Document:

<PAGE>   1
                                                                    EXHIBIT 10.5

                   AMENDED AND RESTATED REVOLVING CREDIT NOTE

$15,000,000                                                     October 17, 2000

         FOR VALUE RECEIVED, the undersigned, THE TRIZETTO GROUP, INC., a
Delaware corporation ("TriZetto"), CREATIVE BUSINESS SOLUTIONS, INC., a Texas
corporation ("CBS"); FINSERV HEALTH CARE SYSTEMS, INC., a New York corporation
("Finserv"); HEALTHCARE MEDIA ENTERPRISES, INC., a Delaware corporation ("HME");
HEALTHWEB, INC., a Delaware corporation ("HealthWeb"); MARGOLIS HEALTH
ENTERPRISES, INC., a California corporation ("Margolis"); NOVALIS CORPORATION, a
Delaware corporation ("Novalis"); TRIZETTO APPLICATION SERVICES, INC., a
Colorado corporation ("TriZetto Application"); HEALTHCARE MEDIA PRIVATE LIMITED,
an India company and subsidiary of HME ("HMP"); DIGITAL INSURANCE SYSTEMS
CORPORATION, an Ohio corporation ("Digital"); HEALTH NETWORKS OF AMERICA, INC.,
a Maryland corporation ("Health Networks"); NOVALIS DEVELOPMENT CORPORATION, a
Delaware corporation ("Novalis Development"); NOVALIS DEVELOPMENT & LICENSING
CORPORATION, an Indiana corporation ("Novalis Licensing"); NOVALIS SERVICES
CORPORATION, a Delaware corporation ("Novalis Services"); ERISCO, INC., a New
York corporation ("ERISCO" and collectively with TriZetto, CBS, Finserv, HME,
HealthWeb, Margolis, Novalis, TriZetto Application, HMP, Digital, Health
Networks, Novalis Development, Novalis Licensing, and Novalis Services, the
"Borrower"), jointly and severally, promise to pay, in lawful money of the
United States, to the order of HELLER HEALTHCARE FINANCE, INC., a Delaware
corporation (together with its successors and assigns, "Lender"), the principal
sum of Fifteen Million and No/100 Dollars ($15,000,000.00), or so much of such
principal sum as shall be advanced or readvanced and shall remain unpaid under
the Loan established pursuant to that certain Loan and Security Agreement dated
as of September 11, 2000 by and among the undersigned and Lender (as amended,
modified, restated or replaced from time to time, the "Loan Agreement"), plus
interest on the unpaid balance thereof, computed on a 360-day basis, at the rate
per annum that is set forth in the Loan Agreement. This Note amends, restates
and replaces in its entirety the Revolving Credit Note dated September 11, 2000
previously executed and delivered by Borrower and made payable to Lender.

         1. All capitalized terms used and not otherwise specifically defined in
this Revolving Credit Note (as amended, modified, restated or replaced from time
to time, the "Note") shall have the meanings given to them in the Loan
Agreement.

         2. This Note shall evidence the undersigned's obligation to repay all
sums advanced by Lender from time to time under the Loan Agreement and as part
of the Loan. The actual amount due and owing from time to time under this Note
shall be evidenced by Lender's records of receipts and disbursements with
respect to the Loan, which shall be conclusive evidence of that amount, absent
manifest error.

         3. Interest due pursuant to this Note shall be payable monthly, in
arrears, on the first Business Day of each month after the date of this Note
(for the previous month). For purposes of this Note, a "Business Day" shall mean
any day on which banks are open for business in Maryland, excluding Saturdays
and Sundays.

<PAGE>   2

         4. This Note shall become due and payable upon the earlier to occur of
(i) the expiration of the Term, or (ii) the occurrence of any Event of Default
under the Loan Agreement, or any other event under any other Loan Documents
which would result in this Note becoming due and payable. At such time, the
entire principal balance of this Note and all other fees, costs and expenses, if
any, shall be due and payable in full. Lender shall then have the option at any
time and from time to time to exercise all of the rights and remedies set forth
in this Note and in the other Loan Documents, as well as all rights and remedies
otherwise available to Lender at law or in equity, to collect the unpaid
indebtedness under this Note and the other Loan Documents. This Note is secured
by the Collateral, as defined in and described in the Loan Agreement.

         5. Whenever any principal and/or interest and/or fee under this Note
shall not be paid when due, whether at the stated maturity or by acceleration,
interest on such unpaid amounts shall thereafter be payable at a rate per annum
equal to five (5) percentage points above the stated rate of interest on this
Note until such amounts shall be paid.

         6. The undersigned and Lender intend to conform strictly to the
applicable usury laws in effect from time to time during the term of the Loan.
Accordingly, if any transaction contemplated by the Loan Agreement or this Note
would be usurious under such laws, then notwithstanding any other provision
hereof: (i) the aggregate of all interest that is contracted for, charged, or
received under this Note or under any other Loan Document shall not exceed the
maximum amount of interest allowed by applicable law, and any excess shall be
promptly credited to the undersigned by Lender (or, to the extent that such
consideration shall have been paid, such excess shall be promptly refunded to
the undersigned by Lender); (ii) neither the undersigned nor any other Person
(as defined in the Loan Agreement) now or hereafter liable hereunder shall be
obligated to pay the amount of such interest to the extent that it is in excess
of the maximum interest permitted by applicable law; and (iii) the effective
rate of interest shall be reduced to the Highest Lawful Rate (as defined in the
Loan Agreement). All sums paid, or agreed to be paid, to Lender for the use,
forbearance, and detention of the debt of Borrower to Lender shall, to the
extent permitted by applicable law, be allocated throughout the full term of
this Note until payment is made in full so that the actual rate of interest does
not exceed the Highest Lawful Rate in effect at any particular time during the
full term thereof. If at any time the rate of interest under this Note exceeds
the Highest Lawful Rate, the rate of interest to accrue pursuant to this Note
shall be limited, notwithstanding anything to the contrary in this Note, to the
Highest Lawful Rate, but any subsequent reductions in the Base Rate shall not
reduce the interest to accrue pursuant to this Note below the Highest Lawful
Rate until the total amount of interest accrued equals the amount of interest
that would have accrued if a varying rate per annum equal to the interest rate
under the Note had at all times been in effect. If the total amount of interest
paid or accrued pursuant to this Note under the foregoing provisions is less
than the total amount of interest that would have accrued if a varying rate per
annum equal to the interest rate under this Note had been in effect, then the
undersigned agrees to pay to Lender an amount equal to the difference between
(x) the lesser of (A) the amount of interest that would have accrued if the
Highest Lawful Rate had at all times been in effect, or (B) the amount of
interest that would have accrued if a varying rate per annum equal to the
interest rate under the Note had at all times been in effect, and (y) the amount
of interest accrued in accordance with the other provisions of this Note and the
Loan Agreement.

                                       2

<PAGE>   3

         7. This Note is the "Note" referred to in the Loan Agreement, and is
issued pursuant to the Loan Agreement. Reference is made to the Loan Agreement
for a statement of the additional rights and obligations of the undersigned and
Lender. In the event of any conflict between the terms of this Note and the
terms of the Loan Agreement, the terms of the Loan Agreement shall prevail. All
of the terms, covenants, provisions, conditions, stipulations, promises and
agreements contained in the Loan Documents to be kept, observed and/or performed
by the undersigned are made a part of this Note and are incorporated into this
Note by this reference to the same extent and with the same force and effect as
if they were fully set forth in this Note; the undersigned promises and agrees
to keep, observe and perform them or cause them to be kept, observed and
performed, strictly in accordance with the terms and provisions thereof.

         8. Each party liable on this Note in any capacity, whether as maker,
endorser, surety, guarantor or otherwise, (i) waives presentment for payment,
demand, protest and notice of presentment, notice of protest, notice of
non-payment and notice of dishonor of this debt and each and every other notice
of any kind respecting this Note and all lack of diligence or delays in
collection or enforcement hereof; (ii) agrees that Lender at any time or times,
without notice to the undersigned or its consent, may grant extensions of time,
without limit as to the number of the aggregate period of such extensions, for
the payment of any principal, interest or other sums due hereunder; (iii) to the
extent permitted by law, waives all exemptions under the laws of the State of
Maryland and/or any state or territory of the United States; (iv) to the extent
permitted by law, waives the benefit of any law or rule of law intended for its
advantage or protection as an obligor under this Note or providing for its
release or discharge from liability on this Note, in whole or in part, on
account of any facts or circumstances other than full and complete payment of
all amounts due under this Note; and (v) agrees to pay, in addition to all other
sums of money due, all cost of collection and attorney's fees, whether suit be
brought or not, if this Note is not paid in full when due, whether at the stated
maturity or by acceleration.

         9. No waiver by Lender of any one or more defaults by the undersigned
in the performance of any of its obligations under this Note shall operate or be
construed as a waiver of any future default or defaults, whether of a like or
different nature. No failure or delay on the part of Lender in exercising any
right, power or remedy under this Note (including, without limitation, the right
to declare this Note due and payable) shall operate as a waiver of such right,
power or remedy nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise of such right, power or
remedy or the exercise of any other right, power or remedy.

         10. If any term, provision, covenant or condition of this Note or the
application of any term, provision, covenant or condition of this Note to any
party or circumstance shall be found by a court of competent jurisdiction to be,
to any extent, invalid or unenforceable, then the remainder of this Note and the
application of such term, provision, covenant, or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term, provision, covenant or condition
shall be valid and enforced to the fullest extent permitted by law. Upon
determination that any such term, provision, covenant or condition is invalid,
illegal or unenforceable, Lender may, but is not obligated to, advance funds to
Borrower under this Note until Borrower and Lender amend this Note so as to
effect the original intent of the parties as closely as possible in a valid and
enforceable manner.

                                       3

<PAGE>   4

         11. No amendment, supplement or modification of this Note nor any
waiver of any provision of this Note shall be made except in writing executed by
the party against whom enforcement is sought.

         12. This Note shall be binding upon the undersigned and its successors
and assigns. Notwithstanding the foregoing, the undersigned may not assign any
of its rights or delegate any of its obligations under this Note without the
prior written consent of Lender, which may be withheld in its sole discretion.

         13. Each entity constituting Borrower shall be jointly and severally
liable for all of the obligations of Borrower under this Note.

         14. THIS NOTE IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF MARYLAND WITHOUT RESPECT TO ANY OTHERWISE APPLICABLE
CONFLICTS-OF-LAWS PRINCIPLES, BOTH AS TO INTERPRETATION AND PERFORMANCE, AND THE
PARTIES EXPRESSLY CONSENT AND AGREE TO THE NON-EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF MARYLAND AND THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF MARYLAND AND TO THE LAYING OF VENUE IN THE STATE OF MARYLAND,
WAIVING ALL CLAIMS OR DEFENSES BASED ON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE, INCONVENIENT FORUM OR THE LIKE. BORROWER HEREBY CONSENTS TO SERVICE OF
PROCESS BY MAILING A COPY OF THE SUMMONS TO BORROWER, BY CERTIFIED OR REGISTERED
MAIL, POSTAGE PREPAID, TO BORROWER'S ADDRESS SET FORTH IN SECTION 9.4 OF THE
LOAN AGREEMENT. BORROWER FURTHER WAIVES ANY CLAIM FOR CONSEQUENTIAL DAMAGES IN
RESPECT OF ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY LENDER IN GOOD FAITH.

         15. IN ANY LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ALL
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF BORROWER OR OF ITS AFFILIATES SHALL
BE DEEMED TO BE EMPLOYEES OR MANAGING AGENTS OF BORROWER FOR PURPOSES OF ALL
APPLICABLE LAW OR COURT RULES REGARDING THE PRODUCTION OF WITNESSES BY NOTICE
FOR TESTIMONY (WHETHER IN A DEPOSITION, AT TRIAL OR OTHERWISE). BORROWER AGREES
THAT LENDER'S COUNSEL IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY
OF THESE INDIVIDUALS AS IF UNDER CROSS-EXAMINATION AND THAT ANY DISCOVERY
DEPOSITION OF ANY OF THEM MAY BE USED IN THAT PROCEEDING AS IF IT WERE AN
EVIDENCE DEPOSITION. BORROWER IN ANY EVENT WILL USE ALL COMMERCIALLY REASONABLE
EFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN
THE MANNER REQUESTED BY LENDER, ALL PERSONS, DOCUMENTS (WHETHER IN TANGIBLE,
ELECTRONIC OR OTHER FORM) OR OTHER THINGS UNDER ITS CONTROL AND RELATING TO THE
DISPUTE IN ANY JURISDICTION THAT RECOGNIZES THAT (OR ANY SIMILAR) DISTINCTION.

         16. THE UNDERSIGNED HEREBY (A) COVENANTS AND AGREES NOT TO ELECT A
TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY, AND (B) WAIVES ANY RIGHT
TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST. THIS WAIVER OF

                                       4
<PAGE>   5

RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY THE UNDERSIGNED,
AND THIS WAIVER IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH
ISSUE AS TO WHICH THE RIGHT TO A JURY TRIAL WOULD OTHERWISE ACCRUE. LENDER IS
HEREBY AUTHORIZED AND REQUESTED TO SUBMIT THIS NOTE TO ANY COURT HAVING
JURISDICTION OVER THE SUBJECT MATTER AND THE PARTIES HERETO, SO AS TO SERVE AS
CONCLUSIVE EVIDENCE OF THE UNDERSIGNED'S WAIVER OF THE RIGHT TO JURY TRIAL.
FURTHER, THE UNDERSIGNED HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF
LENDER (INCLUDING LENDER'S COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO
ANY BORROWER THAT LENDER WILL NOT SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY
TRIAL PROVISION.

         17. THE UNDERSIGNED HEREBY AUTHORIZES ANY ATTORNEY ADMITTED TO PRACTICE
BEFORE ANY COURT OF RECORD IN THE UNITED STATES OR THE CLERK OF SUCH COURT TO
APPEAR ON BEHALF OF THE UNDERSIGNED IN ANY COURT IN ONE OR MORE PROCEEDINGS, OR
BEFORE ANY CLERK THEREOF OF PROTHONOTARY OR OTHER COURT OFFICIAL, AND TO CONFESS
JUDGMENT AGAINST THE UNDERSIGNED IN FAVOR OF LENDER IN THE FULL AMOUNT DUE ON
THIS NOTE (INCLUDING PRINCIPAL, ACCRUED INTEREST AND ANY AND ALL CHARGES, FEES
AND COSTS) PLUS ATTORNEYS' FEES EQUAL TO FIFTEEN PERCENT (15%) OF THE AMOUNT
DUE, PLUS COURT COSTS, ALL WITHOUT PRIOR NOTICE OR OPPORTUNITY OF BORROWER FOR
PRIOR HEARING. NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS SECTION, THE LENDER
ACKNOWLEDGES THAT ATTORNEYS' FEES ARE STATED TO BE FIFTEEN PERCENT (15%) SOLELY
FOR PURPOSES OF FIXING A SUM CERTAIN FOR WHICH JUDGEMENT CAN BE ENTERED BY
CONFESSION; AND THE LENDER AGREES THAT IN ENFORCING ANY JUDGEMENT BY CONFESSION,
LENDER SHALL NOT DEMAND, SOLELY WITH RESPECT TO ATTORNEYS' FEES INCURRED BY THE
LENDER IN CONNECTION WITH SUCH INDEBTEDNESS AFTER SUCH JUDGEMENT IS RENDERED,
ANY AMOUNTS IN EXCESS OF THE ACTUAL AMOUNT OF ATTORNEYS' FEES CHARGED OR BILLED
TO THE LENDER (WHICH ATTORNEYS' FEES SHALL BE CHARGED OR BILLED TO THE LENDER AT
THE STANDARD HOURLY RATES). THE UNDERSIGNED AGREES AND CONSENTS THAT VENUE AND
JURISDICTION SHALL BE PROPER IN THE CIRCUIT COURT OF ANY COUNTY OF THE STATE OF
MARYLAND OR OF BALTIMORE CITY, MARYLAND, OR IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND. THE UNDERSIGNED WAIVES THE BENEFIT OF ANY AND
EVERY STATUTE, ORDINANCE, OR RULE OF COURT WHICH MAY BE LAWFULLY WAIVED
CONFERRING UPON BORROWER ANY RIGHT OR PRIVILEGE OF EXEMPTION, HOMESTEAD RIGHTS,
STAY OF EXECUTION, OR SUPPLEMENTARY PROCEEDINGS, OR OTHER RELIEF FROM THE
ENFORCEMENT OR IMMEDIATE ENFORCEMENT OF A JUDGMENT OR RELATED PROCEEDINGS ON A
JUDGMENT. THE AUTHORITY AND POWER TO APPEAR FOR AND ENTER JUDGMENT AGAINST THE
UNDERSIGNED SHALL NOT BE EXHAUSTED BY ONE OR MORE EXERCISES THEREOF, OR BY ANY
IMPERFECT EXERCISE THEREOF, AND SHALL NOT BE EXTINGUISHED BY ANY JUDGMENT
ENTERED PURSUANT THERETO; SUCH AUTHORITY AND POWER MAY BE EXERCISED ON ONE OR
MORE OCCASIONS FROM TIME TO TIME, IN THE SAME OR DIFFERENT JURISDICTIONS, AS
OFTEN AS LENDER SHALL DEEM NECESSARY, CONVENIENT, OR PROPER.

                               [SIGNATURES FOLLOW]

                                       5
<PAGE>   6

         IN WITNESS WHEREOF, the undersigned have executed this Note as of the
date first above written.

                                           BORROWER:

                                           THE TRIZETTO GROUP, INC.
                                           a Delaware corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                                           CREATIVE BUSINESS SOLUTIONS, INC.
                                           a Texas corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                                           FINSERV HEALTH CARE SYSTEMS, INC.
                                           a New York corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                       6
<PAGE>   7

                                           HEALTHCARE MEDIA ENTERPRISES, INC.
                                           a Delaware corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                                           HEALTHWEB, INC.
                                           a Delaware corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                                           MARGOLIS HEALTH ENTERPRISES, INC.
                                           a California corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                                           NOVALIS CORPORATION
                                           a Delaware corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                                           TRIZETTO APPLICATION SERVICES, INC.
                                           a Colorado corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                       7
<PAGE>   8

                                           HEALTHCARE MEDIA PRIVATE LIMITED
                                           an India company and subsidiary
                                           of HME

                                           By:
                                               ---------------------------------
                                               Name:
                                               Title:

                                           DIGITAL INSURANCE SYSTEMS CORPORATION
                                           an Ohio corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                                           HEALTH NETWORKS OF AMERICA, INC.
                                           a Maryland corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                                           NOVALIS DEVELOPMENT CORPORATION
                                           a Delaware corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                                           NOVALIS DEVELOPMENT & LICENSING
                                           CORPORATION an Indiana corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

                                       8
<PAGE>   9

                                           NOVALIS SERVICES CORPORATION
                                           a Delaware corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                                           ERISCO, INC.
                                           a New York corporation

                                           By: /s/ Michael J. Sunderland
                                               ---------------------------------
                                               Name: Michael J. Sunderland
                                               Title: Chief Financial Officer/
                                                      Secretary

                                       9SECURITIES PURCHASE AGREEMENT

     This SECURITIES PURCHASE AGREEMENT, dated October 12, 2000, is by and
between Contera Corporation, a Delaware corporation (the "Company") and
eAcceleration Corp., a Delaware corporation (the "Buyer").

                                    RECITALS:

     WHEREAS, the Buyer desires to purchase 10,000 shares (the "Initial Shares")
of the common stock, par value $.001 per share (the "Common Stock"), of the
Company, and 100,000 warrants (the "Initial Warrants") to purchase Common Stock,
on the date hereof;

     WHEREAS,  the Company  desires to sell to the Buyer the Initial  Shares and
the Initial Warrants on the date hereof;

     WHEREAS, the Buyer desires to acquire the right to purchase 10,000
additional shares (the "Additional Shares", and together with the Initial
Shares, the "Shares") of Common Stock, and the right to purchase an additional
100,000 Warrants (the "Additional Warrants", and together with the Initial
Warrants, the "Warrants"), at the Buyer's sole discretion;

     WHEREAS, the Company desires to sell to the Buyer the Additional Shares and
Additional Warrants; and

     NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties and covenants herein contained, and
other good and valuable consideration, the receipt and adequacy is hereby
acknowledged, the parties hereto do hereby agree as follows:

     1.   Sale and Purchase of Shares and Warrants.

     (a) The Company hereby sells to the Buyer, and the Buyer hereby subscribes
for and purchases from the Company, (i) the Initial Shares and (ii) the Initial
Warrants on the date hereof, in accordance with the provisions of this Agreement
and applicable law. The Initial Warrants shall have an exercise price of $5.00
per share and shall have the terms of, and be evidenced by, a Warrant
certificate, the form of which is attached to this Agreement as Exhibit A.

     (b) The Buyer shall have the right on a date to be determined by the Buyer
(the "Additional Closing Date"), in the sole discretion of the Buyer, to
purchase from the Company, (i) the Additional Shares and (ii) the Additional
Warrants in accordance with the provisions of this Agreement and applicable law.
The Additional Warrants shall have an exercise price of

<PAGE>

$5.00  per  share  and  shall  have the terms of, and be evidenced by, a Warrant
certificate, the form of which is attached to this Agreement as Exhibit A.

     2.   Amount of Consideration.

     (a) In consideration for (i) the issuance of the Initial Shares and the
Initial Warrants to the Buyer by the Company pursuant to Paragraph 1(a) above
and (ii) the right to purchase the Additional Shares and Additional Warrants, as
set forth in Paragraph 1(b) above, The Buyer shall pay and deliver to the
Company an aggregate of $50,000 on the date hereof.

     (b) In consideration for the issuance of the Additional Shares and the
Additional Warrants to the Buyer by the Company on the Additional Closing Date
pursuant to Paragraph 1(b) above, the Buyer shall pay and deliver to the Company
an additional $50,000 on the Additional Closing Date.

     3. Representations, Warranties and Covenants of the Company. The Company
represents and warrants to and covenants with the Buyer as follows:

     (a) Corporate Status and Capitalization. The Company (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, (ii) has all necessary corporate power and authority to own,
operate or lease the properties and assets now owned, operated or leased by the
Company and to carry on the business of the Company, as it is now being
conducted, and (iii) is duly licensed or qualified and in good standing as a
foreign corporation authorized to do business in each jurisdiction wherein the
character of the properties owned or leased by the Company and/or the nature of
the activities conducted by the Company makes such licensing or qualification
necessary, except where the failure to be so licensed or qualified and in good
standing would not prevent the Company from performing any of its material
obligations under this Agreement and would not have a material adverse effect on
the business, operations or financial condition of the Company (a "Material
Adverse Effect");

     (b) Company Capital Structure. The authorized capital stock of the Company
consists of 3,000,000 shares of Common Stock, of which there are no more than
712,300 shares issued and outstanding as of the date of this Agreement. All
outstanding shares of Common Stock are duly authorized, validly issued, fully
paid and non-assessable and are not subject to preemptive rights created by
statute, the Certificate of Incorporation or Bylaws of the Company or any
agreement or document to which the Company is a party or by which it is bound.
Schedule 3(b) lists each outstanding option and warrant, if any, to acquire
shares of the Common Stock as of the date of this Agreement, the name of the
holder of such option or warrant, the number of shares subject to such option or
warrant, the exercise price of such option or warrant, the number of shares as
to which such option will have vested at such date and whether the
exercisability of such option or warrant will be accelerated in any way by the
transactions contemplated by this Agreement or for any other reason, and
indicate the extent of acceleration, if any.

                                      -2-
<PAGE>

     (c) Authority of Agreement. The Company has the power and authority to
accept, execute and deliver this Agreement and, to carry out its obligations
hereunder; the execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of the Company;
this Agreement, constitutes the valid and legally binding obligation of the
Company enforceable against the Company in accordance with its terms; and the
shares of Common Stock to be issued hereunder, upon issuance thereof in
accordance with the terms hereof, and the shares (each, a "Warrant Share") of
Common Stock issuable upon exercise of the Warrants, upon issuance in accordance
with the terms of the Warrants, will be validly authorized, fully paid and
non-assessable;

     (d)  Consents and Approvals; No Conflict.

         (i) The  acceptance,  execution and delivery of this Agreement by
     the Company does not, and the performance by the Company of its obligations
     hereunder, upon acceptance  by the Company (in whole or part),  will not,
     require any consent, approval,  authorization or other action by, or filing
     with or notification  to, any governmental or regulatory authority,  other
     than (A) in connection with state  securities or "blue sky" laws (the "Blue
     Sky laws") or (B) in connection with the filing with the Commission of a
     registration statement under the  Securities Act upon the due exercise of
     the rights  granted  the Buyer  pursuant  to  Section 6 of this  Agreement,
     except where failure to obtain such consent,  approval,  authorization  or
     action,  or to make such filing or notification,  would not  prevent  the
     Company  from  performing  any  of  its  material  obligations  under  this
     Agreement and would not have a Material Adverse Effect; and

         (ii) The acceptance,  execution, delivery and performance of this
     Agreement by the Company and the other  agreements  and  documents  to be
     executed, delivered and performed by the Company  pursuant  hereto and the
     consummation  of the  transactions  contemplated  hereby and thereby by the
     Company do not and will not conflict with, violate or result in a breach or
     termination of any provision  of, or constitute a default under (or event
     which with the giving of notice or lapse of time,  or both,  would become a
     default under) the Certificate of Incorporation  or By-laws of the Company
     or, except as would not prevent the Company  from  performing  any of its
     material obligations under this Subscription Agreement and would not have a
     Material Adverse Effect, any law, rule, regulation,  order, writ, judgment,
     injunction, decree, determination  or award  applicable to the Company or
     give to  others any rights of termination,  amendment, acceleration  or
     cancellation of, or result in the creation of any lien or  encumbrance  on
     any of the assets or properties of the Company pursuant to, any note, bond,
     mortgage, indenture, contract, agreement, lease, license, permit, franchise
     or other instrument relating to such assets or properties  to which the
     Company is a party or by which any of such assets or properties is bound;

     (e) Absence of Litigation. No claim, action, proceeding or investigation is
pending which seeks to delay or prevent the consummation of the transactions
contemplated hereby or which

                                      -3-
<PAGE>

would be reasonably likely to adversely affect the Company's ability to
consummate the transactions contemplated hereby or which would have a Material
Adverse Effect;

     (f) Taxes. The Company (i) has filed or will file all federal, state and
local tax returns required to be filed or sent or has obtained extensions
thereof; (ii) has timely paid or made provision for all taxes shown as due and
payable on its tax returns required to be filed prior to the date hereof and all
assessments received by the Company; and (iii) will timely pay all taxes that
will be shown as due and payable on its tax returns required to be filed after
the date hereof, except to the extent that the Company is or shall be contesting
such taxes and assessments in good faith by appropriate proceedings;

     (g) Extent of Offering by the Company. Subject in part to the truth and
accuracy of the Company's representations set forth in Section 4(d)-(j) of this
Agreement and the compliance by all agents of the Company with Rule 503(c) of
Regulation D ("Regulation D") promulgated under the Securities Act of 1933, as
amended (the "Securities Act"), the offer, sale and issuance of the Shares and
Warrants, as contemplated by this Agreement, are exempt from the registration
requirements of the Securities Act and are exempt or the Company has complied
with registration requirements of each state's Blue Sky laws where the Shares
and Warrants are offered or sold, and the Company will not intentionally take,
or intentionally not take, any action hereafter that would cause the loss of
such exemption or registration;

     (h) Financial Statements. The balance sheets of December 31, 1998 and 1999
and the related statements of operations, changes in stockholders' equity and
cash flows, each for each of the two years then ended (the "Financial
Statements"), as included as Schedule 3(h) hereto, are correct and complete and
fairly present the financial position of the Company as of the dates thereof and
the results of operations of the Company for the periods covered thereby.

     (i) Absence of Undisclosed Liabilities. The Company has no material
liabilities or obligations, absolute or contingent (individually or in the
aggregate), except (x) as set forth in the Financial Statements or otherwise on
Schedule 3(h) or (y) as incurred in the ordinary course of business after the
date of the Audited Financial Statements;

     (j) Intellectual Property Rights. Except as set forth in Schedule 3(j), the
Company has sufficient trademarks, trade names, patent rights, copyrights and
licenses to conduct its business as contemplated therein; and to the Company's
knowledge, neither the Company nor its products is infringing or will infringe
any trademark, trade name, patent right, copyright, license, trade secret or
other similar right of others currently in existence; and there is no claim
being made against the Company regarding any trademark, trade name, patent,
copyright, license, trade secret or other intellectual property right which
could have a Material Adverse Effect;

     (k) Material Contracts. All material contracts of the Company are set forth
in Schedule 3(k). Except as expressly set forth in Schedule 3(k), the agreements
to which the Company is a party described therein are valid agreements, in full
force and effect; the Company is not in material

                                      -4-
<PAGE>

breach or material default (with or without notice or lapse of time, or
both) under any of such agreements; and, to the Company's knowledge, the other
contracting party(ies) thereto are not in material breach or material default
(with or without notice or lapse of time, or both) under any of such agreements;

     (l) Title to Assets. Except as set forth in Schedule 3(l), the Company has
good and marketable title to all properties and material assets described
therein as owned by it, free and clear of any pledge, lien, security interest,
encumbrance, claim or equitable interest other than such as are not material to
the business of the Company;

     (m) Subsidiaries. The Company does not presently own or control, directly
or indirectly, any interest in any other corporation, partnership, association
or other business entity, except as set forth in Schedule 3(m); and

     (n) Required Governmental Permits. The Company is in possession of and
operating in compliance with all authorizations, licenses, certificates,
consents, orders and permits from state, federal and other regulatory
authorities which are material to the conduct of its business, all of which are
valid and in full force and effect.

     4. Representations, Warranties and Covenants of the Buyer. The Buyer hereby
represents, warrants and acknowledges to and covenants and agrees with the
Company as follows:

     (a) Status. The Buyer is a corporation, validly existing and in good
standing under the laws of the State of Delaware with full power and authority
to execute, deliver and perform its obligations hereunder; and,

     (b) Authority for Agreements. The Buyer has the power and authority to
execute and deliver this Agreement and to carry out its obligations hereunder;
and the execution, delivery and performance by the Buyer of this Agreement and
the consummation of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of the Buyer and this Agreement
constitutes the valid and legally binding obligation of the Buyer, enforceable
against the Buyer in accordance with its terms;

     (c) Consents and Approvals, No Conflicts.

         (i) The execution and delivery of this  Agreement by the Buyer do
     not, and the performance by the Buyer's of its  obligations  hereunder will
     not, require any consent, approval, authorization or other action by, or
     filing with or notification to, any  governmental or regulatory  authority,
     except where failure to obtain such  consent, approval, authorization  or
     action, or to make such filing or notification, would not prevent the Buyer
     from performing any of its material obligations under this Agreement; and

                                      -5-
<PAGE>

         (ii) The execution, delivery and performance of this Agreement by
     the Buyer and the other agreements and documents to be executed, delivered
     and  performed by the Buyer  pursuant  hereto and the consummation of the
     transactions  contemplated  hereby and thereby by the Buyer do not and will
     not conflict with, violate or result in a breach or termination  of any
     provision of, or constitute a default under (or event which with the giving
     of notice or lapse of time, or both, would  become a default  under)  the
     Certificate of  Incorporation or By-laws of the Buyer, or, except as would
     not prevent the Buyer from performing any of its material obligations under
     this  Agreement  and  would  not  have a material adverse effect on the
     business,  operations or financial  condition of the Buyer,  any law, rule,
     regulation, order, writ, judgment, injunction,  decree,  determination or
     award  applicable to the Buyer or give to others any rights of termination,
     amendment, acceleration or  cancellation of, or result in the creation of
     any lien or  encumbrance  on any of the assets or properties  of the Buyer
     pursuant to, any note,  bond,  mortgage,  indenture, contract, agreement,
     lease,  license,  permit,  franchise or other instrument relating to such
     assets or  properties to which the Buyer is a party or by which any of such
     assets or properties is bound;

     (d) Investment Intent. The Buyer is acquiring the Shares and the Warrants,
and will acquire the and the shares of Common Stock issuable upon exercise of
such Warrants (the "Warrant Shares"), for the Buyer's own account, for
investment only and not with a view to, or for sale in connection with, a
distribution thereof or any part thereof, within the meaning of the Securities
Act, and the rules and regulations promulgated thereunder, or any applicable
state Blue Sky laws;

     (e) Investor Status. The Buyer is an accredited investor as such term is
defined under Regulation D promulgated pursuant to the Securities Act
("Regulation D") and all of the representations and warranties of the Buyer set
forth herein are correct and complete as of the date of this Agreement and as of
the Additional Closing Date; and, if there should by any material change in such
information prior to the Additional Closing Date, the Buyer will immediately
furnish such revised or corrected information to the Company;

     (f) Intent to Transfer. The Buyer is not a party or subject to or bound by
any contract, undertaking, agreement or arrangement with any person to sell,
transfer or pledge the Shares, Warrants and/or Warrant Shares or any part
thereof to any person, and has no present intention to enter into such a
contract, undertaking, agreement or arrangement;

     (g) Sale Exempt from Registration; Company's Reliance.

         (i) The Company  has  advised the Buyer that  neither the Shares,
     Warrants and/or Warrant Shares have been  registered  under the Securities
     Act or under the laws of any state on the basis that the  issuance  thereof
     is exempt from such registration; and

         (ii) The Company's reliance on the availability of such exemption
     is, in part, based  upon the  accuracy  and  truthfulness  of the  Buyer's
     representations contained herein;

                                      -6-
<PAGE>

     (h) Securities  to be  Issued  Without  Registration;  No  Resale  Without
Registration. The Buyer acknowledges, understands, covenants and agrees that:

         (i) The  Shares,  Warrants  and  the  Warrant  Shares  have  not  been
registered under the Securities Act or any applicable state Blue Sky laws;

         (ii) As a result of such lack of  registration,  the Shares,  Warrants
and  Warrant Shares may not be resold or  otherwise  transferred  or  disposed
without  registration pursuant to or an exemption therefrom available under the
Securities Act and such state Blue Sky laws;

     (iii) In  furtherance  of the  provisions of this Section 3(h),  all of the
certificate(s) representing the Shares, Warrants and Warrant Shares shall bear
the restrictive legends substantially in the following forms:

     If on the certificate(s) representing the Shares and/or Warrant Shares:

               "THE   SHARES   OF   COMMON    STOCK    REPRESENTED    BY    THIS
          CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
          AS AMENDED.  THESE SHARES HAVE BEEN ACQUIRED FOR  INVESTMENT  PURPOSES
          AND NOT WITH A VIEW TO  DISTRIBUTION  OR RESALE,  AND MAY NOT BE SOLD,
          ASSIGNED,  PLEDGED,  HYPOTHECATED OR OTHERWISE  TRANSFERRED WITHOUT AN
          EFFECTIVE  REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES
          ACT OF 1933, AS AMENDED,  AND APPLICABLE  STATE  SECURITIES LAWS OR AN
          OPINION OF COUNSEL  SATISFACTORY  TO THE ISSUER OF THESE SHARES TO THE
          EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND SUCH STATE
          SECURITIES LAWS;"

     If on the certificate(s) representing the Warrants:

               "THE   WARRANTS   REPRESENTED   BY   THIS   CERTIFICATE  HAVE NOT
          BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE
          WARRANTS  HAVE BEEN  ACQUIRED FOR  INVESTMENT  PURPOSES AND NOT WITH A
          VIEW  TO  DISTRIBUTION  OR  RESALE,  AND MAY  NOT BE  SOLD,  ASSIGNED,
          PLEDGED,  HYPOTHECATED OR OTHERWISE  TRANSFERRED  WITHOUT AN EFFECTIVE
          REGISTRATION  STATEMENT FOR SUCH WARRANTS  UNDER THE SECURITIES ACT OF
          1933, AS AMENDED,  AND APPLICABLE  STATE SECURITIES LAWS OR AN OPINION
          OF COUNSEL  SATISFACTORY TO THE ISSUER OF THESE WARRANTS TO THE EFFECT
          THAT  REGISTRATION  IS NOT  REQUIRED  UNDER  SUCH ACT AND  SUCH  STATE
          SECURITIES LAWS;"

                                      -7-
<PAGE>

     (i) Sophistication of the Buyer. The Buyer has evaluated the merits and
risks of purchasing the Shares and the Warrants and has such knowledge and
experience in financial and business matters that the Buyer is capable of
evaluating the merits and risks of such purchase, is aware of and has considered
the financial risks and financial hazards of purchasing the Shares and the
Warrants, and is able to bear the economic risk of purchasing the Shares and the
Warrants, including the possibility of a complete loss with respect thereto; and

     (j) Access to Information. The Buyer has had access to such information
regarding the business and finances of the Company, the Shares and the Warrants
and has been provided the opportunity to discuss with the Company's management
the business, affairs and financial condition of the Company and such other
matters with respect to the Company as would concern a reasonable person
considering the transactions contemplated by this Agreement and/or concerned
with the operation of the Company including, without limitation, pursuant to a
meeting and/or discussions with management of the Company;

5. Anti-Dilution Rights.

     (a) Consents on Future Securities Issuances. The Company shall not issue
any shares of Common Stock, preferred stock or any options, warrants or other
securities of the Company that upon exercise or conversion would give any
present or future security holders thereof any rights to obtain any additional
shares of Common Stock that would total, when aggregated with all issued
securities of the Company on a fully diluted basis, more than one million shares
of Common Stock, without the prior written consent of the Buyer.

     (b) Adjustments of Exercise Price, Number and Character of Warrant Shares,
and Number of Warrants. The exercise price and the number and kind of securities
purchasable upon the exercise of each of the Warrants shall be subject to
adjustment from time to time upon the happening of the events enumerated in
Section 3 of the certificate evidencing the Warrants, a form of which is
attached to this Agreement as Exhibit A.

                                      -8-

<PAGE>

6.   Registration Rights.

     (a) Defined Terms. As used in this Section 6, terms defined elsewhere
herein shall have their assigned meanings and each of the following terms shall
have the following meanings (such definitions to be applicable to both the
plural and singular of the terms defined):

          (i) Registerable Securities.  The term "Registerable  Securities"
     shall mean any of the Shares and Warrant  Shares, including  any shares of
     Common Stock or other securities received in  connection  with any stock
     split,   stock   dividend,   merger,   reorganization,  recapitalization,
     reclassification  or other distribution  payable or issuable upon shares of
     Common Stock. For the purposes of this Agreement, securities will cease to
     be Registerable  Securities when (A) a registration statement  under the
     Securities  Act covering  such  Registerable  Securities  has been declared
     effective and such Registerable Securities have been disposed of pursuant
     to such effective registration statement, (B) such Registerable Securities
     are distributed to the public pursuant to the Securities Act or pursuant to
     an exemption from the registration requirements  of the  Securities  Act,
     including,  but not limited to,  Rules 144 and 144A  promulgated  under the
     Securities  Act, or (C) such Registerable  Securities  have been otherwise
     transferred  and  the  Company, in  accordance  with  applicable  law  and
     regulations, has delivered new certificates or other evidences of ownership
     for such  securities  which are not subject to any stop  transfer  order or
     other restriction on transfer.

          (ii) Rightsholders.  The term  "Rightsholders"  shall include the
     Buyer,  all successors and assigns of the Buyer, and all  transferees of
     Registerable Securities  where such  transfer  affirmatively  includes the
     transfer and assignment of the rights of the transferor  Rightsholder under
     this Agreement with respect to the transferred  Registerable  Securities;
     provided, however, the term "Rightsholders" shall not include any person or
     entity  who has sold, transferred or assigned  all of such  person's  or
     entity's Registerable Securities.

          (iii) The words  "hereof,"  "herein" and "hereunder" and words of
     similar import when used in this Section 6 shall refer to this Section 6 as
     a  whole  and  not to any  particular  provision of this Section 6, and
     subsection, paragraph, clause, schedule and exhibit references are to this
     Section 6 unless otherwise specified.

     (b)  Demand Registration.

          (i) Right to Demand.  Subject to Section 6(b)(ii) hereof,  at any
     time on or after the date (the "Registration  Right Exercise  Commencement
     Date") which is twelve months following the date on which a  registration
     statement filed by the Company with the Securities and Exchange  Commission
     (the "Commission") under the Securities Exchange Act of 1934, as amended
     (the "Exchange  Act"), with  respect to the Common  Stock is  declared or
     deemed effective under the Exchange Act, the Initiating Holders (as defined
     in paragraph 6(b)(vi) below) may make a written  request (each, a "Demand
     Request") to the Company for  registration  under the Securities Act of all
     or part of their Registerable Securities (each, a

                                      -9-
<PAGE>

     "Demand  Registration"). Within ten days after receipt of a Demand Request,
     the  Company  shall deliver a written notice (the "Notice") of such Demand
     Request to all other Rightsholders.  The Company  will include in such
     Demand  Registration  all Registerable Securities with respect to which the
     Company has been given written requests (each, a "Tag-Along Request") for
     inclusion therein within twenty days after the giving of the Notice.  Each
     and every Demand  Request shall be required to specify the aggregate amount
     of the  Registerable Securities  to be included in such Demand Registration
     by the  Initiating Holders, the amount of Registerable Securities to be
     registered for each of the Initiating Holders and the intended method(s)
     of disposition  thereof, including whether or not such Demand  Registration
     or portion thereof is to relate   to  an   underwritten   offering,   the
     name  of  the   managing underwriter(s),  if any, and the terms of any such
     underwriting.  Each and  every  Tag-Along  Request  shall be  required  to
     specify  the  amount  of Registerable Securities to be registered in the
     Demand Registration and the intended  method(s) of disposition  thereof,
     including  whether or not the Registerable  Securities  subject  to such
     Tag-Along  Request  or  portion thereof is to relate to an underwritten
     offering, the name of the managing underwriter(s), if any, and the terms of
     any such underwriting.

          (ii)  Number of Demand  Registrations;  Expenses.  Subject to the
     provisions of  Section  6(b)(iii) hereof, the  holders  of  Registerable
     Securities shall be entitled, in the aggregate, to one Demand Registration,
     the  Registration Expenses (as defined in Section  6(e) hereof) of which,
     subject to the  provisions of Section 6(e),  shall be borne by the Company,
     but the Company shall  not  be  responsible   for  the  payment  of  any
     underwriter's discount, commission or selling concession in connection with
     any of the Registerable Securities. The Company shall not be deemed to have
     effected a Demand Registration unless and until such Demand Registration is
     declared effective.

          (iii)     Priority on Demand Registrations.

                    (A)  Whenever   the  Company   shall  effect  a  Demand
          Registration in connection  with an  underwritten  offering by one or
          more  Initiating  Holders, no other  securities,   including  other
          Registerable Securities shall be included in such Demand Registration,
          unless (1) the  managing underwriter(s)  with  respect to such Demand
          Registration shall have advised the Company and each Initiating Holder
          whose Registerable Securities were included in the Demand Request, in
          writing, that the inclusion  of such  other  securities  would  not
          adversely affect such  underwritten  offering  or (2) the  Initiating
          Holders shall each have  consented in writing to the inclusion of such
          other securities.  In the event of such written advice of the managing
          underwriter(s) or unanimous  consent by the Initiating  Holders, the
          Company will  include in such Demand Registration securities of the
          Company in the following order of priority until the maximum number of
          securities  included in the written   advice  of  the   managing
          underwriter(s) or unanimous  consent of such Initiating  Holders shall
          be reached: (1) first, pro rata (based upon the amount of Registerable
          Securities) among the Registerable Securities included in the Demand

                                      -10-
<PAGE>

          Request which are subject to the underwritten offering, (2) second,
          pro rata (based upon the amount of Registerable Securities) among the
          Registerable  Securities of the other holders (each, a "Rightsholder")
          of  registration  rights granted by the Company in connection with the
          sale of the Warrants who have given a Tag-Along  Request with respect
          to such Demand Registration where the method of distribution  shall be
          pursuant to an underwritten offering, (3) third, pro rata (based upon
          the amount of Registerable  Securities) among all other Registerable
          Securities  included in the Demand  Request and Tag- Along  Request(s)
          and (4) fourth,  pro rata (based upon the amount of  securities owned
          which carry registration rights) among all other securities to which
          the Company has granted  registration  rights and for which a request
          for inclusion in the Demand Registration shall have been made.

               (B)  Whenever   the  Company   shall  effect  a  Demand
          Registration in connection with an offering of Registerable Securities
          of Initiating Holders for which the intended method(s) of distribution
          shall not  include an underwritten offering, and the  holders of a
          majority of the Registerable  Securities  which were  subject to the
          Demand Request shall advise the  Company in  writing  that,  in the
          opinion of such Initiating Holders, the number of securities proposed
          to be sold in such Demand Registration would adversely  affect such
          offering, the Company will  include  in  such  Demand  Registration
          securities in the following order of priority until the maximum number
          of  securities  included in the written advice  of such  Initiating
          Holders shall be reached: (1) first, pro rata (based upon the amount
          of Registerable Securities) among the Registerable Securities included
          in the Demand Request, (2) second, pro rata (based upon the amount of
          Registerable Securities) among the Registerable  Securities  of the
          Rightsholders who have given a Tag-Along Request with respect to such
          Demand Registration where the method of distribution shall be pursuant
          to an  underwritten offering, (3) third, pro rata  (based  upon the
          amount  of Registerable Securities)  among  all  other  Registerable
          Securities included in the Demand Request and Tag-Along Request(s) and
          (4) fourth, pro rata (based upon the amount of securities owned which
          carry  registration  rights) among all other securities to which the
          Company has granted registration rights and for which a request for
          inclusion in the Demand Registration shall have been made.

               (C) In the  event  that  Initiating  Holders  and other
          Rightsholders who have given a Tag-Along  Request are unable to have
          registered  the full  amount of Registerable Securities which they
          requested to be registered  pursuant to a Demand  Request or Tag-Along
          Request,  pursuant  to the  provisions of this Section 6(b), such
          Initiating Holders and other  Rightsholders shall retain the right to
          one Demand Registration with respect to such unregistered Registerable
          Securities subject to such Demand Request and Tag-Along Request.

          (iv)  Delay in  Effecting  Demand  Registration.  Notwithstanding
     anything  in the  foregoing  to the  contrary,  the  Company  shall  not be
     obligated to effect a Demand

                                      -11-
<PAGE>

     Registration at any time when the Company, in the good faith  judgment  of
     its Board of  Directors  made no later than 30 days after the giving of
     the Demand  Request  with  respect to such  Demand Registration, reasonably
     believes  that the  filing  thereof  at the time  requested,  or the
     offering  of  securities  pursuant  thereto,  would  be detrimental  to
     the  interests  of  Company  or  its   stockholders.   The  effectuation
     of a Demand Registration cannot be suspended,  pursuant to the provisions
     of the preceding sentence,  for more than 60 days after the date of the
     Board's determination referenced in the preceding sentence.

          (v)  Approval  of  Underwriter  by the  Company.  If  the  Demand
     Registration is to  involve  an  underwritten   offering,   the  managing
     underwriter(s) and each  selling  agent  selected  by those  Rightsholders
     participating  in each such  underwritten  offering shall be subject to the
     written approval of the Company, which approval may not be  unreasonably
     withheld.

          (vi)  "Initiating   Holders"   Defined.   For  purposes  of  this
     Subscription Agreement,  the term "Initiating  Holders" shall mean, on any
     given date, those Rightsholders holding Registerable  Securities  and/or
     Warrants  which, if duly exercised in accordance  with their terms,  would
     result in the issuance of Warrant Shares that would be deemed  Registerable
     Securities under Subsection 6(a)(i), which would aggregate 50% or more of
     the total Registerable Securities and Warrants that would be outstanding on
     such date.

     (c)  Piggy-Back Registration.

          (i) If at any time,  the Company  proposes to file a registration
     statement  under the Securities Act with respect to an offering by the
     Company or any other party of any class of equity  security  similar to any
     Registerable Securities (other than a registration statement on Form S-4 or
     S-8 or any successor form or a  registration  statement  filed  solely in
     connection with an exchange offer, a business combination transaction or an
     offering of securities solely to the existing  stockholders or employees of
     the Company), then the Company, on each such occasion, shall give written
     notice (each, a "Company Piggy-Back Notice") of such proposed filing to all
     of the Rightsholders owning Registerable Securities at least 30 days before
     the anticipated filing date of such  registration statement,  and  such
     Company  Piggy-Back  Notice  also shall be required to offer to such
     Rightsholders   the  opportunity to register  such  aggregate  number  of
     Registerable  Securities as each such  Rightsholder may request.  Each such
     Rightsholder shall have  the  right, exercisable  for  the  twenty  days
     immediately  following  the giving of the  Company  Piggy-Back  Notice,  to
     request, by written notice (each, a "Holder  Notice") to the Company,  the
     inclusion  of all or any  portion of the  Registerable  Securities  of such
     Rightsholders in such registration statement.  The Company shall use its
     best   efforts  to  cause  the  managing   underwriter(s)   of  a  proposed
     underwritten offering to permit the inclusion  of  the   Registerable
     Securities  which were the  subject  of  all  Holder   Notices  in  such
     underwritten offering on the same  terms and  conditions  as any  similar
     securities of the Company included therein. Notwithstanding anything to the
     contrary contained in this Section 6(c)(i), if the managing  underwriter(s)
     of such underwritten offering  (or, in the case of an offering  not being
     underwritten,  the Company)  delivers a written opinion (or, in the

                                      -12-
<PAGE>

     case of the Company, a resolution of its Board of Directors certified by
     the President or Secretary of the Company) to the Rightsholders of
     Registerable Securities which were the  subject of all  Holder Notices that
     the total amount and kind of securities  which they, the Company and any
     other person intend to include in such offering is such as to materially
     and adversely affect the success of such  offering,  then the amount of
     securities to be offered for the accounts of such  Rightsholders  and
     persons other than the Company  shall be  eliminated  or reduced  pro rata
     (based on the amount of securities  owned by such  Rightsholders  and other
     persons  which  carry registration  rights) to the extent necessary to
     reduce the total amount of securities  to be included in such  offering to
     the amount  recommended  by such  managing  underwriter(s) in its written
     opinion  (or the  Board of Directors in its resolution).

          (ii)   Number  of   Piggy-Back   Registrations;   Expenses.   The
     obligations of the Company under this Section 6(c) shall be unlimited with
     respect to each Rightsholder.  Subject to the provisions of Section 6(e)
     hereof,  the Company will pay all Registration  Expenses in connection with
     any  registration of Registerable  Securities  effected  pursuant to this
     Section 6(c), but the Company shall not be  responsible  for the payment of
     any underwriter's discount, commission or selling concession in connection
     therewith.

     (d)  Registration Procedures.

          (i)  Obligations of the Company.  The Company will, in connection
     with  any  registration  pursuant  to  Section  6(b)  or  (c)  hereof, as
     expeditiously as possible:

               (A) prepare and file with the Commission a registration
          statement under the Securities Act on any  appropriate  form chosen by
          the Company, in its sole discretion, which shall be available for the
          sale of all Registerable Securities in accordance  with the intended
          method(s) of distribution  thereof set forth in all applicable  Demand
          Requests, Tag-Along Requests and  Holder  Notices,   and  use  its
          commercially  reasonable best efforts  to  cause  such  registration
          statement  to  become  effective  as  soon  thereafter  as  reasonably
          practicable.  After such filing, the Company shall,  as diligently as
          practicable, provide to each such Rightsholder such number of copies
          of such registration statement, each amendment and supplement thereto,
          the prospectus included in such registration statement (including each
          preliminary prospectus), all exhibits thereto  and   documents
          incorporated  by  reference  therein and such other  documents as such
          Rightsholder may reasonably request in  order  to  facilitate  the
          disposition of the Registerable  Securities owned by such Rightsholder
          and included in such registration statement.  The  obligation of the
          Company to effect such  registration and/or  cause such  registration
          statement to become effective, may be postponed for (1) such period of
          time when the financial statements of the  Company  required  to be
          included in such registration  statement are not available (due solely
          to the fact that such financial statements  have not been prepared in
          the regular  course of business of the  Company) or (2) any other bona
          fide  corporate purpose, but then only for a period not to exceed 60
          days;

                                      -13-
<PAGE>

               (B)   prepare  and  file  with  the   Commission   such
          amendments and post-effective amendments to a registration  statement
          as may be necessary to keep such registration  statement effective for
          up to nine months; and cause the related prospectus to be supplemented
          by any required prospectus supplement, and as so supplemented to be
          filed to the extent required  pursuant to Rule 424  promulgated  under
          the  Securities Act, during such  nine-month  period;  and otherwise
          comply with the  provisions of the  Securities Act with respect to the
          disposition of  all Registerable   Securities   covered   by  such
          registration statement during the applicable period in accordance with
          the intended method(s) of disposition of such Registerable Securities
          set forth in such registration statement,  prospectus or supplement to
          such prospectus;

               (C)  notify  the   Rightsholders   whose   Registerable
          Securities are included in such registration  statement  and  the
          managing underwriter(s), if any, of an underwritten offering of any of
          the Registerable  Securities included in such registration  statement,
          and  confirm such advice in writing, (1) when a  prospectus  or any
          prospectus supplement or post-effective amendment has been filed, and,
          with respect to  a  registration  statement or any  post-effective
          amendment,  when the same has become effective, (2) of any request by
          the  Commission  for  amendments  or  supplements to a  registration
          statement or related prospectus or for additional information,  (3) of
          the  issuance  by the Commission of any stop order suspending  the
          effectiveness  of a  registration  statement or the  initiation of any
          proceedings for that purpose, (4) if at any time the  representations
          and  warranties of the Company  contemplated  by clause (1) of Section
          6(d)(i)(J) hereof cease to be true and correct, (5) of the receipt by
          the Company of any notification  with respect to the suspension of the
          qualification  of any of the  Registerable Securities for sale in any
          jurisdiction  or the  initiation or  threatening of any proceeding for
          such  purpose and (6) of the happening of any event which makes any
          statement made in the registration statement, the prospectus or any
          document  incorporated  therein by reference untrue or which requires
          the making of any changes in the registration statement or prospectus
          so  that  such   registration statement, prospectus   or  document
          incorporated  by  reference  will not contain any untrue statement of
          material fact or omit to state any material fact required to be stated
          therein or necessary to make the statements therein not misleading;

               (D) make reasonable efforts to obtain the withdrawal of
          any order suspending the effectiveness of such registration statement
          at the  earliest  possible  moment and to prevent the entry of such an
          order;

               (E) use  reasonable  efforts to register or qualify the
          Registerable Securities included in such registration statement under
          such other securities or Blue Sky laws of such jurisdictions  as any
          Rightsholder whose Registerable  Securities are included  in  such
          registration  statement  reasonably requests in writing and do any and
          all other acts and things which may be necessary  or  advisable  to
          enable  such  Rightsholder  to

                                      -14-
<PAGE>

          consummate  the  disposition  in  such jurisdictions of such
          Registerable  Securities; provided, that the Company  will not be
          required to (1) qualify  generally to do business in any  jurisdiction
          where it would  not  otherwise be required to qualify  but for  this
          Section  6(d)(i)(E), (2) subject  itself to  taxation in any such
          jurisdiction  or (3) take any action which would subject it to general
          service of process in any such jurisdiction;

               (F) make available for inspection by each  Rightsholder
          whose Registerable  Securities are included in such registration, any
          underwriter(s)  participating in any disposition pursuant to such
          registration statement, and any representative,  agent or employee of
          or attorney or accountant  retained  by any  such  Rightsholder  or
          underwriter(s) (collectively,  the  "Inspectors"),  all financial and
          other records, pertinent  corporate  documents and properties of the
          Company (collectively, the "Records") as shall be reasonably necessary
          to enable  them to exercise their due diligence responsibility  (or
          establish a due diligence defense), and cause the officers, directors
          and  employees  of the  Company to supply all information reasonably
          requested by any such Inspector in connection with such  registration
          statement; provided, that records which the Company  determines,  in
          good faith, to be confidential  and which it notifies the Inspectors
          are confidential shall not be disclosed by the Inspectors, unless (1)
          the release of such Records is ordered pursuant to a subpoena or other
          order from a court of competent jurisdiction or (2) the disclosure of
          such Records is required by any  applicable law or regulation or any
          governmental  regulatory body with jurisdiction over such Rightsholder
          or  underwriter(s); provided, further, that such  Rightsholder  or
          underwriter(s)  agree that such Rightsholder or  underwriter(s)  will,
          upon  learning the  disclosure of such Records is sought in a court of
          competent jurisdiction, give notice to the Company  and allow the
          Company, at the Company's expense, to undertake appropriate action to
          prevent disclosure of the Records deemed confidential;

               (G) cooperate with the Rightsholder  whose Registerable
          Securities are included  in  such  registration  statement  and  the
          managing underwriter(s),  if any, to facilitate the timely preparation
          and delivery of certificates representing  Registerable Securities to
          be sold thereunder, not bearing any restrictive  legends, and enable
          such  Registerable   Securities to be in such denominations  and
          registered  in  such  names  as such Rightsholder  or  any  managing
          underwriter(s) may reasonably request at least two business days prior
          to any sale of Registerable Securities;

               (H) comply with all applicable rules and regulations of
          the Commission and promptly make generally available to its security
          holders an earnings statement covering  a period of twelve  months
          commencing,  (1) in an underwritten offering, at the end of any fiscal
          quarter in which  Registerable Securities are sold to underwriter(s),
          or (2) in a  non-underwritten offering, with the first  month of the
          Company's  first fiscal quarter  beginning after the effective date of
          such registration

                                      -15-
<PAGE>

          statement, which earnings  statement in each case shall satisfy the
          provisions of Section 11(a) of the Securities Act;

               (I)  provide  a  CUSIP  number  for  all   Registerable
          Securities not later than the  effective  date of the registration
          statement  relating  to the  first  public  offering of Registerable
          Securities of the Company pursuant hereto;

               (J) enter into such customary agreements  (including an
          underwriting agreement in customary  form) and take all such  other
          actions reasonably requested by the Rightsholders  holding a majority
          of the Registerable Securities included in such registration statement
          or the managing underwriter(s) in order to expedite and facilitate the
          disposition of such Registerable Securities and in such  connection,
          whether or not an underwriting  agreement is entered into and whether
          or not the registration is an underwritten registration, (1) make such
          representations  and warranties, if any, to the  holders  of  such
          Registerable  Securities and any  underwriter(s)  with respect to the
          registration statement, prospectus  and  documents  incorporated  by
          reference,  if any, in form,  substance  and scope as are  customarily
          made by issuers  to  underwriter(s) in underwritten  offerings  and
          confirm the same if and when requested, (2) obtain opinions of counsel
          to the Company and updates thereof addressed to each such Rightsholder
          and the  underwriter(s), if any, with respect  to the  registration
          statement, prospectus and documents incorporated by reference, if any,
          covering  the matters customarily  covered in opinions  requested  in
          underwritten  offerings and such other  matters as may be  reasonably
          requested by such Rightsholders and underwriter(s), (3) obtain a "cold
          comfort"  letter and updates  thereof from the Company's independent
          certified public  accountants  addressed to such  Rightsholders and to
          the  underwriter(s), if any, which letters shall be in customary form
          and cover matters of the type customarily  covered in "cold comfort"
          letters by accountants in connection with underwritten offerings, and
          (4) deliver  such  documents  and  certificates as may be reasonably
          requested by the Rightsholders holding a majority of such Registerable
          Securities and managing underwriter(s), if any, to evidence compliance
          with any customary conditions contained in the underwriting agreement
          or other  agreement entered into by the Company; each such action
          required  by this Section  6(d)(i)(J)  shall be done at each  closing
          under such  underwriting or similar  agreement or as and to the extent
          required thereunder; and

               (K) if  requested  by the  holders of a majority of the
          Registerable Securities included in such registration statement, use
          its best efforts to cause all Registerable Securities which  are
          included in such  registration  statement  to be  listed,  subject to
          notice of issuance, by the date of the first sale of such Registerable
          Securities pursuant to such registration statement, on each securities
          exchange, if any, on which  securities  similar  to the  Registered
          Securities are listed.

                                      -16-
<PAGE>

          (ii)  Obligations  of  Rightsholders.   In  connection  with  any
     registration  of  Registerable Securities of a  Rightsholder  pursuant to
     Section 6(b) or (c) hereof:

               (A) The  Company  may  require  that each  Rightsholder
          whose Registerable Securities are included  in  such  registration
          statement  furnish  to the Company such  information  regarding  the
          distribution of such Registerable Securities and such Rightsholder as
          the Company may from time to time reasonably request in writing; and

               (B) Each Rightsholder,  upon receipt of any notice from
          the Company of the happening  of any event of the kind described  in
          clauses (2), (3), (5) and (6) of Section  6(d)(i)(C) hereof,  shall
          forthwith discontinue disposition of Registerable Securities pursuant
          to the registration statement  covering such Registerable  Securities
          until such Rightsholder's receipt of the copies of the supplemented or
          amended  prospectus  contemplated by clause (1) of Section  6(d)(i)(C)
          hereof, or until such  Rightsholder is  advised  in  writing  (the
          "Advice") by the Company that the use of the applicable prospectus may
          be resumed, and until such  Rightsholder has received  copies of any
          additional or supplemental filings which are incorporated by reference
          in or to be attached to or included with such prospectus, and, if so
          directed by the Company, such Rightsholder will deliver to the Company
          (at the expense of the Company) all copies,  other than permanent file
          copies then in the  possession  of such Rightsholder,  of the current
          prospectus  covering such Registerable Securities  at the  time  of
          receipt of such  notice; the  Company  shall have the right to demand
          that such  Rightsholder or other holder  verify its agreement to the
          provisions  of this Section  6(d)(ii)(B) in any Demand  Request,
          Tag-Along  Request or  Holder  Notice  of  the  Rightsholder  or in a
          separate document executed by the Rightsholder.

     (e) Registration Expenses. All expenses incident to the performance of or
compliance with this Agreement by the Company, including, without imitation, all
registration and filing fees of the Commission, National Association of
Securities Dealers, Inc. and other agencies, fees and expenses of compliance
with federal securities or Blue Sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registerable Securities), rating agency fees, printing expenses, messenger and
delivery expenses, internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the fees and expenses incurred in connection with the
listing, if any, of the Registerable Securities on any securities exchange and
fees and disbursements of counsel for the Company and the Company's independent
certified public accountants (including the expenses of any special audit or
"cold comfort" letters required by or incidental to such performance),
Securities Act or other liability insurance (if the Company elects to obtain
such insurance), the fees and expenses of any special experts retained by the
Company in connection with such registration and the fees and expenses of any
other person retained by the Company (but not including any underwriting
discounts or commissions attributable to the sale of Registerable Securities or
other out-of-pocket expenses of the Rightsholders, or the agents who act on
their behalf, unless

                                      -17-
<PAGE>

reimbursement is specifically approved by the Company) will be borne by the
Company. All such expenses are herein referred to as "Registration Expenses."
Notwithstanding the foregoing, the Company shall not be required to pay for any
Registration Expenses of any Demand Registration if such Demand Request is
subsequently withdrawn at the request of the holders of a majority of the
Registerable Securities included in such Demand Registration (in which case all
Rightsholders which requested the withdrawal of the Demand Registration shall
bear such expenses pro rata); provided that, if, at the time of such withdrawal,
such Rightsholders have learned of a material adverse change in the condition,
business or prospects of the Company from that known to such Rightsholders at
the time of their Demand Request, such Rightsholders shall not be required to
pay any of such expenses. In either event, if such Rightsholders pay in full the
expenses of such withdrawn Demand Registration, such Rightsholders shall retain
the right to one Demand Registration.

     (f) Indemnification: Contribution.

          (i)  Indemnification  by  the  Company.  The  Company  agrees  to
     indemnify and hold harmless,  to the full extent  permitted by law,  each
     Rightsholder, its officers and directors and each person who controls such
     Rightsholder (within the meaning of the Securities Act), if any, and any
     agent thereof against all losses, claims, damages, liabilities and expenses
     incurred by such party pursuant to any actual or threatened  suit,  action,
     proceeding  or  investigation (including  reasonable  attorney's  fees and
     expenses  of investigation) arising  out of or based  upon any  untrue or
     alleged untrue  statement of a material fact contained in any  registration
     statement, prospectus or preliminary prospectus or any omission or alleged
     omission to state therein a material fact required to be stated  therein or
     necessary to make the statements therein (in the case of a prospectus,  in
     the light of the circumstances under which they were made) not misleading,
     except  insofar as the same arise out of or are based upon, any such untrue
     statement or omission  based  upon information  with  respect  to  such
     Rightsholder  furnished  in writing to the  Company  by such  Rightsholder
     expressly for use therein.

          (ii)  Indemnification  by  Rightsholder.  In connection  with any
     registration statement in which a Rightsholder is participating, each such
     Rightsholder will be required to furnish to the  Company in writing  such
     information with respect to such Rightsholder as the Company  reasonably
     requests  for use in  connection  with any such  registration  statement or
     prospectus, and each Rightsholder agrees to the extent it is such a holder
     of Registerable Securities included in such registration  statement,  and
     each  other  such  holder of  Registerable  Securities  included  in  such
     Registration Statement will be required to agree, to indemnify, to the full
     extent  permitted by law, the Company, the directors  and officers of the
     Company and each person who controls the Company (within the meaning of the
     Securities Act) and any agent thereof, against any losses, claims, damages,
     liabilities and expenses (including reasonable attorney's fees and expenses
     of investigation) incurred  by  such  party  pursuant  to any  actual  or
     threatened suit,  action,  proceeding or  investigation  arising out of or
     based upon any untrue or alleged untrue statement of a material fact or any
     omission or alleged omission of a material  fact  necessary,  to make the
     statements  therein  (in the case of a  prospectus,  in

                                      -18-
<PAGE>

     the  light  of the circumstances under which they are made) not misleading,
     to the extent, but only to the extent, that such untrue statement  or
     omission is based upon information  relating to such  Rightsholder or other
     holder  furnished in writing to the Company expressly for use therein.

          (iii)  Conduct of  Indemnification  Proceedings.  Promptly  after
     receipt by an  indemnified  party under this Section 6(f) of written notice
     of the commencement of any action, proceeding,  suit or  investigation or
     threat thereof made in writing for which such  indemnified  party may claim
     indemnification   or  contribution  pursuant to  this  Agreement,   such
     indemnified  party shall notify in writing the indemnifying  party of such
     commencement or threat;  but the  omission so to notify the  indemnifying
     party shall not relieve the indemnifying party from any liability which the
     indemnifying party may have to any indemnified party (A) hereunder, unless
     the indemnifying  party is actually prejudiced  thereby, or (B) otherwise
     than under this Section 6(f).  In case any such action, suit or proceeding
     shall be brought against any indemnified  party, and the indemnified  party
     shall  notify the indemnifying party of the  commencement  thereof,  the
     indemnifying party shall  be  entitled  to  participate  therein  and the
     indemnifying   party shall  assume  the  defense  thereof,   with  counsel
     reasonably satisfactory to the indemnified party, and the obligation to pay
     all expenses relating thereto.  The indemnified party shall have the right
     to employ  separate counsel in any such action, suit or proceeding and to
     participate  in the  defense  thereof,  but the fees and  expenses  of such
     counsel shall be at the expense of such indemnified  party unless (A) the
     indemnifying  party  has  agreed  to pay such  fees and  expenses,  (B) the
     indemnifying party shall have failed to assume the defense of such action,
     suit or proceeding or to employ counsel  reasonably  satisfactory  to the
     indemnified  party therein or to pay all expenses  relating  thereto or (C)
     the named parties to any such action or proceeding (including any impleaded
     parties) include both the indemnified party and the indemnifying party and
     the indemnified  party shall have been advised by counsel that there may be
     one or more legal defenses available to the  indemnified  party which are
     different from or additional to those available to the indemnifying  party
     and which may result in a conflict between the indemnifying  party and such
     indemnified  party (in which case, if the indemnified party notifies the
     indemnifying party in writing that the indemnified  party elects to employ
     separate counsel at the expense of the indemnifying party, the indemnifying
     party  shall not have the right to assume  the  defense  of such  action or
     proceeding on  behalf of the indemnified party; it being  understood,
     however, that the indemnifying party shall not, in connection with any one
     such action, suit or proceeding or separate but substantially  similar or
     related actions,  suits or proceedings in the same jurisdiction arising out
     of the same general  allegations or  circumstances, be liable for the fees
     and  expenses of more than one  separate  firm of attorneys at any time for
     the  indemnified  party, which firm shall be designated in writing by the
     indemnified party).

          (iv) Contribution.  If the  indemnification  provided for in this
     Section 6(f) from the  indemnifying party is unavailable to an indemnified
     party hereunder in respect of any losses, claims, damages, liabilities or
     expenses  referred  to therein,  then the  indemnifying  party,  in

                                      -19-
<PAGE>

     lieu of indemnifying such indemnified party, shall contribute to the amount
     paid or payable  by such  indemnified  party as a result  of such  losses,
     claims, damages,  liabilities or expenses (A) in such  proportion as is
     appropriate  to reflect the relative benefits received by the indemnifying
     party on the one hand and the  indemnified  party on the other or (B) if
     the  allocation provided by clause (A) above is not  permitted by
     applicable  law, in such proportion  as is  appropriate  to reflect not
     only the  relative  benefits received  by the  indemnifying  party on the
     one  hand and the  indemnified party on the other but also the relative
     fault of the  indemnifying  party and   indemnified   party,   as  well  as
     any  other  relevant   equitable considerations.  The  relative  fault of
     such  indemnifying  party  and the indemnified  parties shall be determined
     by  reference  to,  among other  things,  whether any action in  question,
     including  any untrue or alleged untrue  statement  of a material  fact or
     omission  or alleged  omission to state a material fact, has been made by,
     or relates to information supplied  by,  such  indemnifying  party or
     indemnified  parties,  and the  parties' relative  intent,  knowledge,
     access to  information  and  opportunity  to correct or prevent such
     action.  The amount paid or payable by a party as a result of the losses,
     claims, damages. liabilities and expenses referred to above shall be deemed
     to include,  subject to the  limitation  set forth in Section  6(f)(v)
     hereof,  any legal or other fees or  expenses  reasonably incurred by such
     party in connection with any investigation or proceeding.

          The parties  hereto agree that it would not be just and equitable
     if contribution  pursuant to this Section  6(f)(iv) were determined by pro
     rata  allocation or by any other method of  allocation  which does not take
     into account the equitable  considerations referred to in clauses (A) and
     (B) of the immediately preceding paragraph.  No person guilty of fraudulent
     misrepresentation (within the meaning of Section  11(f) of the  Securities
     Act) shall be entitled to contribution from any person who was not guilty
     of such fraudulent misrepresentation.

          (v)  Limitation.  Anything  to the  contrary  contained  in  this
     Section 6(f) or in Section 6(g) notwithstanding,  no holder of Registerable
     Securities shall be liable for indemnification and contribution  payments
     aggregating  an amount in excess of the  maximum amount  received  by such
     holder  in  connection  with  any sale of Registerable   Securities  as
     contemplated herein.

     (g) Participation in Underwritten Registration. No Rightsholder may
participate in any underwritten registration hereunder unless such Rightsholder
(i) agrees to sell such holder's securities on the basis provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and to comply with Regulation M under the Exchange Act and
(ii) completes and executes all questionnaires, appropriate and limited powers
of attorney, escrow agreements, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangement;
provided, that all such documents shall be consistent with the provisions of
Section 6(e) hereof.

                                      -20-
<PAGE>

     8. Conduct of Business. During the period from the date of this Agreement
until such time that the Buyer no longer holds at least five percent (5%) of the
outstanding Common Stock (such percentage to include the Buyer's right to
acquire shares of Common Stock through the exercise or conversion of any
derivative securities, including warrants, whether or not presently exercisable
or convertible), or until the Additional Closing Date, whichever is later, the
Company shall continue to carry on its business diligently and in accordance
with good commercial practice and to carry on its business in the usual, regular
and ordinary course, in substantially the same manner as heretofore conducted,
to pay its debts and taxes when due subject to good faith disputes over such
debts or taxes, to pay or perform other material obligations when due, and use
its commercially reasonable efforts consistent with past practices and policies
to preserve intact its present business organization, keep available the
services of its present officers and employees and preserve its relationships
with customers, suppliers, distributors, licensors, licensees, and others with
which it has business dealings. In furtherance of the foregoing and subject to
applicable law, the Company agrees to confer with the Buyer, as promptly as
practicable, prior to taking any material actions or making any material
management decisions with respect to the conduct of business. In addition,
without the prior written consent of the Buyer, not to be unreasonably withheld
or delayed, the Company shall not:

          (a) Transfer or license to any person or entity or otherwise extend,
amend or modify in any  material  respect any rights to  intellectual  property,
other than in the ordinary course of business;

          (b) Acquire or agree to acquire by merging or consolidating  with, or
by purchasing any equity interest in or a material  portion of the assets of, or
by any other  manner, any business or any  corporation, partnership  interest,
association or other business  organization  or division  thereof, or otherwise
acquire or agree to acquire any assets which are material, individually or in
the aggregate, to the business of the Company, or enter into any joint venture,
strategic partnership or alliance, other than in the ordinary course of business
consistent with past practice; or

          (c)  Sell,  lease,  license,  encumber  or  otherwise  dispose  of any
properties or assets which are material, individually  or in the aggregate,  to
the business of the  Company,  except  in the  ordinary  course  of  business
consistent with past practice.

     9. Further Assurances. At any time and from time to time after the date
hereof, the Buyer shall, without further consideration, execute and deliver to
the Company, or such other party as the Company may direct, such other
instruments or documents and shall take such other actions as the Company may
reasonably request to carry out the transactions contemplated by this Agreement.

     10. Indemnification. The Buyer acknowledges that the Buyer understands the
meaning and legal consequences of the representations, warranties, covenants and
agreements contained herein, and the Buyer hereby agrees to indemnify and hold
harmless the Company, and the Company's directors, officers, employees, agents
and controlling persons, from and against any and all loss, damage or

                                      -21-
<PAGE>

liability due to or arising out of a breach by the Buyer of any such
representations, warranties, covenants and agreements contained herein.

     11. Miscellaneous. The Company and the Buyer may waive compliance by the
other with any of the provisions of this Agreement. No waiver of any provision
hereof shall be construed as a waiver of any other provision. Any waiver must be
in writing. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. This Agreement constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and may be amended only by a
writing executed both parties hereto. The Distribution Agreement by and between
the Company and the Buyer, dated as of March 24, 1999 is unaffected by this
Agreement. This Agreement may be executed in counterparts, each of which shall
be deemed an original, and all of which shall constitute one and the same
instrument. This Agreement shall be governed in all respects, including
validity, interpretation and effect, by the laws of the State of Washington,
without regard to its conflicts of laws principles. In connection with any legal
suit, action or proceeding arising hereunder, the parties consent to the
jurisdiction of the Court, County of Kitsap, and the United States District
Court for the Western District of Washington. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the successors and
assigns of the parties hereto. This Agreement shall not be assignable by either
party without the prior written consent of the other. The rights and obligations
contained in this Agreement are solely for the benefit of the parties hereto and
are not intended to benefit or be enforceable by any other party, under the
third party beneficiary doctrine or otherwise.

                                      -22-

<PAGE>

     IN WITNESS WHEREOF, the Company and the Buyer have caused this Agreement to
be signed by themselves or their duly authorized respective officers, all as of
the date first written above.

                              CONTERA CORPORATION

                              By:    /s/ Linda A. Rodger
                                  ----------------------------------
                                  Name:  Linda A. Rodger
                                  Title: President

                              EACCELERATION CORP.

                              By:    /s/ Clint Ballard
                                  ----------------------------------
                                  Name:  Clint Ballard
                                  Title: CEO

<PAGE>

                                    EXHIBIT A

     NEITHER THE WARRANTS  REPRESENTED BY THIS WARRANT  CERTIFICATE NOR THE
     SHARES OF COMMON STOCK OR ANY OTHER  SECURITIES ISSUABLE UPON EXERCISE
     OF  SUCH WARRANTS HAVE BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF
     1933, AS AMENDED.  SUCH WARRANTS HAVE BEEN ACQUIRED, AND ANY SHARES OF
     COMMON STOCK OR ANY OTHER SECURITIES ISSUABLE  UPON  EXERCISE  OF SUCH
     WARRANTS  ARE REQUIRED TO BE  ACQUIRED,  FOR  INVESTMENT  PURPOSES AND
     NOT WITH A VIEW TO DISTRIBUTION  OR  RESALE,  AND  MAY  NOT  BE  SOLD,
     ASSIGNED, PLEDGED, HYPOTHECATED  OR OTHERWISE  TRANSFERRED  WITHOUT AN
     EFFECTIVE  REGISTRATION STATEMENT FOR SUCH WARRANTS AND/OR SUCH SHARES
     OR OTHER SECURITIES  UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
     APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY
     TO THE ISSUER  OF SUCH WARRANTS AND SUCH SHARES OR OTHER SECURITIES TO
     THE  EFFECT THAT  REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND SUCH
     STATE SECURITIES LAWS.

                    VOID AFTER 5:00 P.M. ON OCTOBER 11, 2020

                               CONTERA CORPORATION
                               WARRANT CERTIFICATE

                     100,000 COMMON STOCK PURCHASE WARRANTS

                                                             Frederick, Maryland
Warrant Certificate No. A-1                               As of October 12, 2000

          THIS IS TO CERTIFY THAT, for value received, eAcceleration Corp., or
registered assigns (the "Warrantholder")  permitted by the terms of this Warrant
Certificate,  is the  registered  owner of the number of Common  Stock  Purchase
Warrants (each, a "Warrant") set forth above,  each Warrant  entitling the owner
thereof to  purchase  from  Contera  Corporation,  a Delaware  corporation  (the
"Company"), at any time on or prior to 5:00 P.M., New York City time, on October
11, 2020 (the "Expiration  Time"),  one duly authorized,  validly issued,  fully
paid and nonassessable  share (each, a "Warrant Share") of the common stock, par
value $.001 per share ("Common Stock"),  of the Company,  at a purchase price of
$5.00 per share (the "Exercise Price"),  all subject to the terms and conditions
contained herein. The number of Warrants  evidenced by this Warrant  Certificate
(and the number and kind of  securities  which may be  purchased  upon  exercise
hereof) set forth above,  and the Exercise Price per share set forth above,  are
as of the date hereof.

                                      A-1
<PAGE>

          As provided  herein,  the  Exercise  Price and the number of shares of
Common Stock or other securities which may be purchased upon the exercise of the
Warrants  evidenced  by this  Warrant  Certificate  are,  upon the  happening of
certain events, subject to modification and adjustment.

     If any term,  condition or provision of this Warrant  Certificate  shall be
declared, to any extent, invalid or unenforceable,  including but not limited to
the length of time until the Expiration Time the ("Term"),  the remainder of the
Warrant Certificate, other than the term, condition or provision held invalid or
unenforceable,  shall not be affected  thereby and shall be  considered  in full
force and  effect  and  shall be valid and be  enforced  to the  fullest  extent
permitted  by law. It is the  intention of the parties that if the Term is for a
length of time which is not permitted by applicable law, or in any way construed
to be invalid, a court of competent jurisdiction shall construe and interpret or
reform  this  Warrant  Certificate  to provide  for a Term  having  the  maximum
enforceable time period.

          This Warrant  Certificate,  together  with any warrant  certificate(s)
issued in replacement or substitution hereof (as provided for herein) evidencing
all or  part  of the  Warrants  evidenced  hereby,  are  sometimes  collectively
referred to herein as the "Warrant Certificates."

          The rights of the registered holder of this Warrant  Certificate shall
be subject to the following further terms and conditions:

1.   EXERCISE OF WARRANTS.

          (a) The Warrants may be exercised, in whole or in part, on or prior to
the Expiration Time by surrendering this Warrant Certificate,  with the purchase
form  provided  for  herein  duly  executed  by  the  Warrantholder  or  by  the
Warrantholder's  duly authorized  attorney- in-fact,  at the principal office of
the Company,  presently  located at 6953  Linganore  Road,  Frederick,  Maryland
21701, or at such other office or agency in the United States as the Company may
designate  by notice in  writing to the  Warrantholder  (in  either  event,  the
"Company Offices"),  accompanied by payment in full, either in the form of cash,
bank cashier's check or certified check payable to the order of the Company,  of
the Exercise Price payable in respect of the Warrants being exercised; provided,
however,  that the shares of Common  Stock  must,  at the time of  exercise,  be
listed or admitted for trading on a national securities  exchange,  or quoted on
The Nasdaq Stock Market or the Over-The-Counter Bulletin Board maintained by the
National  Association  of  Securities  Dealers,  Inc.  If fewer  than all of the
Warrants are  exercised,  the Company  shall,  upon each  exercise  prior to the
Expiration  Time,  execute  and  deliver  to  the  Warrantholder  a new  Warrant
Certificate (dated as of the date hereof) evidencing the balance of the Warrants
that remain exercisable.

          (b) Notwithstanding Section 1(a) above, the Warrants may be exercised,
in whole or in part, on a "cashless"  basis, by stating in the attached exercise
purchase  form  provided  herein  such  intention  and the  maximum  number (the
"Maximum  Number")  of shares  of Common  Stock  the  Warrantholder  desires  to
purchase (and lose the right to purchase) in  consideration  of  cancellation of
Warrants in payment for such exercise.  The number of shares of Common Stock

                                      A-2
<PAGE>

the  Warrantholder  shall  receive  upon   such   exercise   shall   equal   the
difference between the Maximum Number and the quotient that is obtained when the
product of the Maximum Number and the then current  Exercise Price is divided by
the then Current Market Price per share (as hereinafter defined).

          (c)  On the  date  of  exercise  of the  Warrants,  the  Warrantholder
exercising  same  shall be deemed to have  become  the  holder of record for all
purposes of the Warrant Shares to which the exercise relates.

          (d) As soon as practicable,  but not in excess of ten days,  after the
exercise of all or part of the Warrants  evidenced by this Warrant  Certificate,
the Company, at its expense (including the payment by it of any applicable issue
taxes),  will  cause  to  be  issued  in  the  name  of  and  delivered  to  the
Warrantholder  a  certificate  or  certificates  evidencing  the  number of duly
authorized, validly issued, fully paid and nonassessable Warrant Shares to which
the Warrantholder shall be entitled upon such exercise.

          (e) No certificates for fractional Warrant Shares shall be issued upon
the exercise of any of the Warrants  but, in lieu  thereof,  the Company  shall,
upon exercise of all the Warrants,  round up any fractional Warrant Share to the
nearest whole share of Common Stock.

2.   ISSUANCE OF COMMON STOCK; RESERVATION OF SHARES.

          (a) The Company covenants and agrees that all Warrant Shares which may
be issued upon the exercise of all or part of the Warrants  will,  upon issuance
in  accordance  with  the  terms  hereof,  be  validly  issued,  fully  paid and
nonassessable  and free from all taxes,  liens and charges  with  respect to the
issue thereof.

          (b) The  Company  further  covenants  and agrees that if any shares of
Common Stock to be reserved  for the purpose of the  issuance of Warrant  Shares
upon the exercise of Warrants  require  registration  with,  or approval of, any
governmental  authority under any federal or state law before such shares may be
validly issued or delivered  upon  exercise,  then the Company will promptly use
its best efforts to effect such  registration  or obtain such  approval,  as the
case may be.

3.   ADJUSTMENTS OF EXERCISE PRICE, NUMBER AND CHARACTER OF WARRANT SHARES, AND
     NUMBER OF WARRANTS.

          The Exercise  Price and the number and kind of securities  purchasable
upon the exercise of each Warrant  shall be subject to  adjustment  from time to
time upon the happening of the events enumerated in this Section 3.

          (a)  Stock  Dividends,  Subdivisions  and  Combinations.  In  case the
Company shall at any time on or before the Expiration Time:

                                      A-3
<PAGE>

                    (i) pay a dividend in shares of Common  Stock or other stock
     of the  Company or make a  distribution  in shares of Common  Stock or such
     other stock to holders of all its outstanding shares of Common Stock;

                    (ii) subdivide  or  reclassify  the  outstanding  shares  of
     Common Stock into a greater number of shares;

                    (iii) combine the outstanding shares of  Common Stock into a
     smaller number of shares of Common Stock; or

                    (iv) issue by reclassification of its shares of Common Stock
     other  securities of the Company  (including any such  reclassification  in
     connection  with a  consolidation  or merger in which  the  Company  is the
     continuing corporation),

then the number and kind of Warrant  Shares  purchasable  upon  exercise of each
Warrant  outstanding  immediately  prior  thereto  shall be adjusted so that the
Warrantholder  shall be  entitled  to  receive  the kind and number of shares of
Common Stock or other  securities of the Company which the  Warrantholder  would
have owned or have been  entitled to receive  after the  happening of any of the
events described above had such Warrant been exercised in full immediately prior
to the  earlier of the  happening  of such  event or any record  date in respect
thereto.  In the  event  of any  adjustment  of the  number  of  Warrant  Shares
purchasable upon the exercise of each then outstanding Warrants pursuant to this
Paragraph 3(a), the Exercise Price shall be adjusted to be the amount  resulting
from dividing the number of shares of Common Stock (including  fractional shares
of Common Stock) covered by such Warrant  immediately after such adjustment into
the total amount payable upon exercise of such Warrant in full immediately prior
to such  adjustment.  An adjustment  made pursuant to this  Paragraph 3(a) shall
become effective  immediately after the effective date of such event retroactive
to  the  record  date  for  any  such  event.  Such  adjustment  shall  be  made
successively whenever any event listed above shall occur.

          (b) Extraordinary  Dividends. In case the Company shall at any time on
or before the  Expiration  Time fix a record  date for the  issuance  of rights,
options,  or warrants to all holders of its outstanding  shares of Common Stock,
entitling them (for a period  expiring within 45 days after such record date) to
subscribe for or purchase shares of Common Stock (or securities exchangeable for
or convertible into shares of Common Stock) at a price per share of Common Stock
(or having an  exchange  or  conversion  price per share of Common  Stock,  with
respect to a security  exchangeable  for or  convertible  into  shares of Common
Stock)  which is lower than the current  Market  Price per share of Common Stock
(as defined in  Paragraph  3(g) below) on such record  date,  then the  Exercise
Price shall be adjusted by multiplying the Exercise Price in effect  immediately
prior to such record date by a fraction, of which (i) the numerator shall be the
number of shares of Common Stock outstanding on such record date plus the number
of shares of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so to be offered (or the aggregate initial exchange or
conversion price of the exchangeable or convertible securities so to be offered)
would  purchase at such current Market Price and (ii) the  denominator  shall be
the number of shares of Common  Stock  outstanding  on

                                      A-4
<PAGE>

such  record  date  plus  the  number of additional shares of Common Stock to be
offered  for  subscription  or  purchase  (or into  which  the  exchangeable  or
convertible   securities  so  to  be  offered  are  initially   exchangeable  or
convertible). Such adjustment shall become effective at the close of business on
such  record  date;  however,  to the  extent  that  shares of Common  Stock (or
securities  exchangeable for or convertible into shares of Common Stock) are not
delivered  after the  expiration  of such  rights,  options,  or  warrants,  the
Exercise Price shall be readjusted (but only with respect to Warrants  exercised
after such  expiration)  to the Exercise Price which would then be in effect had
the adjustments made upon the issuance of such rights, options, or warrants been
made upon the basis of delivery of only the number of shares of Common Stock (or
securities exchangeable for or convertible into shares of Common Stock) actually
issued.  In case any subscription  price may be paid in a consideration  part or
all of which shall be in a form other than cash, the value of such consideration
shall be as  determined  in good faith by the Board of  Directors of the Company
and shall be described  in a statement  mailed to the  Warrantholder.  Shares of
Common Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation.

          (c) Extraordinary Distributions. In case the Company shall at any time
after the original date of issuance of the Warrants distribute to all holders of
its shares of Common Stock (including any such  distribution  made in connection
with  a  consolidation   or  merger  in  which  the  Company  is  the  surviving
corporation)  evidences of its indebtedness or assets  (excluding cash dividends
and  distributions  payable out of consolidated  net income or earned surplus in
accordance with Delaware law and dividends or distributions payable in shares of
stock  described in  Paragraph  3(a) above) or rights,  options,  or warrants or
exchangeable or convertible  securities containing the right to subscribe for or
purchase shares of Common Stock (or securities  exchangeable  for or convertible
into  shares of Common  Stock),  then the  Exercise  Price  shall be adjusted by
multiplying  the Exercise Price in effect  immediately  prior to the record date
for such  distribution  by a fraction,  of which (i) the numerator  shall be the
current Market Price per share of Common Stock (as defined in Paragraph 3(h)) on
such record  date,  less the fair market  value (as  determined  by the Board of
Directors of the Company, whose determination shall be conclusive, and described
in a  notice  to  the  Warrantholders)  of  the  portion  of  the  evidences  of
indebtedness  or assets  so to be  distributed  or of such  rights,  options  or
warrants  applicable to one share of Common Stock and (ii) the denominator shall
be such current Market Price per share of Common Stock. Such adjustment shall be
made whenever any such  distribution is made, and shall become  effective on the
date of distribution retroactive to the record date for such transaction.

          (d)  Issuances  of Shares of Common Stock at less than Market Price or
Exercise  Price.  In  case  the  Company  shall  at any  time on or  before  the
Expiration Date issue shares of its Common Stock (excluding shares issued in any
of the  transactions  described  in  Paragraph  3(a),  (b) or (c)  above)  for a
consideration  per share less than (i) the current  Market Price on the date the
Company  fixes the  offering  price  per share of Common  Stock or (ii) the then
current  Exercise  Price in effect  immediately  prior to the  issuance  of such
shares, the Exercise Price shall be adjusted immediately thereafter so that such
adjusted  Exercise  Price shall equal the price  determined by  multiplying  the
Exercise Price in effect immediately prior thereto by a fraction,  the numerator
of which  shall be the sum of the number of shares of Common  Stock

                                      A-5
<PAGE>

outstanding  immediately  prior  to  the  issuance of such additional shares and
the number of shares of Common Stock which the aggregate  consideration received
(determined  as  provided  in  Paragraph  3(g)  below) for the  issuance of such
additional  shares  would  purchase at such  current  Market  Price per share of
Common Stock or the then current  Exercise Price,  whichever is higher,  and the
denominator  of which shall be the number of shares of Common Stock  outstanding
immediately after the issuance of such additional shares.  Such adjustment shall
be made successively whenever such an issuance is made.

          (e) Issuances of  Derivative  Securities at less than the Market Price
or Exercise  Price.  In case the Company shall issue any securities  convertible
into or  exchangeable  for its  Common  Stock  (excluding  securities  issued in
transactions described in Paragraphs 3(a), (b) or (c) above) for a consideration
per share of Common Stock initially  deliverable  upon conversion or exchange of
such  securities  (determined as provided in Paragraph 3(g) below) less than (i)
the current Market Price on the date the Company issues such  securities or (ii)
the then current Exercise Price in effect  immediately  prior to the issuance of
such securities,  the Exercise Price shall be adjusted immediately thereafter so
that it shall equal the price  determined by  multiplying  the Exercise Price in
effect immediately prior thereto by a fraction,  the numerator of which shall be
the sum of the number of shares of Common Stock outstanding immediately prior to
the issuance of such  securities  and the number of shares of Common Stock which
the aggregate  consideration  received (determined as provided in Paragraph 3(g)
below) for such securities would purchase at such current Market Price per share
of  Common  Stock or the  Exercise  Price  in  effect  immediately  prior to the
issuance of such securities,  whichever is higher,  and the denominator of which
shall be the sum of the number of shares of Common Stock outstanding immediately
prior to such  issuance and the maximum  number of shares of Common Stock of the
Company deliverable upon conversion of or in exchange for such securities at the
granted  conversion or exchange  price or rate.  Such  adjustment  shall be made
successively  whenever  such an issuance  is made.  To the extent that shares of
Common Stock are not issued after the  expiration of the  conversion or exchange
feature of any such  securities,  the Exercise  Price shall be readjusted to the
Exercise  Price  which would have then been in effect had the  adjustments  been
made upon the basis of the  issuance  of the  securities  which had in fact been
converted or exchanged.

          (f) Whenever the Exercise  Price payable upon exercise of the Warrants
is adjusted pursuant to Paragraphs 3(a), (b), (c), (d) and (e) above, the number
of the  shares  of  Common  Stock  purchasable  upon  exercise  of this  Warrant
Certificate shall simultaneously be adjusted by multiplying the number of shares
of Common Stock initially issuable upon exercise of this Warrant  Certificate by
the  Exercise  Price in effect on the date  hereof and  dividing  the product so
obtained by the adjusted Exercise Price.

          (g) For purposes of any computation respecting  consideration received
pursuant to Subsections (d) and (e) above, the following shall apply:

          (A) in the case of the  issuance  of shares of Common  Stock for cash,
the  consideration  shall be the amount of such cash,  provided  that in no case
shall any  deduction be

                                      A-6
<PAGE>

made  for  any  commissions,  discounts  or other   expenses  incurred  by   the
Company for any underwriting of the issue or otherwise in connection therewith;

          (B) in the case of the  issuance  of  shares  of  Common  Stock  for a
consideration in whole or in part other than cash, the consideration  other than
cash shall be deemed to be the fair market value  thereof as  determined in good
faith by the Board of Directors of the Company  (irrespective  of the accounting
treatment  thereof),  whose  determination  shall be conclusive  absent manifest
error; and

          (C) in the case of the  issuance  of  securities  convertible  into or
exchangeable  for shares of Common Stock, the aggregate  consideration  received
therefor shall be deemed to be the consideration received by the Company for the
issuance of such securities plus the additional minimum  consideration,  if any,
to be received by the  Company  upon the  conversion  or exchange  thereof  (the
consideration  in each case to be  determined  in the same manner as provided in
clauses (A) and (B) of this Paragraph 3(g).

          (h) Current Market Price Defined.  For the purpose of any  computation
under  Paragraphs  3(b), (c), (d) and/or (e), the current Market Price per share
of Common  Stock at any date  shall be deemed to be the  average  daily  Closing
Price of the shares of Common Stock for twenty  consecutive  trading days ending
within fifteen days before the date in question. The term "Closing Price" of the
shares of Common  Stock for a day or days shall mean (i) if the shares of Common
Stock are listed or admitted for trading on a national securities exchange,  the
last  reported  sales price regular way, or, in case no such reported sale takes
place on such day or days,  the  average of the  reported  closing bid and asked
prices regular way, in either case on the principal national securities exchange
on which the shares of the Common Stock are listed or admitted  for trading,  or
(ii) if the shares of Common  Stock are not listed or admitted  for trading on a
national  securities  exchange,  (A) the last  transaction  price for the Common
Stock on The Nasdaq Stock  Market  ("Nasdaq")  or, in the case no such  reported
transaction takes place on such day or days, the average of the reported closing
bid and asked prices  thereof  quoted on Nasdaq,  or (B) if the shares of Common
Stock are not quoted on Nasdaq,  the average of the closing bid and asked prices
of the Common Stock as quoted on the Over-The-Counter  Bulletin Board maintained
by the National Association of Securities Dealers,  Inc. (the "Bulletin Board"),
or (C) if the  shares of  Common  Stock  are not  quoted  on  Nasdaq  nor on the
Bulletin  Board,  the average of the closing bid and asked  prices of the common
stock in the over-the-counter market, as reported by Pinksheets.com, Inc., or an
equivalent generally accepted reporting service, or (iii) if on any such trading
day or days the shares of Common Stock are not quoted by any such  organization,
the fair  market  value of the  shares of Common  Stock on such day or days,  as
determined  in good faith by the Board of  Directors  of the  Company,  shall be
used.

          (i) Minimum Adjustment.  Except as hereinafter provided, no adjustment
of the Exercise Price hereunder  shall be made if such  adjustment  results in a
change of the  Exercise  Price then in effect of less than five cents ($.05) per
share.  Any  adjustment of less than five cents ($.05) per share of any Exercise
Price  shall be carried  forward  and shall be made at the time of and  together
with any subsequent adjustment which, together with adjustment or adjustments so
carried forward,  amounts to five cents ($.05) per share or more. However,  upon
exercise  of this

                                      A-7
<PAGE>

Warrant  Certificate,  the  Company  shall  make  all necessary  adjustments (to
the nearest cent) not theretofore made to the Exercise Price up to and including
the effective date upon which this Warrant Certificate is exercised.

          (j) Notice of  Adjustments.  Whenever  the  Exercise  Price  shall  be
adjusted   pursuant  to  this  Section  3, the Company shall promptly  deliver a
certificate  signed  by the  President  or a  Vice  President  and by the  Chief
Financial  Officer,  Treasurer or an Assistant  Treasurer or the Secretary or an
Assistant  Secretary of the Company,  setting forth, in reasonable  detail,  the
event  requiring the  adjustment,  the amount of the  adjustment,  the method by
which such  adjustment was  calculated  (including a description of the basis on
which the Board of Directors of the Company made any  determination  hereunder),
by first class mail postage prepaid to each Warrantholder.

          (k) Capital  Reorganizations and Other  Reclassifications.  In case of
any capital  reorganization of the Company,  or of any  reclassification  of the
shares  of  Common  Stock  (other  than  a   reclassification,   subdivision  or
combination of shares of Common Stock referred to in Paragraph 3(a)), or in case
of the  consolidation of the Company with, or the merger of the Company with, or
merger of the Company into, any other corporation (other than a reclassification
of the shares of Common Stock referred to in Paragraph  3(a) or a  consolidation
or  merger  which  does not  result  in any  reclassification  or  change of the
outstanding  shares of Common Stock) or of the sale of the properties and assets
of the Company as, or substantially  as, an entirety to any other corporation or
entity, each Warrant shall, after such capital reorganization,  reclassification
of shares of Common Stock, consolidation,  merger, or sale, be exercisable, upon
the terms and conditions  specified in this Warrant  Certificate,  for the kind,
amount  and  number of shares or other  securities,  assets,  or cash to which a
holder of the number of shares of Common Stock  purchasable (at the time of such
capital   reorganization,   reclassification   of  shares   of   Common   Stock,
consolidation,  merger or sale) upon  exercise of such  Warrant  would have been
entitled to receive upon such capital reorganization, reclassification of shares
of Common  Stock,  consolidation,  merger,  or sale;  and in any such  case,  if
necessary, the provisions set forth in this Section 3 with respect to the rights
and interests thereafter of the Warrantholder shall be appropriately adjusted so
as to be applicable,  as nearly  equivalent as possible,  to any shares or other
securities,  assets,  or cash  thereafter  deliverable  on the  exercise  of the
Warrants. The Company shall not effect any such consolidation,  merger, or sale,
unless prior to or  simultaneously  with the consummation  thereof the successor
corporation  or  entity  (if  other  than  the  Company)   resulting  from  such
consolidation  or merger or the corporation or entity  purchasing such assets or
other appropriate corporation or entity shall assume, by written instrument, the
obligation to deliver to the Warrantholder such shares,  securities,  assets, or
cash as, in  accordance  with the  foregoing  provisions,  such  holders  may be
entitled to purchase and the other  obligations  hereunder.  The  subdivision or
combination of shares of Common Stock at any time  outstanding into a greater or
lesser  number of shares  shall  not be deemed to be a  reclassification  of the
shares of Common Stock for purposes of this Paragraph 3(k).

          (l) Adjustments to Other Securities. In the event that at any time, as
a result of an  adjustment  made  pursuant to this Section 3, the  Warrantholder
shall become  entitled to purchase any shares or securities of the Company other
than the shares of Common Stock,

                                      A-8
<PAGE>

thereafter   the  number  of  such  other shares or  securities  so  purchasable
upon  exercise  of each  Warrant  and the  exercise  price  for such  shares  or
securities  shall be subject to adjustment  from time to time in a manner and on
terms as nearly  equivalent  as possible to the  provisions  with respect to the
shares of Common Stock contained in Paragraphs 3(a) through (e), inclusive.

          (m) Deferral   of   Issuance   of   Additional   Shares   in   Certain
Circumstances.   In  any  case  in  which this  Section 3 shall  require that an
adjustment  in the  Exercise  Price be made  effective as of a record date for a
specified  event,  the Company may elect to defer until the  occurrence  of such
event issuing to the  Warrantholder  exercised after such record date the shares
of Common Stock, if any,  issuable upon such exercise over and above the Warrant
Shares,  if any,  issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment;  provided,  however,  that the Company shall
deliver as soon as  practicable  to such holder a due bill or other  appropriate
instrument  provided by the Company  evidencing  such holder's  right to receive
such  additional  shares  of  Common  Stock  upon the  occurrence  of the  event
requiring such adjustment.

4.   DEFINITION OF COMMON STOCK.

          The Common Stock  issuable upon exercise of the Warrants  shall be the
Common Stock as constituted  on the date hereof except as otherwise  provided in
Section 3.

5.   REPLACEMENT OF SECURITIES.

          If this  Warrant  Certificate  shall be  lost,  stolen,  mutilated  or
destroyed,  the Company shall, on such terms as to indemnity or otherwise as the
Company may in its discretion reasonably impose, issue a new certificate of like
tenor or date  representing  in the  aggregate  the right to  subscribe  for and
purchase  the number of shares of Common Stock which may be  subscribed  for and
purchased  hereunder.  Any such new  certificate  shall  constitute  an original
contractual  obligation  of the  Company,  whether  or not the  allegedly  lost,
stolen,  mutilated  or  destroyed  Warrant  Certificate  shall  be at  any  time
enforceable by anyone.

6.   REGISTRATION.

          This Warrant  Certificate,  as well as all other warrant  certificates
representing  Warrants  shall be numbered and shall be  registered in a register
(the "Warrant  Register")  maintained at the Company Offices as they are issued.
The Warrant  Register shall list the name,  address and Social Security or other
Federal Identification Number, if any, of all Warrantholders.  The Company shall
be entitled to treat the  Warrantholder  as set forth in the Warrant Register as
the owner in fact of the  Warrants  as set forth  therein for all  purposes  and
shall not be bound to recognize  any  equitable or other claim to or interest in
such Warrants on the part of any other  person,  and shall not be liable for any
registration  of transfer of Warrants that are registered or to be registered in
the name of a  fiduciary  or the  nominee of a  fiduciary  unless  made with the
actual  knowledge that a fiduciary or nominee is committing a breach of trust in
requesting such  registration of transfer,  or with such knowledge of such facts
that its participation therein amounts to bad faith.

                                      A-9
<PAGE>

7.   TRAMSFER.

     NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR THE SHARES
OF COMMON STOCK OR ANY OTHER SECURITIES  ISSUABLE UPON EXERCISE OF SUCH WARRANTS
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH WARRANTS
HAVE BEEN  ACQUIRED,  AND ANY  SHARES OF  COMMON  STOCK OR ANY OTHER  SECURITIES
ISSUABLE  UPON  EXERCISE  OF SUCH  WARRANTS  ARE  REQUIRED TO BE  ACQUIRED,  FOR
INVESTMENT  PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE,  AND MAY NOT
BE SOLD,  ASSIGNED,  PLEDGED,  HYPOTHECATED OR OTHERWISE  TRANSFERRED WITHOUT AN
EFFECTIVE  REGISTRATION  STATEMENT FOR SUCH WARRANTS AND/OR SUCH SHARES OR OTHER
SECURITIES  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  AND APPLICABLE  STATE
SECURITIES  LAWS OR AN  OPINION OF  COUNSEL  SATISFACTORY  TO THE ISSUER OF SUCH
WARRANTS AND SUCH SHARES OR OTHER SECURITIES TO THE EFFECT THAT  REGISTRATION IS
NOT REQUIRED UNDER SUCH ACT AND SUCH STATE SECURITIES LAWS.

8.   EXCHANGE OF WARRANT CERTIFICATES.

          This Warrant  Certificate may be exchanged for another  certificate or
certificates  entitling the  Warrantholder  thereof to purchase a like aggregate
number of Warrant Shares as this Warrant Certificate entitles such Warrantholder
to purchase.  A Warrantholder  desiring to so exchange this Warrant  Certificate
shall make such request in writing delivered to the Company, and shall surrender
this Warrant  Certificate  therewith.  Thereupon,  the Company shall execute and
deliver to the person entitled thereto a new certificate or certificates, as the
case may be, as so requested.

9.   NOTICES.

          All notices and other communications hereunder shall be in writing and
shall be  deemed  given  when  delivered  in  person,  against  written  receipt
therefor, or two days after being sent, by registered or certified mail, postage
prepaid, return receipt requested, and, if to the Warrantholder, at such address
as is shown on the Warrant  Register or as may otherwise may have been furnished
to the Company in writing in accordance with this Section 9 by the Warrantholder
and,  if to the  Company,  at the Company  Offices or such other  address as the
Company shall give notice thereof to the  Warrantholder  in accordance with this
Section 9.

10.  REGISTRATION RIGHTS.

          The Warrantholder shall have these registration rights with respect to
the Warrants as set forth in that certain Securities Purchase  Agreement,  dated
as of October 12, 2000, by and between the Company and eAcceleration Corp.

                                      A-10
<PAGE>

11.  MISCELLANEOUS.

          This Warrant  Certificate and any term hereof may be changed,  waived,
discharged  or terminated  only by an instrument in writing  signed by the party
against which  enforcement of such change,  waiver,  discharge or termination is
sought.  This  certificate  is  deemed to have  been  delivered  in the State of
Washington  and shall be construed and enforced in accordance  with and governed
by the laws of such State,  without regard to its conflicts of laws  principles.
The headings in this Warrant Certificate are for purposes of reference only, and
shall not limit or otherwise affect any of the terms hereof.

12.  EXPIRATION.

          Unless as hereinafter  provided,  the right to exercise these Warrants
shall expire at the Expiration Time.

Dated: As of            , 2000
             -----------
                                           CONTERA CORPORATION

                                      By:
                                          ----------------------------------
                                          Name:
                                          Title:
ATTEST:

-----------------------------
Name:
Title

                                      A-11

<PAGE>

                                  EXERCISE FORM

                                               Dated:                 ,
                                                     ----------------  --------

TO: CONTERA CORPORATION:

          The  undersigned  hereby  irrevocably  elects to  exercise  the within
Warrant, to the extent of purchasing  _________________  shares of Common Stock,
and hereby  makes  payment of  _____________  in payment of the actual  Exercise
Price thereof  $__________,  including (i) $__________ and (ii)  cancellation of
Warrants, to purchase ________ shares of Common Stock.

                               ------------------

                     INSTRUCTIONS FOR REGISTRATION OF STOCK

                 Name:
                       ---------------------------------------------------------
                           (Please type or print in block letters)
             Taxpayer
       Identification
               Number:
                       ---------------------------------------------------------

              Address:
                       ---------------------------------------------------------

                       ---------------------------------------------------------

                       ---------------------------------------------------------

                               ------------------

            Signature:
                       ---------------------------------------------------------
                       (Signature  must conform in all respects to the name of
                         the  Warrantholder as set forth on the face of this
                                       Warrant Certificate.)

<PAGE>

                                 ASSIGNMENT FORM

                       FOR VALUE RECEIVED,
                                          --------------------------------------
                                         (Please type or print in block letters)

hereby sells, assigns and transfers unto:

                 Name:
                       ---------------------------------------------------------
                               (Please type or print in block letters)
             Taxpayer
       Identification
               Number:
                       ---------------------------------------------------------

              Address:
                       ---------------------------------------------------------

                       ---------------------------------------------------------

                       ---------------------------------------------------------

this  Warrant   Certificate  and  the  Warrants   represented  by  this  Warrant
Certificate  to  the  extent  of  ________________   Warrants  and  does  hereby
irrevocably constitute and appoint ___________________________ Attorney-in-Fact,
to transfer the same on the books of the Company with full power of substitution
in the premises.

               Dated:
                      ---------------------------------------------

            Signature:
                      ----------------------------------------------------------
                       (Signature  must conform in all respects to the name of
                         the  Warrantholder  as set forth on the face of this
                                         Warrant Certificate.)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]