause all the
Registrable Securities covered by a Registration Statement to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted

                                      -4-
<PAGE>   5

under the rules of such exchange, or (ii) secure designation and quotation of
all the Registrable Securities covered by the Registration Statement on the
Nasdaq National Market System for such Registrable Securities.

     j. The Company shall cooperate with the Investors who hold Registrable
Securities being offered and, to facilitate the timely preparation and delivery
of certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a Registration Statement and
enable such certificates to be in such denominations or amounts, as the case may
be, if there is no managing underwriter or underwriters, the Investors may
reasonably request and registered in such names as the managing underwriter or
underwriters, if any, or the Investors may request. Not later than the date on
which any Registration Statement registering the resale of Registrable
Securities is declared effective, the Company shall deliver to its transfer
agent instructions, accompanied by any reasonably required opinion of counsel,
that permit sales of unlegended securities in a timely fashion that complies
with then mandated securities settlement procedures for regular way market
transactions.

     k. The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investors of Registrable Securities
pursuant to a Registration Statement.

     l. The Company shall provide a CUSIP number, a transfer agent and registrar
of all such Registrable Securities not later than the effective date of such
Registration Statement.

     m. The Company shall use its best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable Securities.

     n. The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any registration
hereunder.

     4. OBLIGATIONS OF THE INVESTORS.

     a. At least seven (7) days prior to the first anticipated filing date of
the Registration Statement, the Company shall notify each Investor or its
counsel in writing of the information the Company requires from each such
Investor if such Investor elects to have any of such Investor's Registrable
Securities included in the Registration Statement. It shall be a condition
precedent to the obligations of the Company to complete the registration
pursuant to this Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company such
information as may be requested in writing by the Company regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.

     b. Each Investor by such Investor's acceptance of the Registrable
Securities agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement(s) hereunder unless such Investor has notified the Company in writing
of such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement.

     c. Each Investor agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(g) or the first
sentence of 3(f), such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement(s) covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or the first
sentence of 3(f) and, if so directed by the Company, such Investor shall deliver
to the Company (at the expense of the Company) or destroy all copies in such
Investor's possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.

                                      -5-
<PAGE>   6

     5. EXPENSES OF REGISTRATION.

     All reasonable expenses incurred in connection with registrations, filings
or qualifications pursuant to Sections 2 and 3, including, without limitation,
all registration, listing and qualifications fees, printers and accounting fees,
and fees and disbursements of counsel for the Company and fees and disbursements
of one counsel for the Investors shall be paid by the Company. In addition, the
Company shall pay all of the Investors' reasonable costs (including legal fees)
incurred in connection with the successful enforcement of the Investors' rights
hereunder.

     6. INDEMNIFICATION.

     In the event any Registrable Securities are included in a Registration
Statement under this Agreement:

     a. To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend each Investor who holds such
Registrable Securities, the directors, officers, partners, employees, agents and
each Person, if any, who controls any Investor within the meaning of the 1933
Act or the Securities Exchange Act of 1934, as amended (the "1934 ACT"), and the
directors and officers of, and each Person, if any, who controls any such
underwriter within the meaning of the 1933 Act or the 1934 Act (each, an
"INDEMNIFIED PERSON"), against any losses, claims, damages, liabilities,
judgments, fines, penalties, charges, costs, attorneys' fees, amounts paid in
settlement or expenses, joint or several (collectively, "CLAIMS"), incurred in
investigating, preparing or defending any action, claim, suit, inquiry,
proceeding, investigation or appeal taken from the foregoing by or before any
court or governmental, administrative or other regulatory agency, body or the
SEC, whether pending or threatened, whether or not an indemnified party is or
may be a party thereto ("INDEMNIFIED DAMAGES"), to which any of them may become
subject insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in a Registration
Statement or any post-effective amendment thereto or in any filing made in
connection with the qualification of the offering under the securities or other
"blue sky" laws of any jurisdiction in which Registrable Securities are offered,
or the omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which the statements therein were made, not misleading, (ii)
any untrue statement or alleged untrue statement of a material fact contained in
any preliminary prospectus if used prior to the effective date of such
Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not misleading, or
(iii) any violation or alleged violation by the Company of the 1933 Act, the
1934 Act, any other law, including, without limitation, any state securities
law, or any rule or regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement (the matters in the
foregoing clauses (i) through (iii) being, collectively, "VIOLATIONS"). Subject
to the restrictions set forth in Section 6(d) with respect to the number of
legal counsel, the Company shall reimburse the Investors and each such
controlling person, within thirty (30) days that such expenses are incurred and
are due and payable, for any legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by any Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto, if such
prospectus was timely made available by the Company pursuant to Section 3(c);
(ii) with respect to any preliminary prospectus, shall not inure to the benefit
of any such person from whom the person asserting any such Claim purchased the
Registrable Securities that are the subject thereof (or to the benefit of any
person controlling such person) if the untrue statement or omission of material
fact contained in the preliminary prospectus was corrected in the prospectus, as
then amended or supplemented, if such prospectus was timely made available by
the Company pursuant to Section 3(c), and the Indemnified Person was promptly
advised in writing not to use the incorrect prospectus prior to the use giving
rise to a Violation and such Indemnified Person, notwithstanding such advice,
used it; and (iii) shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Indemnified Person and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9.

                                      -6-
<PAGE>   7

     b. In connection with any Registration Statement in which an Investor is
participating, each such Investor agrees to severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 6(a), the Company, each of its directors, each of its officers
who signs the Registration Statement, each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (collectively and
together with an Indemnified Person, an "INDEMNIFIED PARTY"), against any Claim
or Indemnified Damages to which any of them may become subject, under the 1933
Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages
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 to the Company by such Investor
expressly for use in connection with such Registration Statement; and, subject
to Section 6(d), such Investor will reimburse any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnity agreement contained in this
Section 6(b) and the agreement with respect to contribution contained in Section
7 shall not apply to amounts paid in settlement of any Claim if such settlement
is effected without the prior written consent of such Investor, which consent
shall not be unreasonably withheld; provided, further, however, that the
Investor shall be liable under this Section 6(b) for only that amount of a Claim
or Indemnified Damages as does not exceed the net proceeds to such Investor as a
result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with respect to any
preliminary prospectus shall not inure to the benefit of any Indemnified Party
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented.

     c. The Company shall be entitled to receive indemnities from selling
brokers, dealer managers and similar securities industry professionals
participating in any distribution, to the same extent as provided above, with
respect to information such persons so furnished in writing expressly for
inclusion in the Registration Statement.

     d. Promptly after receipt by an Indemnified Person or Indemnified Party
under this Section 6 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is
to be made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right (at its expense) to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided, however, that
such indemnifying party shall diligently pursue such defense and that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses to be paid by the indemnifying party, if, in
the reasonable opinion of counsel retained by the Indemnified Person or
Indemnified Party, as the case may be, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. The Company shall pay reasonable fees for only one
separate legal counsel for the Investors, and such legal counsel shall be
selected by the Investors holding a majority in interest of the Registrable
Securities included in the Registration Statement to which the Claim relates.
The Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or claim. The indemnifying party
shall keep the Indemnified Party or Indemnified Person fully apprised at all
times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its written consent, provided,
however, that the indemnifying party shall not unreasonably withhold, delay or
condition its consent. No indemnifying party shall, without the consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties, firms
or corporations

                                      -7-
<PAGE>   8

relating to the matter for which indemnification has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

     e. The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are incurred.

     f. The indemnity agreements contained herein shall be in addition to (i)
any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

     7. CONTRIBUTION.

     To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that: (i) no
contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section
6; (ii) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (iii) contribution by any seller of
Registrable Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities.

     8. REPORTS UNDER THE 1934 ACT.

     With a view to making available to the Investors the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Investors to sell securities of the Company
to the public without registration ("RULE 144"), the Company agrees to:

     a. make and keep public information available, as those terms are
understood and defined in Rule 144;

     b. file with the SEC in a timely manner all reports and other documents
required of the Company under the 1933 Act and the 1934 Act so long as the
Company remains subject to such requirements (it being understood that nothing
herein shall limit the Company's obligations under Section 4(c) of the
Securities Purchase Agreement) and the filing of such reports and other
documents is required for the applicable provisions of Rule 144; and

     c. furnish to each Investor so long as such Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of Rule 144, the 1933 Act and
the 1934 Act, and (ii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.

     9. ASSIGNMENT OF REGISTRATION RIGHTS.

     The rights to have the Company register Registrable Securities pursuant to
this Agreement shall be automatically assignable by the Investors to any
transferee or assignee (a "TRANSFEREE") of all or any portion of Registrable
Securities if: (i) the Investor agrees in writing with the Transferee to assign
such rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment; (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a) the
name and address of such Transferee, and (b) the securities with respect to
which such registration rights are being transferred or assigned; (iii)
immediately following such transfer or assignment the further disposition of
such securities by the Transferee is restricted under the 1933 Act and
applicable state securities laws; (iv) at or before the time the

                                      -8-
<PAGE>   9

Company receives the written notice contemplated by clause (ii) of this sentence
the Transferee agrees in writing with the Company to be bound by all of the
provisions contained herein; (v) such transfer shall have been made in
accordance with the applicable requirements of the Securities Purchase
Agreement; (vi) such Transferee shall be an "accredited investor" as that term
is defined in Rule 501 of Regulation D promulgated under the 1933 Act; and (vii)
in the event the assignment occurs subsequent to the date of effectiveness of
the Registration Statement required to be filed pursuant to Section 2(a), the
Transferee agrees to pay all reasonable expenses of amending or supplementing
such Registration Statement to reflect such assignment.

     10. AMENDMENT OF REGISTRATION RIGHTS.

     Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and Investors
who hold two-thirds (2/3) of the Registrable Securities. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon each Investor
and the Company.

     11. MISCELLANEOUS.

     a. A person or entity is deemed to be a holder of Registrable Securities
whenever such person or entity owns of record such Registrable Securities. If
the Company receives conflicting instructions, notices or elections from two or
more persons or entities with respect to the same Registrable Securities, the
Company shall act upon the basis of instructions, notice or election received
from the registered owner of such Registrable Securities.

     b. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement shall be in writing and
will be deemed to have been delivered (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile if received prior to 5:00
p.m. (if a mechanically generated confirmation is generated) on a business day ;
(iii) three days after being sent by U.S. certified mail, return receipt
requested, or (iv) one day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:

                     if to the Company:

                     Starbase Corporation
                     4 Hutton Centre Drive, Suite 800
                     Santa Ana, California  92707
                     Telephone: (714) 445-4400
                     Facsimile: (714) 445-4482
                     Attention:  Douglas Norman, Vice President and
                                 Chief Financial Officer

                     and

                     Starbase Corporation
                     4 Hutton Centre Drive, Suite 800
                     Santa Ana, California  92707
                     Telephone: (714) 445-4400
                     Facsimile: (714) 445-4482
                     Attention: Patricia Howe, Esq., Corporate Counsel

                     With a copy to:

                     Parker Chapin LLP
                     The Chrysler Building
                     405 Lexington Avenue
                     Telephone: 212-704-6000
                     Facsimile: 212-704-6288
                     Attention: Christopher Auguste and Martin Weisberg

                                      -9-
<PAGE>   10

                     if to a Buyer, to its address and facsimile number on the
                     Schedule of Buyers attached hereto, with copies to such
                     Buyer's counsel as set forth on the Schedule of Buyers.

     Each party shall provide five (5) days prior notice to the other party of
any change in address, phone number or facsimile number.

     c. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

     d. This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York without regard to the principles of conflict
of laws. If any provision of this Agreement shall be invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

     e. This Agreement, the Warrants and the Securities Purchase Agreement
(including all schedules and exhibits thereto) constitute the entire agreement
among the parties hereto with respect to the subject matter hereof and thereof.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. The aforementioned documents
supersede all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof and thereof.

     f. Subject to the requirements of Section 9, this Agreement shall inure to
the benefit of and be binding upon the permitted successors and assigns of each
of the parties hereto.

     g. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

     h. This Agreement may be executed in two or more identical counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.

     i. Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                      -10-

<PAGE>   11

     IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.

COMPANY:

STARBASE CORPORATION

By:
    -------------------------------------
    Name:  Douglas S. Norman
    Title: Chief Financial Officer

BUYERS:
[INVESTOR NAME]
         BY:    [Investor Name]

         By:
             ----------------------------
         Name:  [Natural Person]
         Title: [Title]

         [Address]
         Fax:
              ---------------------------

[INVESTOR NAME]
         BY: [Investor Name]

By:
    -------------------------------
    Name:  [Natural Person]
    Title: [Title]

    [Address]
    Fax:
         --------------------------

                                        -11-
<PAGE>   12

<TABLE>
<CAPTION>
                                                SCHEDULE OF BUYERS

                                        INVESTOR ADDRESS AND                    INVESTOR'S LEGAL COUNSEL AND
      INVESTOR NAME                        FACSIMILE NUMBER                          COUNSEL'S ADDRESS
---------------------------------      ---------------------                 -----------------------------------
<S>                                    <C>                                   <C>
[Investor Name]                        [Address of Investor]                 [Name and Address of Legal Counsel]

________ shares of Common Stock

________ Warrants

[Name of Investor]                     [Address of Investor]                  [Name and Address of Legal Counsel]

________ shares of Common Stock

________ Warrants
</TABLE>

                                      -12-

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