Common Stock Purchase Agreement - PurchasePro.com Inc. and Fusion Capital Fund II LLC


                                                                  EXECUTION COPY


                         COMMON STOCK PURCHASE AGREEMENT


         COMMON STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of December
21,  2001 by and  between  PURCHASEPRO.COM,  INC.,  a  Nevada  corporation  (the
"Company"),  and FUSION  CAPITAL  FUND II, LLC, an  Illinois  limited  liability
company (the "Buyer").  Capitalized  terms used herein and not otherwise defined
herein are defined in Section 10 hereof.


         WHEREAS:

         Subject to the terms and  conditions set forth in this  Agreement,  the
Company  wishes  to sell to the  Buyer,  and the  Buyer  wishes  to buy from the
Company,  up to Fifteen Million Dollars  ($15,000,000)  of the Company's  common
stock,  par value  $0.01 per share (the  "Common  Stock").  The shares of Common
Stock to be  purchased  hereunder  (excluding  Commitment  Shares as  defined in
Section 4(f) hereof) are referred to herein as the "Purchase Shares."

         NOW THEREFORE, the Company and the Buyer hereby agree as follows:

         1.       PURCHASE OF COMMON STOCK.

         Subject to the terms and  conditions  set forth in  Sections 6, 7 and 9
below,  the Company  hereby  agrees to sell to the Buyer,  and the Buyer  hereby
agrees to purchase from the Company, Purchase Shares as follows:

         (a) Commencement of Purchases of Common Stock. The purchase and sale of
Purchase  Shares  hereunder shall commence (the  "Commencement")  not later than
five (5) Trading  Days  following  the date of  satisfaction  (or waiver) of the
conditions  to the  Commencement  set forth in  Sections  6 and 7 below (or such
later date as is mutually  agreed to by the Company and Buyer) (the date of such
Commencement, the "Commencement Date").

         (b) Buyer's Purchase Rights and  Obligations.  Subject to the Company's
right to suspend  purchases  under  Section  1(d)(ii)  hereof,  the Buyer  shall
purchase Purchase Shares on each Trading Day during each Monthly Period equal to
the Daily Base  Amount at the  Purchase  Price.  Within one (1)  Trading  Day of
receipt of Purchase  Shares,  the Buyer shall pay to the Company an amount equal
to the Purchase  Amount with respect to such Purchase Shares as full payment for
the purchase of the Purchase Shares so received. The Company shall not issue any
fraction  of a share of Common  Stock upon any  purchase.  All  Purchase  Shares
(including  fractions  thereof)  issuable upon a purchase  under this  Agreement
shall be  aggregated  for purposes of  determining  whether the  purchase  would


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result in the issuance of a fraction of a share of Common  Stock.  If, after the
aforementioned  aggregation,  the  issuance  would  result in the  issuance of a
fraction of a share of Common Stock,  the Company shall round such fraction of a
share of Common Stock up or down to the nearest  whole share.  All payments made
under  this  Agreement  shall be made in lawful  money of the  United  States of
America by check or wire transfer of immediately available funds to such account
as the payee may from time to time  designate  by written  notice in  accordance
with the provisions of this Agreement.  Whenever any amount  expressed to be due
by the terms of this Agreement is due on any day which is not a Trading Day, the
same shall instead be due on the next succeeding day which is a Trading Day.

         (c)      Company's Right to Decrease or Increase the Daily Base Amount.

                  (i)  Company's  Right to Decrease the Daily Base  Amount.  The
         Company  shall always have the right at any time to decrease the amount
         of the Daily Base Amount by  delivering  written  notice (a "Daily Base
         Amount  Decrease  Notice") to the Buyer which notice shall  specify the
         new Daily Base  Amount.  The  decrease in the Daily Base  Amount  shall
         become  effective  one  Trading  Day after  receipt by the Buyer of the
         Daily Base Amount  Decrease  Notice.  Any  purchases by the Buyer which
         have a Purchase  Date on or prior to the first (1st)  Trading Day after
         receipt by the Buyer of a Daily Base  Amount  Decrease  Notice  must be
         honored by the Company as otherwise  provided  herein.  The decrease in
         the Daily Base Amount shall remain in effect until the Company delivers
         to the Buyer a Daily Base Amount Increase Notice (as defined below).

                  (ii)  Company's  Right to Increase the Daily Base Amount.  The
         Company  shall always have the right at any time to increase the amount
         of the  Daily  Base  Amount up to the  Original  Daily  Base  Amount by
         delivering  written  notice to the Buyer  stating the new amount of the
         Daily Base  Amount (a "Daily  Base  Amount  Increase  Notice").  If the
         Closing  Sale  Price  of the  Common  Stock  on  each of the  five  (5)
         consecutive  Trading  Days  immediately  prior to a Daily  Base  Amount
         Increase Notice is at least $4.00,  the Company shall have the right to
         deliver a Daily Base Amount  Increase Notice which increases the amount
         of the Daily Base Amount to any amount  above the  Original  Daily Base
         Amount.  A Daily Base Amount  Increase  Notice shall be  effective  one
         Trading Day after receipt by the Buyer.  Such increase in the amount of
         the Daily Base Amount  shall  continue in effect  until the delivery to
         the  Buyer of a Daily  Base  Amount  Decrease  Notice.  Notwithstanding
         anything  to the  contrary,  if the Daily Base Amount then in effect is
         greater than the  Original  Daily Base Amount and the Sale Price of the
         Common Stock  during any Trading Day is less than $4.00,  the amount of
         the Daily Base Amount shall be the  Original  Daily Base Amount or such
         lesser  amount as  specified  by the  Company  in a Daily  Base  Amount
         Decrease  Notice and any of the Buyer's  obligations to purchase shares
         of Common  Stock in excess of the  Original  Daily Base Amount shall be
         terminated.  Thereafter,  the  Company  shall  again  have the right to
         increase  the amount of the Daily Base  Amount to any amount  above the
         Original Daily Base Amount only if the Closing Sale Price of the Common
         Stock is at least $4.00 on each of five (5)  consecutive  Trading Days.
         Notwithstanding  the forgoing,  the Buyer shall  consider in good faith
         any request by the Company to increase the Daily Base Amount regardless
         of the Sale Price of the Common Stock.

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         (d)      Limitations on Purchases.

                  (i) Limitation on Beneficial Ownership.  The Company shall not
         effect any sale under this  Agreement  and the Buyer shall not have the
         right to purchase  shares of Common  Stock under this  Agreement to the
         extent that after giving  effect to such  purchase  the Buyer  together
         with its  affiliates  would  beneficially  own in excess of 4.9% of the
         outstanding  shares of the Common Stock  following such  purchase.  For
         purposes  hereof,  the  number of shares of Common  Stock  beneficially
         owned by the Buyer and its  affiliates or acquired by the Buyer and its
         affiliates,  as the case may be, shall  include the number of shares of
         Common  Stock  issuable  in  connection  with  a  purchase  under  this
         Agreement  with respect to which the  determination  is being made, but
         shall  exclude  the  number of shares of Common  Stock  which  would be
         issuable  upon (1) a purchase of the remaining  Available  Amount which
         has not been submitted for purchase,  and (2) exercise or conversion of
         the unexercised or unconverted  portion of any other  securities of the
         Company  (including,  without  limitation,  any warrants)  subject to a
         limitation  on  conversion  or  exercise  analogous  to the  limitation
         contained herein beneficially owned by the Buyer and its affiliates. If
         the 4.9%  limitation  is ever reached the Company shall have the option
         to increase such  limitation  to 9.9% by delivery of written  notice to
         the Buyer.  Thereafter,  if the 9.9%  limitation  is ever  reached this
         shall not effect or limit the Buyer's  obligation to purchase the Daily
         Base Amount as otherwise  provided in this  Agreement  (i.e.  the Buyer
         shall  continue to pay the Purchase  Price for Purchase  Shares but the
         Company  shall not  issue,  and the  Buyer  shall  not be  entitled  to
         receive, such applicable Purchase Shares until such time as, and to the
         extent that, the Buyer is below the 9.9%  limitation).  For purposes of
         this Section, in determining the number of outstanding shares of Common
         Stock the Buyer may rely on the number of outstanding  shares of Common
         Stock as reflected in (1) the  Company's  most recent Form 10-Q or Form
         10-K, as the case may be, (2) a more recent public  announcement by the
         Company or (3) any other  written  communication  by the Company or its
         transfer  agent  setting  forth the  number  of shares of Common  Stock
         outstanding.  Upon the reasonable written or oral request of the Buyer,
         the Company shall  promptly  confirm orally and in writing to the Buyer
         the number of shares of Common Stock then outstanding. In any case, the
         number of outstanding  shares of Common Stock shall be determined after
         giving effect to any purchases  under this Agreement by the Buyer since
         the date as of which such number of outstanding  shares of Common Stock
         was reported.  Except as otherwise  set forth  herein,  for purposes of
         this Section  1(d)(i),  beneficial  ownership  shall be  determined  in
         accordance  with Section 13(d) of the Securities  Exchange Act of 1934,
         as amended.

                  (ii) Company's Right to Suspend Purchases. The Company may, at
         any time, give written notice (a "Purchase  Suspension  Notice") to the
         Buyer  suspending  purchases of Purchase Shares by the Buyer under this
         Agreement.  The Purchase  Suspension Notice shall be effective only for


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         purchases  that have a Purchase  Date later  than one (1)  Trading  Day
         after  receipt of the  Purchase  Suspension  Notice by the  Buyer.  Any
         purchase by the Buyer that has a Purchase Date on or prior to the first
         (1st) Trading Day after  receipt by the Buyer of a Purchase  Suspension
         Notice  from the Company  must be honored by the  Company as  otherwise
         provided  herein.  Such purchase  suspension  shall  continue in effect
         until a revocation in writing by the Company,  at its sole  discretion.
         So long as a Purchase  Suspension Notice is in effect,  the Buyer shall
         not be obligated to purchase any Purchase Shares from the Company under
         Section 1 of this Agreement.

                  (iii) Purchase Price Floor. The Buyer shall not have the right
         or the obligation to purchase any Purchase  Shares under this Agreement
         in the event that the  Purchase  Price for any  purchases  of  Purchase
         Shares would be less than the Floor Price.  The Company may at any time
         give written notice (a "Floor Price Notice") to the Buyer increasing or
         decreasing  the Floor Price.  The Floor Price Notice shall be effective
         only for purchases that have a Purchase Date later than one (1) Trading
         Day after receipt of the Floor Price Notice by the Buyer.  Any purchase
         by the Buyer that has a Purchase  Date on or prior to the first Trading
         Day after  receipt of a Floor Price  Notice  from the  Company  must be
         honored by the Company as otherwise provided herein.

         (e) Records of Purchases. The Buyer and the Company shall each maintain
records  showing the remaining  Available  Amount at any give time and the dates
and  Purchase  Amounts  for each  purchase  or  shall  use  such  other  method,
reasonably satisfactory to the Buyer and the Company.

         (f) Taxes. The Company shall pay any and all transfer, stamp or similar
taxes that may be payable  with  respect to the  issuance  and  delivery  of any
shares of Common Stock to the Buyer made under of this Agreement.

         (g)  Compliance  with  Principal  Market  Rules.  The Company shall not
effect any sale under this  Agreement  and the Buyer shall not have the right to
purchase  shares of Common  Stock under this  Agreement to the extent that after
giving effect to such purchase the "Exchange Cap" shall be deemed to be reached.
The "Exchange Cap" shall be deemed to have been reached if, at any time prior to
the shareholders of the Company  approving the transaction  contemplated by this
Agreement,  upon a purchase under this  Agreement,  the Purchase Shares issuable
pursuant to such purchase would,  together with all Purchase  Shares  previously
issued under this Agreement,  exceed 19.9% of the  outstanding  shares of Common
Stock as of the date of this Agreement).  The Company may, but shall be under no
obligation to, request its shareholders to approve the transaction  contemplated
by this  Agreement.  The Company shall not be required or permitted to issue any
shares of Common Stock under this  Agreement if such  issuance  would breach the
Company's obligations under the rules or regulations of the Principal Market.

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         2.       BUYER'S REPRESENTATIONS AND WARRANTIES.

         The Buyer  represents  and  warrants to the Company that as of the date
hereof and as of the Commencement Date:

         (a) Investment  Purpose.  The Buyer is entering into this Agreement and
acquiring  the  Commitment  Shares,  (as defined in Section 4(f)  hereof)  (this
Agreement and the Commitment  Shares are collectively  referred to herein as the
"Securities"),  for its own  account  for  investment  only  and not with a view
towards,  or for resale in  connection  with,  the public  sale or  distribution
thereof;  provided however, by making the representations herein, the Buyer does
not agree to hold any of the Securities for any minimum or other specific term.

         (b) Accredited  Investor Status. The Buyer is an "accredited  investor"
as that term is defined in Rule 501(a)(3) of Regulation D.

         (c) Reliance on Exemptions.  The Buyer  understands that the Securities
are being  offered and sold to it in reliance  on specific  exemptions  from the
registration requirements of United States federal and state securities laws and
that the  Company  is relying  in part upon the truth and  accuracy  of, and the
Buyer's   compliance   with,  the   representations,   warranties,   agreements,
acknowledgments  and  understandings  of the Buyer set forth  herein in order to
determine the  availability  of such exemptions and the eligibility of the Buyer
to acquire the Securities.

         (d)  Information.  The  Buyer  has been  furnished  with all  materials
relating to the business,  finances and  operations of the Company and materials
relating  to the offer  and sale of the  Securities  that  have been  reasonably
requested by the Buyer,  including,  without  limitation,  the SEC Documents (as
defined in Section 3(f) hereof).  The Buyer  understands  that its investment in
the Securities involves a high degree of risk. The Buyer (i) is able to bear the
economic risk of an investment in the  Securities  including a total loss,  (ii)
has such knowledge and  experience in financial and business  matters that it is
capable of  evaluating  the merits and risks of the proposed  investment  in the
Securities  and (iii) has had an  opportunity  to ask  questions  of and receive
answers from the officers of the Company concerning the financial  condition and
business of the  Company  and others  matters  related to an  investment  in the
Securities.  Neither such  inquiries nor any other due diligence  investigations
conducted by the Buyer or its representatives  shall modify, amend or affect the
Buyer's right to rely on the Company's  representations and warranties contained
in Section 3 below. The Buyer has sought such  accounting,  legal and tax advice
as it has  considered  necessary to make an informed  investment  decision  with
respect to its acquisition of the Securities.

         (e) No Governmental Review. The Buyer understands that no United States
federal  or state  agency or any other  government  or  governmental  agency has
passed on or made any  recommendation  or  endorsement  of the Securities or the
fairness  or  suitability  of the  investment  in the  Securities  nor have such
authorities  passed  upon  or  endorsed  the  merits  of  the  offering  of  the
Securities.


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         (f) Transfer or Resale.  The Buyer  understands that except as provided
in the Registration  Rights  Agreement (as defined in Section 6(a) hereof):  (i)
the Securities have not been and are not being  registered under the 1933 Act or
any state securities  laws, and may not be offered for sale,  sold,  assigned or
transferred  unless (A) subsequently  registered  thereunder or (B) an exemption
exists  permitting such Securities to be sold,  assigned or transferred  without
such registration;  (ii) any sale of the Securities made in reliance on Rule 144
may be made only in accordance  with the terms of Rule 144 and further,  if Rule
144 is not applicable, any resale of the Securities under circumstances in which
the seller (or the person  through whom the sale is made) may be deemed to be an
underwriter  (as that term is  defined in the 1933 Act) may  require  compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder;  and (iii) neither the Company nor any other person is under any
obligation to register the Securities under the 1933 Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder.

         (g)  Validity;  Enforcement.  This  Agreement has been duly and validly
authorized,  executed  and  delivered  on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable  against the Buyer in accordance with
its terms,  subject as to enforceability to general  principles of equity and to
applicable bankruptcy, insolvency,  reorganization,  moratorium, liquidation and
other  similar laws  relating to, or affecting  generally,  the  enforcement  of
applicable creditors' rights and remedies.

         (h) Residency. The Buyer is a resident of the State of Illinois.

         (i) No Prior Short  Selling.  The Buyer  represents and warrants to the
Company  that at no time  prior  to the  date of this  Agreement  has any of the
Buyer,  its agents,  associates,  representatives  or  affiliates  engaged in or
effected, in any manner whatsoever, directly or indirectly, any (i) "short sale"
(as such term is defined  in Rule 3b-3 of the 1934 Act) of the  Common  Stock or
(ii) hedging transaction, which establishes a net short position with respect to
the Common Stock.


         3.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company  represents  and  warrants to the Buyer that as of the date
hereof and as of the Commencement Date:

         (a) Organization and Qualification.  The Company and its "Subsidiaries"
(which for  purposes of this  Agreement  means any entity in which the  Company,
directly or indirectly, owns 50% or more of the voting stock or capital stock or
other similar  equity  interests)  are  corporations  duly organized and validly
existing in good standing under the laws of the  jurisdiction  in which they are
incorporated,  and have the requisite corporate power and authority to own their
properties  and to carry on their business as now being  conducted.  Each of the
Company and its  Subsidiaries  is duly qualified as a foreign  corporation to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business  conducted by it makes such qualification
necessary,  except to the extent  that the failure to be so  qualified  or be in


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good  standing  could not  reasonably  be  expected  to have a Material  Adverse
Effect. As used in this Agreement,  "Material Adverse Effect" means any material
adverse  effect on any of: (i) the  business,  properties,  assets,  operations,
results  of   operations   or  financial   condition  of  the  Company  and  its
Subsidiaries,  if any, taken as a whole, or (ii) the authority or ability of the
Company to perform its obligations  under the Transaction  Documents (as defined
in Section 3(b) hereof).  The Company has no Subsidiaries except as set forth on
Schedule 3(a).

         (b)  Authorization;  Enforcement;  Validity.  (i) The  Company  has the
requisite   corporate  power  and  authority  to  enter  into  and  perform  its
obligations  under this Agreement and to issue the Securities in accordance with
the terms hereof,  and shall have, as of the  Commencement  Date,  the requisite
corporate  power and authority to enter into and perform its  obligations  under
the  Registration  Rights Agreement (as defined in Section 6(a) hereof) and each
of the other agreements entered into by the parties on the Commencement Date and
attached hereto as exhibits to this Agreement  (collectively,  the  "Transaction
Documents"), and to issue the Securities in accordance with the terms hereof and
thereof, (ii) the execution and delivery of the Agreement by the Company and the
consummation by it of the transactions  contemplated  hereby,  including without
limitation,  the  issuance  of the  Commitment  Shares and the  reservation  for
issuance and the issuance of the Purchase  Shares and the Additional  Commitment
Shares issuable under this Agreement, have been duly authorized by the Company's
Board of Directors and no further  consent or  authorization  is required by the
Company,  its Board of  Directors  or its  shareholders  and the  execution  and
delivery of the Transaction  Documents (other than the Agreement) by the Company
and the  consummation of the transactions  contemplated  thereby shall be, as of
the  Commencement  Date, duly authorized by the Company's Board of Directors and
no further consent or authorization shall be required by the Company,  its Board
of Directors or its shareholders,  (iii) this Agreement has been, and each other
Transaction  Document  shall be on the  Commencement  Date,  duly  executed  and
delivered  by the Company and (iv) this  Agreement  constitutes,  and each other
Transaction  Document  upon  its  execution  on  behalf  of the  Company,  shall
constitute, the valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except as such enforceability may be
limited by general  principles of equity or applicable  bankruptcy,  insolvency,
reorganization,   moratorium,  liquidation  or  similar  laws  relating  to,  or
affecting generally, the enforcement of creditors' rights and remedies.

         (c) Capitalization. As of the date hereof, the authorized capital stock
of the Company  consists of (i) 190.000,000  shares of Common Stock, of which as
of the date hereof, 73,889,551 shares are issued and outstanding,  1,127,498 are
held as treasury shares, 23,500,000 shares are reserved for issuance pursuant to
the Company's stock option plans of which only  approximately  4,152,261  shares
remain  available  and  3,994,446  shares are issuable and reserved for issuance
pursuant  to  securities  (other  than  stock  options  issued  pursuant  to the
Company's stock option plans)  exercisable or  exchangeable  for, or convertible
into, shares of Common Stock and (ii) 5,000,000 shares of Preferred Stock, $.001
par value, of which as of the date hereof no shares are issued and  outstanding.
All of such  outstanding  shares have been, or upon  issuance  will be,  validly
issued and are fully paid and  nonassessable.  Except as  disclosed  in Schedule
3(c),  (i) no shares of the  Company's  capital  stock are subject to preemptive


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rights or any other  similar  rights or any liens or  encumbrances  suffered  or
permitted by the Company,  (ii) there are no outstanding debt securities,  (iii)
there are no outstanding options, warrants, scrip, rights to subscribe to, calls
or commitments of any character  whatsoever relating to, or securities or rights
convertible  into,  any  shares of  capital  stock of the  Company or any of its
Subsidiaries, or contracts, commitments, understandings or arrangements by which
the  Company  or  any of  its  Subsidiaries  is or may  become  bound  to  issue
additional  shares of capital stock of the Company or any of its Subsidiaries or
options,  warrants,  scrip,  rights to subscribe to, calls or commitments of any
character  whatsoever relating to, or securities or rights convertible into, any
shares of capital  stock of the Company or any of its  Subsidiaries,  (iv) there
are  no  agreements  or  arrangements  under  which  the  Company  or any of its
Subsidiaries is obligated to register the sale of any of their  securities under
the 1933 Act  (except  the  Registration  Rights  Agreement),  (v)  there are no
outstanding  securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions,  and there are no contracts,
commitments,  understandings  or arrangements by which the Company or any of its
Subsidiaries  is or may become  bound to redeem a security of the Company or any
of its  Subsidiaries,  (vi) there are no  securities or  instruments  containing
anti-dilution  or similar  provisions  that will be triggered by the issuance of
the  Securities  as described in this  Agreement  and (vii) the Company does not
have any stock appreciation rights or "phantom stock" plans or agreements or any
similar  plan or  agreement.  The  Company has  furnished  to the Buyer true and
correct copies of the Company's Certificate of Incorporation,  as amended and as
in effect on the date  hereof  (the  "Certificate  of  Incorporation"),  and the
Company's  By-laws,  as  amended  and as in  effect  on  the  date  hereof  (the
"By-laws"),  and summaries of the terms of all  securities  convertible  into or
exercisable for Common Stock, if any, and copies of any documents containing the
material rights of the holders thereof in respect thereto.

         (d)  Issuance  of  Securities.  The  Commitment  Shares  have been duly
authorized  and,  upon  issuance  in  accordance  with  the  terms  hereof,  the
Commitment Shares shall be (i) validly issued, fully paid and non-assessable and
(ii) free from all taxes,  liens and charges with respect to the issue  thereof.
10,000,000  shares of Common  Stock have been duly  authorized  and reserved for
issuance  upon purchase  under this  Agreement.  300,000  shares of Common Stock
(subject  to  equitable  adjustment  for any  reorganization,  recapitalization,
non-cash  dividend,  stock split or other  similar  transaction)  have been duly
authorized  and  reserved  for  issuance  as  Additional  Commitment  Shares  in
accordance with Section 4(f) this Agreement. Upon issuance and payment therefore
in  accordance  with the terms and  conditions of this  Agreement,  the Purchase
Shares shall be validly issued,  fully paid and  nonassessable and free from all
taxes,  liens and charges  with respect to the issue  thereof,  with the holders
being entitled to all rights accorded to a holder of Common Stock.

         (e) No Conflicts.  Except as disclosed in Schedule 3(e), the execution,
delivery and  performance  of the  Transaction  Documents by the Company and the
consummation by the Company of the transactions  contemplated hereby and thereby
(including, without limitation, the reservation for issuance and issuance of the
Purchase  Shares)  will not (i)  result in a  violation  of the  Certificate  of
Incorporation,  any Certificate of  Designations,  Preferences and Rights of any
outstanding  series of  preferred  stock of the  Company or the  By-laws or (ii)
conflict  with,  or constitute a default (or an event which with notice or lapse


                                       8


of time or both would become a default)  under,  or give to others any rights of
termination,   amendment,   acceleration  or  cancellation  of,  any  agreement,
indenture or  instrument  to which the Company or any of its  Subsidiaries  is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree  (including  federal and state  securities  laws and  regulations and the
rules and regulations of the Principal  Market  applicable to the Company or any
of its  Subsidiaries) or by which any property or asset of the Company or any of
its Subsidiaries is bound or affected, except in the case of conflicts, defaults
and  violations  under clause (ii),  which could not  reasonably  be expected to
result in a Material  Adverse  Effect.  Except as  disclosed  in Schedule  3(e),
neither the Company nor its  Subsidiaries  is in  violation of any term of or in
default under its Certificate of Incorporation,  any Certificate of Designation,
Preferences  and  Rights of any  outstanding  series of  preferred  stock of the
Company or By-laws or their  organizational  charter or  by-laws,  respectively.
Except as  disclosed  in  Schedule  3(e),  neither  the  Company  nor any of its
Subsidiaries  is in violation of any term of or is in default under any material
contract, agreement, mortgage,  indebtedness,  indenture,  instrument, judgment,
decree or order or any statute,  rule or regulation applicable to the Company or
its  Subsidiaries,  except for possible  conflicts,  defaults,  terminations  or
amendments  which could not  reasonably  be expected to have a Material  Adverse
Effect. The business of the Company and its Subsidiaries is not being conducted,
and shall not be conducted,  in violation of any law,  ordinance,  regulation of
any governmental entity, except for possible violations, the sanctions for which
either individually or in the aggregate could not reasonably be expected to have
a Material Adverse Effect. Except as specifically contemplated by this Agreement
and as required  under the 1933 Act or applicable  state  securities  laws,  the
Company is not  required to obtain any  consent,  authorization  or order of, or
make any filing or registration  with, any court or  governmental  agency or any
regulatory  or  self-regulatory  agency in order for it to  execute,  deliver or
perform  any  of its  obligations  under  or  contemplated  by  the  Transaction
Documents in accordance with the terms hereof or thereof. Except as disclosed in
Schedule 3(e), all consents,  authorizations,  orders, filings and registrations
which the Company is required to obtain pursuant to the preceding sentence shall
be obtained or effected on or prior to the Commencement  Date.  Except as listed
in Schedule 3(e), the Company has received no notices or correspondence from the
Principal  Market since January 1, 2001. The Principal  Market has not commenced
delisting proceedings against the Company.

         (f)  SEC  Documents;  Financial  Statements.  Except  as  disclosed  in
Schedule 3(f),  since January 1, 2000, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the "1934 Act") (all of the foregoing, whether timely filed or
not,  filed  prior to the date  hereof and all  exhibits  included  therein  and
financial  statements  and  schedules  thereto  and  documents  incorporated  by
reference therein being hereinafter  referred to as the "SEC Documents").  As of
their  respective  dates (except as they have been correctly  amended),  the SEC
Documents  complied in all material  respects with the  requirements of the 1934
Act and the rules and regulations of the SEC promulgated  thereunder  applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed
with the SEC  (except as they may have been  properly  amended),  contained  any


                                       9


untrue statement of a material fact or omitted to state a material fact required
to be stated  therein or necessary in order to make the statements  therein,  in
light of the  circumstances  under which they were made, not  misleading.  As of
their  respective  dates  (except  as they  have  been  properly  amended),  the
financial statements of the Company included in the SEC Documents complied as to
form in all material  respects with applicable  accounting  requirements and the
published rules and regulations of the SEC with respect thereto.  Such financial
statements have been prepared in accordance with generally  accepted  accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto or (ii)
in the case of  unaudited  interim  statements,  to the extent  they may exclude
footnotes or may be condensed or summary  statements)  and fairly present in all
material respects the financial  position of the Company as of the dates thereof
and the  results of its  operations  and cash flows for the  periods  then ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments).  Except as listed in Schedule  3(f),  the Company has  received no
notices or  correspondence  from the SEC since January 1, 2001.  The SEC has not
commenced enforcement proceedings against the Company or any of its affiliates.

         (g) Absence of Certain  Changes.  Except as disclosed in Schedule 3(g),
since  September  30,  2001,  there has been no material  adverse  change in the
business, properties,  operations,  financial condition or results of operations
of the Company or its  Subsidiaries.  The  Company has not taken any steps,  and
does not currently expect to take any steps, to seek protection  pursuant to any
bankruptcy  law  nor  does  the  Company  or any of its  Subsidiaries  have  any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy proceedings.

         (h)  Absence  of  Litigation.  There is no  action,  suit,  proceeding,
inquiry  or  investigation  before or by any  court,  public  board,  government
agency, self-regulatory organization or body pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened against or affecting the Company,
the Common Stock or any of the Company's Subsidiaries or any of the Company's or
the Company's  Subsidiaries'  officers or directors in their capacities as such,
which is reasonably  likely to have a Material  Adverse Effect. A description of
each action, suit, proceeding,  inquiry or investigation before or by any court,
public board, government agency,  self-regulatory organization or body which, as
of the date of this  Agreement,  is pending or threatened in writing  against or
affecting the Company, the Common Stock or any of the Company's  Subsidiaries or
any of the  Company's or the  Company's  Subsidiaries'  officers or directors in
their capacities as such, is set forth in Schedule 3(h).

         (i) Acknowledgment  Regarding Buyer's Status. The Company  acknowledges
and  agrees  that the Buyer is acting  solely in the  capacity  of arm's  length
purchaser  with  respect  to the  Transaction  Documents  and  the  transactions
contemplated hereby and thereby. The Company further acknowledges that the Buyer
is not acting as a  financial  advisor or  fiduciary  of the  Company (or in any
similar capacity) with respect to the Transaction Documents and the transactions
contemplated  hereby and thereby and any advice given by the Buyer or any of its
representatives  or agents in connection with the Transaction  Documents and the
transactions contemplated hereby and thereby is merely incidental to the Buyer's
purchase of the Securities. The Company further represents to the Buyer that the
Company's decision to enter into the Transaction Documents has been based solely
on the  independent  evaluation  by the  Company  and  its  representatives  and
advisors.

                                       10


         (j) No  General  Solicitation.  Neither  the  Company,  nor  any of its
affiliates,  nor any person  acting on its or their  behalf,  has engaged in any
form of general  solicitation  or general  advertising  (within  the  meaning of
Regulation  D under  the 1933 Act) in  connection  with the offer or sale of the
Securities.

          (k) Dilutive Effect. The Company understands and acknowledges that the
number of Purchase Shares purchasable under this Agreement is not fixed and will
vary  depending on the Purchase  Price at which such shares are  purchased.  The
Company further  acknowledges that its obligation to issue Purchase Shares under
this Agreement in accordance  with the terms and  conditions  hereof is absolute
and unconditional  regardless of the dilutive effect that such issuance may have
on the ownership interests of other shareholders of the Company.

         (l) Intellectual  Property Rights. The Company and its Subsidiaries own
or possess  rights or  licenses to use all  material  trademarks,  trade  names,
service  marks,  service mark  registrations,  service  names,  patents,  patent
rights,    copyrights,    inventions,    licenses,    approvals,    governmental
authorizations,  trade secrets and rights  necessary to conduct their respective
businesses as now conducted.  Except as set forth on Schedule 3(l),  none of the
Company's  material  trademarks,   trade  names,  service  marks,  service  mark
registrations,  service names, patents, patent rights,  copyrights,  inventions,
licenses,   approvals,   government  authorizations,   trade  secrets  or  other
intellectual  property  rights have expired or terminated,  or, by the terms and
conditions thereof,  could expire or terminate within two years from the date of
this  Agreement.  The Company and its  Subsidiaries do not have any knowledge of
any infringement by the Company or its  Subsidiaries of any material  trademark,
trade name rights, patents,  patent rights,  copyrights,  inventions,  licenses,
service names, service marks, service mark registrations,  trade secret or other
similar  rights of others,  or of any such  development  of similar or identical
trade  secrets or technical  information  by others and,  except as set forth on
Schedule  3(l),  there is no claim,  action or proceeding  being made or brought
against, or to the Company's knowledge, being threatened against, the Company or
its  Subsidiaries  regarding  trademark,  trade name,  patents,  patent  rights,
invention,  copyright,  license,  service  names,  service  marks,  service mark
registrations,  trade secret or other  infringement,  which could  reasonably be
expected to have a Material Adverse Effect.

         (m)  Environmental  Laws. The Company and its  Subsidiaries  (i) are in
compliance with any and all applicable  foreign,  federal,  state and local laws
and  regulations  relating to the  protection  of human  health and safety,  the
environment  or  hazardous  or  toxic   substances  or  wastes,   pollutants  or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable  Environmental Laws to conduct
their  respective  businesses  and  (iii) are in  compliance  with all terms and
conditions of any such permit, license or approval, except where, in each of the
three  foregoing  clauses,  the  failure to so comply  could not  reasonably  be
expected to have, individually or in the aggregate, a Material Adverse Effect.

                                       11


         (n) Title.  The Company and its  Subsidiaries  have good and marketable
title in fee simple to all real  property and good and  marketable  title to all
personal property owned by them which is material to the business of the Company
and its Subsidiaries, in each case free and clear of all liens, encumbrances and
defects  except  such  as are  described  in  Schedule  3(n)  or  such as do not
materially  affect the value of such property and do not interfere  with the use
made and  proposed  to be made of such  property  by the  Company and any of its
Subsidiaries.  Any real property and facilities  held under lease by the Company
and any of its  Subsidiaries  are  held  by them  under  valid,  subsisting  and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such  property and buildings by the
Company and its Subsidiaries.

         (o) Insurance.  The Company and each of its Subsidiaries are insured by
insurers of recognized  financial  responsibility  against such losses and risks
and in such  amounts as  management  of the  Company  believes to be prudent and
customary  in the  businesses  in which the  Company  and its  Subsidiaries  are
engaged.  Neither  the  Company  nor any such  Subsidiary  has been  refused any
insurance  coverage  sought or applied  for and neither the Company nor any such
Subsidiary  has any  reason  to  believe  that it will not be able to renew  its
existing  insurance  coverage  as and when such  coverage  expires  or to obtain
similar  coverage  from  similar  insurers as may be  necessary  to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise,  or the earnings,  business or operations of the Company
and its Subsidiaries, taken as a whole.

         (p) Regulatory  Permits.  The Company and its Subsidiaries  possess all
material  certificates,  authorizations  and permits  issued by the  appropriate
federal,  state or foreign  regulatory  authorities  necessary to conduct  their
respective  businesses,  and neither the  Company  nor any such  Subsidiary  has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

         (q) Tax Status.  The Company and each of its  Subsidiaries  has made or
filed all federal and state income and all other  material tax returns,  reports
and declarations required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its  Subsidiaries  has set aside
on its books  provisions  reasonably  adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental  assessments and
charges  that are  material  in amount,  shown or  determined  to be due on such
returns,  reports and  declarations,  except those being contested in good faith
and has set aside on its books provision  reasonably adequate for the payment of
all taxes for periods  subsequent to the periods to which such returns,  reports
or declarations  apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any  jurisdiction,  and the officers of the
Company know of no basis for any such claim.


                                       12


         (r) Transactions With Affiliates.  Except as set forth on Schedule 3(r)
and other than the grant or  exercise  of stock  options  disclosed  on Schedule
3(c), none of the officers,  directors, or employees of the Company is presently
a party to any transaction  with the Company or any of its  Subsidiaries  (other
than for services as employees, officers and directors), including any contract,
agreement or other  arrangement  providing for the  furnishing of services to or
by,  providing for rental of real or personal  property to or from, or otherwise
requiring payments to or from any officer,  director or such employee or, to the
knowledge of the Company, any corporation, partnership, trust or other entity in
which any  officer,  director,  or any such  employee  has an  interest or is an
officer, director, trustee or partner.

         (s) Application of Takeover  Protections.  The Company and its board of
directors have taken or will take prior to the  Commencement  Date all necessary
action, if any, in order to render  inapplicable any control share  acquisition,
business  combination,  poison pill (including any  distribution  under a rights
agreement) or other similar  anti-takeover  provision  under the  Certificate of
Incorporation  or the laws of the state of its  incorporation  which is or could
become  applicable to the Buyer as a result of the transactions  contemplated by
this Agreement,  including,  without  limitation,  the Company's issuance of the
Securities and the Buyer's ownership of the Securities.

         (t) Foreign  Corrupt  Practices.  Neither the  Company,  nor any of its
Subsidiaries,  nor any director, officer, agent, employee or other person acting
on behalf of the  Company or any of its  Subsidiaries  has, in the course of its
actions  for, or on behalf of, the  Company,  used any  corporate  funds for any
unlawful contribution,  gift,  entertainment or other unlawful expenses relating
to  political  activity;  made any direct or  indirect  unlawful  payment to any
foreign or  domestic  government  official  or employee  from  corporate  funds;
violated  or is in  violation  of any  provision  of the  U.S.  Foreign  Corrupt
Practices Act of 1977, as amended; or made any unlawful bribe,  rebate,  payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.


         4.       COVENANTS.

         (a) Filing of  Registration  Statement.  The Company  shall by no later
than June 1, 2002,  file a new  registration  statement  covering the sale of at
least  10,000,000  Purchase Shares and the Commitments  Share. The Buyer and its
counsel  shall have a  reasonable  opportunity  to review and comment  upon such
registration  statement  or  amendment to such  registration  statement  and any
related  prospectus  prior to its filing with the SEC.  Buyer shall  furnish all
information  reasonably  requested  by the Company for  inclusion  therein.  The
Company  shall use its best  efforts  to have  such  registration  statement  or
amendment declared effective by the SEC at the earliest possible date.


                                       13


         (b) Blue Sky. The Company shall,  on or before the  Commencement  Date,
take such action, if any, as the Company shall reasonably determine is necessary
in order to obtain an exemption for or to qualify the Commitment  Shares and the
Purchase  Shares  for  sale  to the  Buyer  pursuant  to  this  Agreement  under
applicable securities or "Blue Sky" laws of the states of the United States, and
shall  provide  evidence of any such action so taken to the Buyer on or prior to
the  Commencement  Date. The Company shall make all filings and reports relating
to the offer and sale of the Commitment  Shares and the Purchase Shares required
under  applicable  securities  or "Blue  Sky" laws of the  states of the  United
States following the Commencement Date.

         (c) Notice of Variable Priced Financing.  The Company agrees to provide
to the Buyer prior  written  notice  ("Equity  Financing  Notice") of any equity
financing  (including  any debt  financing  with an equity  component)  that the
Company intends to enter into involving the issuance of any equity securities of
the Company or any Subsidiary or securities  convertible or exchangeable into or
for  equity  securities  of  the  Company  or  any  Subsidiary  (including  debt
securities with an equity component) which, in any case (i) are convertible into
or exchangeable for an indeterminate  number of shares of common stock, (ii) are
convertible  into or exchangeable  for Common Stock at a price which varies with
the market price of the Common Stock,  (iii) directly or indirectly  provide for
any "re-set" or adjustment of the purchase  price,  conversion  rate or exercise
price  after the  issuance of the  security,  or (iv)  contain any  "make-whole"
provision  based upon,  directly or  indirectly,  the market price of the Common
Stock after the issuance of the security,  in each case,  other than  reasonable
and customary  anti-dilution  adjustments for issuance of shares of Common Stock
at a price  which is below the market  price of the Common  Stock.  Such  Equity
Financing  Notice shall be delivered to the Buyer five (5) Trading Days prior to
the Company entering into definitive  documentation  with respect to such equity
financing,  together  with  copies  of  all  proposed  definitive  documentation
relating to such equity financing.

         (d) Listing.  The Company  shall on or prior to the  Commencement  Date
secure the listing of all of the Purchase Shares and Commitment Shares upon each
national  securities exchange and automated quotation system, if any, upon which
shares of Common Stock are then listed  (subject to official notice of issuance)
and shall  maintain,  so long as any other  shares of Common  Stock  shall be so
listed, such listing of all such securities from time to time issuable under the
terms of the  Transaction  Documents.  The  Company  shall  maintain  the Common
Stock's authorization for quotation on the Principal Market. Neither the Company
nor any of its  Subsidiaries  shall  take any action  that  would be  reasonably
expected to result in the  delisting  or  suspension  of the Common Stock on the
Principal  Market.  The Company shall  promptly,  and in no event later than the
following  Trading  Day,  provide to the Buyer copies of any notices it receives
from the Principal  Market  regarding the  continued  eligibility  of the Common
Stock for listing on such automated quotation system or securities exchange. The
Company  shall pay all fees and  expenses  in  connection  with  satisfying  its
obligations under this Section.


                                       14


         (e)  Limitation  on Short  Sales and  Hedging  Transactions.  The Buyer
agrees that  beginning on the date of this  Agreement  and ending on the date of
termination of this  Agreement as provided in Section  11(k),  the Buyer and its
agents,  representatives and affiliates shall not in any manner whatsoever enter
into or effect,  directly or  indirectly,  any (i) "short sale" (as such term is
defined  in Rule  3b-3  of the  1934  Act) of the  Common  Stock,  (ii)  hedging
transaction,  or (iii) any similar  transaction,  which  establishes a net short
position with respect to the Common Stock, (as such term is defined in Rule 3b-3
of the 1934 Act).

         (f) Issuance of  Commitment  Shares;  Limitation on Sales of Commitment
Shares.  Immediately  upon the  execution of this  Agreement,  the Company shall
issue to the Buyer  300,000  shares of Common  Stock  (the  "Initial  Commitment
Shares").  In connection  with each purchase of Purchase Shares  hereunder,  the
Company  agrees to issue to the Buyer a number  of shares of Common  Stock  (the
"Additional  Commitment Shares" and together with the Initial Commitment Shares,
the  "Commitment  Shares")  equal  to the  product  of (x)  300,000  and (y) the
Purchase Amount Fraction.  The "Purchase Amount Fraction" shall mean a fraction,
the  numerator  of which is the  Purchase  Amount  purchased  by the Buyer  with
respect to such  purchase of  Purchase  Shares and the  denominator  of which is
Fifteen Million Dollars ($15,000,000). The Additional Commitment Shares shall be
equitably adjusted for any reorganization,  recapitalization, non-cash dividend,
stock split or other similar transaction. The Initial Commitment Shares shall be
issued in  certificated  form and  (subject to Section 5 hereof)  shall bear the
following restrictive legend:

         "THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  HAVE  NOT  BEEN
         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE
         STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT
         AND MAY NOT BE OFFERED FOR SALE,  SOLD,  TRANSFERRED OR ASSIGNED IN THE
         ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
         THE SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE STATE SECURITIES
         LAWS, OR AN OPINION OF COUNSEL, IN A FORM REASONABLY  ACCEPTABLE TO THE
         COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
         STATE  SECURITIES  LAWS OR UNLESS SOLD  PURSUANT TO RULE 144 UNDER SAID
         ACT."

           The Buyer  agrees  that the  Buyer  shall  not  transfer  or sell the
Commitment  Shares  until the earlier of 600 Trading  Days (30 Monthly  Periods)
from the  date  hereof  or date on which  this  Agreement  has been  terminated,
provided,  however,  that such  restrictions  shall not apply: (i) in connection
with any transfers to or among  affiliates (as defined in the 1934 Act), or (ii)
if an Event of Default has  occurred,  or any event which,  after notice  and/or
lapse of time,  would become an Event of Default,  including  any failure by the
Company to timely issue Purchase  Shares under this  Agreement.  Notwithstanding
the forgoing, the Buyer may transfer Commitment Shares to a third party in order
to settle a sale  made by the Buyer  where  the  Buyer  reasonably  expects  the
Company to deliver  Purchase Shares to the Buyer under this Agreement so long as
the Buyer  maintains  ownership of the same  overall  number of shares of Common
Stock by "replacing" the Commitment  Shares so transferred  with Purchase Shares
when the Purchase Shares are actually issued by the Company to the Buyer.

                                       15


         (g) Expense Reimbursement.  As reimbursement of the Buyer's expenses in
connection with the transactions  contemplated hereby, the Company agrees to pay
to the Buyer,  immediately  upon the  execution  of this  Agreement,  the sum of
$20,000 as the expense  reimbursement  of the Investor's  expenses in connection
with consummation of the transaction,  including any due diligence  expenses and
legal fees.

          (h) Due Diligence.  The Buyer shall have the right,  from time to time
as the  Buyer  may  reasonably  deem  appropriate,  to  perform  reasonable  due
diligence  on the Company  during  normal  business  hours.  The Company and its
officers and employees shall  reasonably  cooperate with the Buyer in connection
with any reasonable request by the Buyer related to the Buyer's due diligence of
the Company.


         5.       TRANSFER AGENT INSTRUCTIONS.

         On the  Commencement  Date,  the Company  shall  cause any  restrictive
legend on the Initial  Commitment  Shares to be removed and all of the  Purchase
Shares and Additional Commitment Shares, to be issued under this Agreement shall
be issued without any restrictive  legend.  The Company shall issue  irrevocable
instructions to the Transfer Agent, and any subsequent  transfer agent, to issue
Purchase  Shares  in  the  name  of the  Buyer  for  the  Purchase  Shares  (the
"Irrevocable  Transfer Agent  Instructions").  The Company warrants to the Buyer
that no  instruction  other than the  Irrevocable  Transfer  Agent  Instructions
referred  to in this  Section 5, will be given by the  Company  to the  Transfer
Agent with respect to the Purchase Shares and that the Commitment Shares and the
Purchase Shares shall otherwise be freely  transferable on the books and records
of the  Company  as and to  the  extent  provided  in  this  Agreement  and  the
Registration  Rights Agreement  subject to the provisions of Section 4(f) in the
case of the Commitment Shares.


         6.       CONDITIONS TO THE COMPANY'S OBLIGATION TO COMMENCE
                  SALES OF SHARES OF COMMON STOCK.

         The  obligation  of the  Company  hereunder  to  commence  sales of the
Purchase  Shares  is  subject  to the  satisfaction  of  each  of the  following
conditions  on or before the  Commencement  Date (the date that sales begin) and
once such  conditions  have been  initially  satisfied,  there  shall not be any
ongoing  obligation  to  satisfy  such  conditions  after the  Commencement  has
occurred;  provided that these conditions are for the Company's sole benefit and
may be waived by the Company at any time in its sole discretion by providing the
Buyer with prior written notice thereof:

         (a) The Buyer shall have executed each of the Transaction Documents and
delivered the same to the Company  including the  Registration  Rights Agreement
substantially  in the  form  of  Exhibit  A  hereto  (the  "Registration  Rights
Agreement").


                                       16


         (b)  Subject  to  the  Company's   compliance   with  Section  4(a),  a
registration  statement covering the sale of all of the Commitment Shares and at
least  10,000,000  Purchase Shares shall have been declared  effective under the
1933 Act by the SEC and no stop order with respect to the Registration Statement
shall be pending or threatened by the SEC.

         (c) The  representations  and warranties of the Buyer shall be true and
correct  in  all  material  respects  as of the  date  when  made  and as of the
Commencement  Date as though made at that time (except for  representations  and
warranties  that  speak  as of a  specific  date),  and  the  Buyer  shall  have
performed,  satisfied and complied in all material  respects with the covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Buyer at or prior to the Commencement Date.


         7.       CONDITIONS TO THE BUYER'S OBLIGATION TO COMMENCE
                  PURCHASES OF SHARES OF COMMON STOCK.

         The  obligation of the Buyer to commence  purchases of Purchase  Shares
under this  Agreement is subject to the  satisfaction  of each of the  following
conditions  on or before the  Commencement  Date (the date that sales begin) and
once such  conditions  have been  initially  satisfied,  there  shall not be any
ongoing  obligation  to  satisfy  such  conditions  after the  Commencement  has
occurred;  provided that these  conditions  are for the Buyer's sole benefit and
may be waived by the Buyer at any time in its sole  discretion  by providing the
Company with prior written notice thereof:

         (a) The Company shall have executed each of the  Transaction  Documents
and delivered the same to the Buyer including the Registration  Rights Agreement
substantially in the form of Exhibit A hereto.

         (b) The Company  shall have issued to the Buyer the Initial  Commitment
Shares and shall have removed any  restrictive  transfer legend from the Initial
Commitment Shares.

         (c) The Common Stock shall be authorized for quotation on the Principal
Market, trading in the Common Stock shall not have been within the last 365 days
suspended by the SEC or the  Principal  Market and the  Purchase  Shares and the
Commitment Shares shall be approved for listing upon the Principal Market.

         (d) The Buyer shall have received the opinions of the  Company's  legal
counsel dated as of the Commencement Date substantially in the form of Exhibit B
attached hereto.

         (e) The representations and warranties of the Company shall be true and
correct  in all  material  respects  (except  to the  extent  that  any of  such
representations and warranties is already qualified as to materiality in Section
3 above, in which case, such  representations  and warranties  shall be true and
correct  without further  qualification)  as of the date when made and as of the
Commencement  Date as though made at that time (except for  representations  and
warranties  that  speak  as of a  specific  date)  and the  Company  shall  have
performed, satisfied and complied with the covenants,  agreements and conditions


                                       17


required by the  Transaction  Documents to be  performed,  satisfied or complied
with by the Company at or prior to the  Commencement  Date. The Buyer shall have
received a  certificate,  executed by the CEO,  President or CFO of the Company,
dated as of the Commencement  Date, to the foregoing effect in the form attached
hereto as Exhibit C.

         (f)  The  Board  of  Directors  of  the  Company   shall  have  adopted
resolutions  in the form  attached  hereto as  Exhibit D which  shall be in full
force  and  effect  without  any  amendment  or  supplement  thereto  as of  the
Commencement Date.

         (g) As of the Commencement Date, the Company shall have reserved out of
its  authorized  and  unissued  Common  Stock,  (A)  solely  for the  purpose of
effecting purchases of Purchase Shares hereunder,  at least 10,000,000 shares of
Common Stock and (B) as Additional  Commitment Shares in accordance with Section
4(f) hereof, 300,000 shares of Common Stock.

         (h) The Irrevocable Transfer Agent Instructions,  in form acceptable to
the Buyer  shall  have been  delivered  to and  acknowledged  in  writing by the
Company and the Company's Transfer Agent.

         (i) The  Company  shall  have  delivered  to the  Buyer  a  certificate
evidencing  the  incorporation  and good standing of the Company in the State of
Nevada  issued  by the  Secretary  of State of the  State of Nevada as of a date
within ten (10) Trading Days of the Commencement Date.

         (j) The Company shall have  delivered to the Buyer a certified  copy of
the Certificate of  Incorporation  as certified by the Secretary of State of the
State of Nevada within ten (10) Trading Days of the Commencement Date.

         (k) The  Company  shall  have  delivered  to the  Buyer  a  secretary's
certificate  executed  by  the  Secretary  of  the  Company,  dated  as  of  the
Commencement Date, in the form attached hereto as Exhibit E.

         (l) A registration statement covering the sale of all of the Commitment
Shares  and at  least  10,000,000  Purchase  Shares  shall  have  been  declared
effective  under the 1933 Act by the SEC and no stop order  with  respect to the
registration  statement  shall be pending or  threatened by the SEC. The Company
shall have  prepared and delivered to the Buyer a final form of prospectus to be
used by the Buyer in connection  with any sales of any Commitment  Shares or any
Purchase  Shares.  The Company shall have made all filings under all  applicable
federal and state  securities  laws  necessary to consummate the issuance of the
Commitment  Shares  and  the  Purchase  Shares  pursuant  to this  Agreement  in
compliance with such laws.

         (m) No Event of Default has occurred,  or any event which, after notice
and/or lapse of time, would become an Event of Default has occurred.


                                       18


         (n) On or prior to the  Commencement  Date,  the Company shall take all
necessary action, if any, and such actions as reasonably requested by the Buyer,
in  order  to  render  inapplicable  any  control  share  acquisition,  business
combination,  shareholder rights plan or poison pill (including any distribution
under a rights  agreement) or other similar  anti-takeover  provision  under the
Certificate of Incorporation or the laws of the state of its incorporation which
is or could  become  applicable  to the  Buyer as a result  of the  transactions
contemplated by this Agreement,  including,  without  limitation,  the Company's
issuance of the Securities and the Buyer's ownership of the Securities.


         8.       INDEMNIFICATION.

         In  consideration  of  the  Buyer's   execution  and  delivery  of  the
Transaction  Documents and acquiring the Securities hereunder and in addition to
all of the Company's  other  obligations  under the Transaction  Documents,  the
Company shall defend, protect,  indemnify and hold harmless the Buyer and all of
its  affiliates,  shareholders,  officers,  directors,  employees  and direct or
indirect   investors  and  any  of  the  foregoing   person's  agents  or  other
representatives  (including,  without  limitation,  those retained in connection
with  the  transactions  contemplated  by  this  Agreement)  (collectively,  the
"Indemnitees")  from and against any and all actions,  causes of action,  suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith  (irrespective of whether any such Indemnitee is a party to
the  action  for which  indemnification  hereunder  is  sought),  and  including
reasonable  attorneys' fees and disbursements  (the "Indemnified  Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any  misrepresentation  or breach of any  representation or warranty made by the
Company in the  Transaction  Documents or any other  certificate,  instrument or
document  contemplated  hereby  or  thereby,  (b) any  breach  of any  covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby, or
(c) any cause of action,  suit or claim brought or made against such  Indemnitee
and arising out of or resulting  from the  execution,  delivery,  performance or
enforcement of the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby,  other than with respect to Indemnified
Liabilities  which  directly and primarily  result from the gross  negligence or
willful  misconduct  of  the  Indemnitee.  To  the  extent  that  the  foregoing
undertaking  by the Company  may be  unenforceable  for any reason,  the Company
shall make the maximum  contribution to the payment and  satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law.


         9.       EVENTS OF DEFAULT.

         An "Event of Default"  shall be deemed to have  occurred at any time as
any of the following events occurs:


                                       19


         (a) while any  registration  statement  is  required  to be  maintained
effective  pursuant  to the  terms of the  Registration  Rights  Agreement,  the
effectiveness of such registration  statement lapses for any reason  (including,
without limitation, the issuance of a stop order) or is unavailable to the Buyer
for sale of all of the  Registrable  Securities (as defined in the  Registration
Rights  Agreement)  in  accordance  with the  terms of the  Registration  Rights
Agreement,  and such lapse or unavailability  continues for a period of ten (10)
consecutive  Trading  Days or for more than an  aggregate of thirty (30) Trading
Days in any 365-day period;

         (b) the  suspension  from  trading or failure of the Common Stock to be
listed on the Principal Market for a period of ten (10) consecutive Trading Days
or for more than an aggregate of thirty (30) Trading Days in any 365-day period;

         (c) the  delisting  of the  Company's Common  Stock from  the Principal
Market;

         (d) the failure for any reason by the Transfer  Agent to issue Purchase
Shares to the Buyer within five (5) Trading Days after the  applicable  Purchase
Date which the Buyer is entitled to receive  (subject to the Company's  right to
cure such Event of Default upon 5 Trading Days' written notice from the Buyer to
the Company in respect thereof) ;

         (e) if at any time after the  Commencement  Date, the "Exchange Cap" is
reached (the  "Exchange Cap" shall be deemed to be reached at such time if, upon
submission  of a Purchase  Notice  under this  Agreement,  the  issuance of such
shares of Common  Stock would exceed that number of shares of Common Stock which
the Company may issue  under this  Agreement  without  breaching  the  Company's
obligations under the rules or regulations of the Principal Market);

         (f) the Company  breaches  any  representation,  warranty,  covenant or
other term or condition under any Transaction Document if such breach could have
a  Material  Adverse  Effect and  except,  in the case of a breach of a covenant
which is reasonably  curable,  only if such breach  continues for a period of at
least ten (10) Trading Days;

         (g)  any  payment   default  under  any  contract   whatsoever  or  any
acceleration  prior  to  maturity  of  any  mortgage,   indenture,  contract  or
instrument  under  which there may be issued or by which there may be secured or
evidenced  any  indebtedness  for money  borrowed  by the  Company  or for money
borrowed the  repayment  of which is  guaranteed  by the  Company,  whether such
indebtedness or guarantee now exists or shall be created hereafter,  which, with
respect to any such payment  default or  acceleration  prior to maturity,  is in
excess of $1,000,000,  provided however,  that with respect to any trade payable
incurred in the  ordinary  course,  no Event of Default  shall be deemed to have
occurred  until  an  adjudication  of such  default  is  entered  by a court  of
competent jurisdiction;

         (h) if any Person  commences a proceeding  against the Company pursuant
to or within the meaning of any Bankruptcy Law;

                                       20


         (i) if the Company  pursuant to or within the meaning of any Bankruptcy
Law; (A) commences a voluntary  case,  (B) consents to the entry of an order for
relief against it in an involuntary  case, (C) consents to the  appointment of a
Custodian of it or for all or  substantially  all of its  property,  (D) makes a
general assignment for the benefit of its creditors,  (E) becomes insolvent,  or
(F) is generally unable to pay its debts as the same become due; or

         (j) a court of competent  jurisdiction  enters an order or decree under
any  Bankruptcy Law that (A) is for relief against the Company in an involuntary
case, (B) appoints a Custodian of the Company or for all or substantially all of
its property, or (C) orders the liquidation of the Company or any Subsidiary.

In addition  to any other  rights and  remedies  under  applicable  law and this
Agreement, including the Buyer termination rights under Section 11(k) hereof, so
long as an Event of Default  has  occurred  and is  continuing,  or if any event
which, after notice and/or lapse of time, would become an Event of Default,  has
occurred  and is  continuing,  or so long as the  Purchase  Price is  below  the
Purchase Price Floor, the Buyer shall not be obligated to purchase any shares of
Common Stock under this  Agreement.  If pursuant to or within the meaning of any
Bankruptcy Law, the Company commences a voluntary case or any Person commences a
proceeding  against the Company, a Custodian is appointed for the Company or for
all or  substantially  all of its  property,  or the  Company  makes  a  general
assignment for the benefit of its creditors,  (any of which would be an Event of
Default as described  in Sections  9(h),  9(i) and 9(j)  hereof) this  Agreement
shall  automatically  terminate  without any liability or payment to the Company
without  further  action or notice by any Person.  No such  termination  of this
Agreement  under  Section  11(k)(i)  shall  affect the  Company's or the Buyer's
obligations  under this  Agreement  with  respect to pending  purchases  and the
Company and the Buyer shall complete their  respective  obligations with respect
to any pending purchases under this Agreement.


         10.      CERTAIN DEFINED TERMS.

         For  purposes of this  Agreement,  the  following  terms shall have the
following meanings:

         (a)  "1933 Act" means the Securities Act of 1933, as amended.

         (b)  "Available   Amount"  means  initially   Fifteen  Million  Dollars
($15,000,000)  in the  aggregate  which  amount shall be reduced by the Purchase
Amount each time the Buyer purchases  shares of Common Stock pursuant to Section
1 hereof.

         (c) "Bankruptcy  Law" means Title 11, U.S. Code, or any similar federal
or state law for the relief of debtors.

         (d) "Closing  Sale Price" means,  for any security as of any date,  the
last closing trade price for such  security on the Principal  Market as reported
by  Bloomberg,  or,  if the  Principal  Market is not the  principal  securities
exchange or trading  market for such  security,  the last closing trade price of
such security on the principal  securities exchange or trading market where such
security is listed or traded as reported by Bloomberg.

                                       21


         (e) "Custodian" means any receiver,  trustee,  assignee,  liquidator or
similar official under any Bankruptcy Law.

         (f) "Daily Base Amount" means  initially  Twenty Five Thousand  Dollars
($25,000) per Trading Day,  which amount may be increased or decreased from time
to time pursuant to Section 1(c) hereof.

         (g) "Floor  Price"  means  initially  $0.75 per share of Common  Stock,
which amount may be increased of decreased from time to time pursuant to Section
1(d)(iii)  hereof,  except  that in no case  shall the Floor  Price be less than
$0.50 per share of Common Stock without the prior written consent of the Buyer.

         (h) "Maturity Date" means the date that is 600 Trading Days (30 Monthly
Periods) from the Commencement  Date which such date may be extended by up to an
additional Six (6) Monthly Periods by the Company,  in its sole  discretion,  by
written notice to the Buyer.

         (i)  "Monthly  Base  Amount"  means  Five  Hundred   Thousand   Dollars
($500,000) per Monthly Period.

         (j)   "Monthly  Period" means  each  successive 20  Trading  Day period
commencing  with the  Commencement Date.

         (k) "Original  Daily Base Amount"  means Twenty Five  Thousand  Dollars
($25,000) per Trading Day.

         (l)  "Person"  means an  individual  or entity  including  any  limited
liability  company, a partnership,  a joint venture, a corporation,  a trust, an
unincorporated  organization  and a  government  or  any  department  or  agency
thereof.

         (m) "Principal Market" means The Nasdaq National Market.

         (n) "Purchase  Amount" means the portion of the Available  Amount to be
purchased by the Buyer pursuant to Section 1 hereof.

         (o)  "Purchase  Date"  means the  actual  date that the Buyer is to buy
Purchase Shares pursuant to Section 1 hereof.

         (p) "Purchase Price" means, as of any date of  determination  the lower
of the  (A)  the  lowest  Sale  Price  of the  Common  Stock  on  such  date  of
determination  and (B) the  arithmetic  average of the three (3) lowest  Closing
Sale Prices for the Common  Stock during the ten (10)  consecutive  Trading Days
ending on the Trading Day immediately  preceding such date of determination  (to
be appropriately  adjusted for any  reorganization,  recapitalization,  non-cash
dividend, stock split or other similar transaction).

         (q) "Sale  Price"  means,  for any  security as of any date,  any trade
price for such security on the Principal Market as reported by Bloomberg, or, if
the Principal Market is not the principal  securities exchange or trading market
for such security,  the trade price of such security on the principal securities
exchange or trading  market where such  security is listed or traded as reported
by Bloomberg.

                                       22


         (r) "SEC" means the United States Securities and Exchange Commission.

         (s) "Trading Day" means any day on which the  Principal  Market is open
for customary trading.


         11.      MISCELLANEOUS.

         (a) Governing Law; Jurisdiction;  Jury Trial. The corporate laws of the
State of Nevada shall govern all issues  concerning  the relative  rights of the
Company and its shareholders.  All other questions  concerning the construction,
validity,  enforcement  and  interpretation  of this  Agreement  and  the  other
Transaction  Documents  shall be governed by the  internal  laws of the State of
Illinois,  without  giving  effect  to any  choice  of law  or  conflict  of law
provision or rule (whether of the State of Illinois or any other  jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of  Illinois.  Each party  hereby  irrevocably  submits  to the  exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago, for
the  adjudication  of any  dispute  hereunder  or under  the  other  Transaction
Documents  or in  connection  herewith  or  therewith,  or with any  transaction
contemplated  hereby or discussed herein,  and hereby  irrevocably  waives,  and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or  proceeding  is  brought in an  inconvenient  forum or that the venue of such
suit,  action or proceeding is improper.  Each party hereby  irrevocably  waives
personal  service of process and  consents to process  being  served in any such
suit,  action or  proceeding  by  mailing a copy  thereof  to such  party at the
address for such notices to it under this Agreement and agrees that such service
shall  constitute  good and  sufficient  service of process and notice  thereof.
Nothing  contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,  A JURY TRIAL FOR THE ADJUDICATION
OF ANY  DISPUTE  HEREUNDER  OR IN  CONNECTION  HEREWITH  OR ARISING  OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

         (b)  Counterparts.  This  Agreement  may be  executed  in  two or  more
identical  counterparts,  all of  which  shall  be  considered  one and the same
agreement and shall become effective when  counterparts have been signed by each
party and  delivered to the other  party;  provided  that a facsimile  signature
shall be  considered  due  execution  and shall be  binding  upon the  signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

         (c) Headings.  The headings of this  Agreement are for  convenience  of
reference  and shall not form part of, or affect  the  interpretation  of,  this
Agreement.

         (d)  Severability.  If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction,  such invalidity or unenforceability shall
not affect the validity or  enforceability of the remainder of this Agreement in
that  jurisdiction  or the validity or  enforceability  of any provision of this
Agreement in any other jurisdiction.

                                       23


         (e) Entire  Agreement;  Amendments.  With the  exception  of the Mutual
Nondisclosure  Agreement  between the parties dated as of October 10, 2001, this
Agreement  supersedes  all other  prior oral or written  agreements  between the
Buyer,  the Company,  their  affiliates  and persons acting on their behalf with
respect  to  the  matters  discussed  herein,  and  this  Agreement,  the  other
Transaction  Documents and the instruments  referenced herein contain the entire
understanding  of the parties  with  respect to the matters  covered  herein and
therein and,  except as  specifically  set forth herein or therein,  neither the
Company  nor  the  Buyer  makes  any  representation,   warranty,   covenant  or
undertaking with respect to such matters.  No provision of this Agreement may be
amended  other than by an  instrument  in writing  signed by the Company and the
Buyer,  and no  provision  hereof may be waived other than by an  instrument  in
writing signed by the party against whom enforcement is sought.

         (f) Notices.  Any notices,  consents,  waivers or other  communications
required or permitted to be given under the terms of this  Agreement  must be in
writing  and will be deemed  to have  been  delivered:  (i) upon  receipt,  when
delivered  personally;  (ii)  upon  receipt,  when sent by  facsimile  (provided
confirmation of transmission  is  mechanically or  electronically  generated and
kept on file by the sending party);  or (iii) one Trading Day after deposit with
a  nationally  recognized  overnight  delivery  service,  in each case  properly
addressed to the party to receive the same. The addresses and facsimile  numbers
for such communications shall be:

         If to the Company:
                  PurchasePro.com, Inc.
                  7710 W. Cheyenne Ave.
                  Las Vegas, NV 89129
                  Telephone:        702-316-7000
                  Facsimile:        702-316-7691
                  Attention:        Chief Financial Officer

         With a copy to:
                  Brobeck Phleger & Harrison LLP
                  12390 El Camino Real
                  San Diego, California 92139
                  Telephone:        858-720-2595
                  Facsimile:        858-720-2555
                  Attention:        Michael S. Kagnoff

         If to the Buyer:
                  Fusion Capital Fund II, LLC
                  222 Merchandise Mart Plaza, Suite 9-112
                  Chicago, IL 60654
                  Telephone:        312-644-6644
                  Facsimile:        312-644-6244
                  Attention:        Steven G. Martin


                                       24


         If to the Transfer Agent:
                  ChaseMellon Shareholder Services
                  400 South Hope Street, 4th Floor
                  Los Angeles, CA 90071
                  Telephone:        213-553-9724
                  Facsimile:        213-553-9735
                  Attention:        Ray Torres

or at such other address and/or facsimile number and/or to the attention of such
other person as the  recipient  party has  specified by written  notice given to
each other  party  three (3)  Trading  Days prior to the  effectiveness  of such
change.  Written  confirmation  of receipt  (A) given by the  recipient  of such
notice,   consent,   waiver  or  other   communication,   (B)   mechanically  or
electronically  generated by the sender's facsimile machine containing the time,
date, and recipient facsimile number or (C) provided by a nationally  recognized
overnight  delivery service,  shall be rebuttable  evidence of personal service,
receipt by facsimile or receipt from a nationally  recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.

         (g)  Successors and Assigns.  This Agreement  shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
The  Company  shall not  assign  this  Agreement  or any  rights or  obligations
hereunder without the prior written consent of the Buyer, including by merger or
consolidation.
The Buyer may not assign its rights or obligations under this Agreement.

         (h) No Third Party  Beneficiaries.  This  Agreement is intended for the
benefit of the parties  hereto and their  respective  permitted  successors  and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

         (i)  Publicity.  The  Buyer  shall  have the  right to  approve  before
issuance  any press  releases  or any other  public  disclosure  (including  any
filings  with the SEC) with  respect to the  transactions  contemplated  hereby;
provided,  however,  that the  Company  shall be  entitled,  without  the  prior
approval  of any Buyer,  to make any press  release or other  public  disclosure
(including  any filings  with the SEC) with respect to such  transactions  as is
required  by  applicable  law and  regulations  (although  the  Buyer  shall  be
consulted  by the  Company in  connection  with any such press  release or other
public  disclosure  prior  to its  release  and  shall be  provided  with a copy
thereof).

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


                                       25


         (k) Termination. This Agreement may be terminated only as follows:

                  (i) By the Buyer any time an Event of Default  exists  without
         any  liability  or payment to the Company.  However,  if pursuant to or
         within the  meaning of any  Bankruptcy  Law,  the  Company  commences a
         voluntary  case  or any  Person  commences  a  proceeding  against  the
         Company,  a  Custodian  is  appointed  for  the  Company  or for all or
         substantially  all of its  property,  or the  Company  makes a  general
         assignment for the benefit of its creditors,  (any of which would be an
         Event of Default as described in Sections  9(h),  9(i) and 9(j) hereof)
         this Agreement shall  automatically  terminate without any liability or
         payment to the Company  without further action or notice by any Person.
         No such termination of this Agreement under this Section 11(k)(i) shall
         affect the Company's or the Buyer's  obligations  under this  Agreement
         with respect to pending  purchases  and the Company and the Buyer shall
         complete  their  respective  obligations  with  respect to any  pending
         purchases under this Agreement.

                  (ii)  In the  event  that  the  Commencement  shall  not  have
         occurred, the Company shall have the option to terminate this Agreement
         for any reason or for no reason  without  liability of any party to any
         other party.

                  (iii)  In the  event  that  the  Commencement  shall  not have
         occurred on or before  August 31,  2002,  due to the failure to satisfy
         the  conditions set forth in Sections 6 and 7 above with respect to the
         Commencement  (and the  nonbreaching  party's  failure  to  waive  such
         unsatisfied condition(s)), the nonbreaching party shall have the option
         to  terminate  this  Agreement at the close of business on such date or
         thereafter without liability of any party to any other party.

                  (iv) If by the Maturity Date (including any extension  thereof
         by the Company pursuant to Section 10(g) hereof), for any reason or for
         no reason the full  Available  Amount under this Agreement has not been
         purchased as provided for in Section 1 of this Agreement,  by the Buyer
         without any liability or payment to the Company.

                  (v) At any time after the Commencement Date, the Company shall
         have the option to terminate  this  Agreement  for any reason or for no
         reason by  delivering  notice (a "Company  Termination  Notice") to the
         Buyer  electing to terminate  this  Agreement  without any liability or
         payment to the  Buyer.  The  Company  Termination  Notice  shall not be
         effective  until one (1) Trading Day after it has been  received by the
         Buyer.

                  (vi) This Agreement shall automatically  terminate on the date
         that the Company sells and the Buyer purchases  Fifteen Million Dollars
         ($15,000,000) as provided  herein,  without any action or notice on the
         part of any party.

Except as set forth in Sections 11(k)(i) in respect of an Event of Default under
Sections 9(h),  9(i) and 9(j), and 11(k)(vi),  any termination of this Agreement
pursuant to this  Section  11(k)  shall be  effected by written  notice from the
Company to the Buyer,  or the Buyer to the Company,  as the case may be, setting
forth the basis for the termination  hereof. The  representations and warranties

                                       26


of the  Company  and  the  Buyer  contained  in  Sections  2 and 3  hereof,  the
indemnification  provisions set forth in Section 8 hereof and the agreements and
covenants  set forth in Section  11,  shall  survive  the  Commencement  and any
termination of this Agreement. No termination of this Agreement shall affect the
Company's  or the  Buyer's  obligations  under this  Agreement  with  respect to
pending  purchases and the Company and the Buyer shall complete their respective
obligations with respect to any pending purchases under this Agreement.

         (l) No  Financial  Advisor,  Placement  Agent,  Broker or  Finder.  The
Company  represents  and  warrants  to the  Buyer  that it has not  engaged  any
financial  advisor,  placement  agent,  broker or finder in connection  with the
transactions  contemplated  hereby.  The Buyer  represents  and  warrants to the
Company that it has not engaged any financial advisor,  placement agent,  broker
or finder in connection with the transactions contemplated hereby.

         (m) No Strict Construction. The language used in this Agreement will be
deemed to be the language  chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.

         (n) Remedies,  Other  Obligations,  Breaches and Injunctive Relief. The
Buyer's remedies  provided in this Agreement shall be cumulative and in addition
to all other remedies available to the Buyer under this Agreement,  at law or in
equity  (including  a decree of specific  performance  and/or  other  injunctive
relief),  no remedy of the Buyer  contained  herein  shall be deemed a waiver of
compliance  with the  provisions  giving rise to such remedy and nothing  herein
shall limit the Buyer's  right to pursue  actual  damages for any failure by the
Company to comply with the terms of this  Agreement.  The  Company  acknowledges
that a breach by it of its obligations  hereunder will cause irreparable harm to
the Buyer and that the remedy at law for any such breach may be inadequate.  The
Company  therefore  agrees that,  in the event of any such breach or  threatened
breach,  the  Buyer  shall be  entitled,  in  addition  to all  other  available
remedies,  to an  injunction  restraining  any breach,  without the necessity of
showing economic loss and without any bond or other security being required.

         (o)  Changes to the Terms of this  Agreement.  This  Agreement  and any
provision  hereof may only be amended by an instrument in writing  signed by the
Company and the Buyer. The term "Agreement" and all reference  thereto,  as used
throughout this instrument,  shall mean this instrument as originally  executed,
or if later amended or supplemented, then as so amended or supplemented.

         (p) Enforcement Costs. If: (i) this Agreement is placed by the Buyer in
the hands of an attorney for enforcement or is enforced by the Buyer through any
legal proceeding;  or (ii) an attorney is retained to represent the Buyer in any
bankruptcy,   reorganization,   receivership  or  other  proceedings   affecting
creditors'  rights  and  involving  a claim  under this  Agreement;  or (iii) an
attorney is retained to represent the Buyer in any other proceedings  whatsoever
in connection with this  Agreement,  then the Company shall pay to the Buyer, as
incurred by the Buyer,  all reasonable costs and expenses  including  attorneys'
fees  incurred in  connection  therewith,  in addition to all other  amounts due
hereunder.

         (q)  Failure  or  Indulgence  Not  Waiver.  No  failure or delay in the
exercise of any power,  right or privilege  hereunder  shall operate as a waiver
thereof,  nor shall any single or partial  exercise of any such power,  right or
privilege  preclude  other or further  exercise  thereof or of any other  right,
power or privilege.
                                    * * * * *

                                       27



         IN WITNESS  WHEREOF,  the Buyer and the Company have caused this Common
Stock Purchase Agreement to be duly executed as of the date first written above.



                                       THE COMPANY:

                                       PURCHASEPRO.COM, INC.

                                       By:   /s/ Richard Clemmer
                                           ---------------------
                                           Name: Richard Clemmer
                                           Title: Chief Executive Officer


                                       BUYER:

                                       FUSION CAPITAL FUND II, LLC
                                       BY: FUSION CAPITAL PARTNERS, LLC
                                       BY: SGM HOLDINGS CORP.

                                       By:  /s/ Steven G. Martin
                                            ---------------------
                                            Name: Steven G. Martin
                                            Title: President









                                       28



                                    SCHEDULES

Schedule 3(a)         Subsidiaries
Schedule 3(c)         Capitalization
Schedule 3(e)         Conflicts
Schedule 3(f)         1934 Act Filings
Schedule 3(g)         Material Changes
Schedule 3(h)         Litigation
Schedule 3(l)         Intellectual Property
Schedule 3(n)         Liens
Schedule 3(r)         Certain Transactions



                               EXHIBITS

Exhibit A             Form of Registration Rights Agreement
Exhibit B             Form of Company Counsel Opinion
Exhibit C             Form of Officer's Certificate
Exhibit D             Form of Resolutions of Board of Directors of the Company
Exhibit E             Form of Secretary's Certificate










                                       29




                              DISCLOSURE SCHEDULES


                          Schedule 3(a) - Subsidiaries


                         Schedule 3(c) - Capitalization


                          Schedule 3(e) - No Conflicts


                        Schedule 3(f) - 1934 Act Filings


                   Schedule 3(g) - Absence of Certain Changes


                           Schedule 3(h) - Litigation


                  Schedule 3(l) - Intellectual Property Rights


                              Schedule 3(n) - Title


                  Schedule 3(r) - Transactions with Affiliates













                                       30




                                    EXHIBIT A

                      FORM OF REGISTRATION RIGHTS AGREEMENT


[Sent separately]














                                       31



                                    EXHIBIT B

                         FORM OF COMPANY COUNSEL OPINION

         Capitalized terms used herein but not defined herein,  have the meaning
set forth in the Common Stock Purchase  Agreement.  Based on the foregoing,  and
subject to the assumptions and  qualifications  set forth herein,  we are of the
opinion that:

                  1. The Company is a corporation  existing and in good standing
under the laws of the State of _______.  The Company is qualified to do business
as a foreign corporation and is in good standing in the States of ________.

                  2. The Company has the corporate power to execute and deliver,
and perform its obligations  under,  each Transaction  Document to which it is a
party.  The Company has the  corporate  power to conduct its business as, to the
best of our knowledge,  it is now  conducted,  and to own and use the properties
owned and used by it.

                  3. The execution,  delivery and  performance by the Company of
the  Transaction  Documents to which it is a party have been duly  authorized by
all  necessary  corporate  action on the part of the Company.  The execution and
delivery of the  Transaction  Documents by the Company,  the  performance of the
obligations  of  the  Company  thereunder  and  the  consummation  by it of  the
transactions  contemplated therein have been duly authorized and approved by the
Company's Board of Directors and no further  consent,  approval or authorization
of the  Company,  its Board of Directors or its  stockholders  is required.  The
Transaction  Documents  to which the Company is a party have been duly  executed
and  delivered by the Company and are the valid and binding  obligations  of the
Company,  enforceable  against the Company in accordance with their terms except
as such  enforceability  may be  limited  by  general  principles  of  equity or
applicable bankruptcy,  insolvency,  liquidation or similar laws relating to, or
affecting creditor's rights and remedies.

                  4. The execution,  delivery and  performance by the Company of
the Transaction  Documents,  the consummation by the Company of the transactions
contemplated thereby including the offering, sale and issuance of the Commitment
Shares,  and the Purchase  Shares in accordance with the terms and conditions of
the Common Stock Purchase  Agreement,  and fulfillment and compliance with terms
of the  Transaction  Documents,  does not and  shall  not:  (i)  conflict  with,
constitute a breach of or default (or an event which,  with the giving of notice
or  lapse of time or  both,  constitutes  or  could  constitute  a  breach  or a
default),  under  (a) the  Certificate  of  Incorporation  or the  Bylaws of the
Company,  (b) any  material  agreement,  note,  lease,  mortgage,  deed or other
material instrument to which to our knowledge the Company is a party or by which
the Company or any of its assets are bound,  (ii) result in any violation of any
statute,  law,  rule or regulation  applicable  to the Company,  or (iii) to our
knowledge,  violate any order,  writ,  injunction  or decree  applicable  to the
Company or any of its subsidiaries.

                                       32


                  5. The issuance of the Purchase  Shares and Commitment  Shares
pursuant to the terms and conditions of the Transaction  Documents has been duly
authorized.  ________  shares of Common  Stock have been  properly  reserved for
issuance under the Common Stock Purchase Agreement.  When issued and paid for in
accordance with the Common Stock Purchase  Agreement,  the Purchase Shares shall
be validly issued, fully paid and non-assessable,  to our knowledge, free of all
taxes,  liens,  charges,  restrictions,  rights of first refusal and  preemptive
rights. ________ shares of Common Stock have been properly reserved for issuance
as Additional Commitment Shares under the Common Stock Purchase Agreement.  When
issued in accordance  with the Common Stock Purchase  Agreement,  the Additional
Commitment Shares shall be validly issued, fully paid and non-assessable, to our
knowledge,  free of all taxes,  liens,  charges,  restrictions,  rights of first
refusal and preemptive  rights. To our knowledge,  the execution and delivery of
the Registration  Rights Agreement do not, and the performance by the Company of
its  obligations  thereunder  shall  not,  give rise to any  rights of any other
person for the  registration  under the  Securities  Act of any shares of Common
Stock or other securities of the Company which have not been waived.

                  6. As of the date hereof,  the authorized capital stock of the
Company consists of _______ shares of common stock, par value $______ per share,
of which to our knowledge  __________ shares are issued and outstanding.  Except
as set forth on Schedule  3(c) of the Common Stock  Purchase  Agreement,  to our
knowledge,  there are no outstanding shares of capital stock or other securities
convertible  into or exchangeable or exercisable for shares of the capital stock
of the Company.

                  7.  Assuming  the  accuracy  of the  representations  and your
compliance  with the covenants  made by you in the  Transaction  Documents,  the
offering,  sale and  issuance of the  Commitment  Shares to you  pursuant to the
Transaction  Documents  is exempt from  registration  under the 1933 Act and the
securities laws and regulations of the State of _________.

                  8. Other than that which has been obtained and completed prior
to the date hereof, no authorization,  approval,  consent, filing or other order
of any federal or state governmental body,  regulatory agency, or stock exchange
or market, or any court, or, to our knowledge, any third party is required to be
obtained  by the Company to enter into and  perform  its  obligations  under the
Transaction  Documents or for the Company to issue and sell the Purchase  Shares
as contemplated by the Transaction Documents.

                  9. The Common Stock is registered pursuant to Section 12(g) of
the 1934 Act. To our  knowledge,  since January 1, 1999, the Company has been in
compliance with the reporting  requirements of the 1934 Act applicable to it. To
our  knowledge,  since January 1, 1999, the Company has not received any written
notice  from the  Principal  Market  stating  that the  Company  has not been in
compliance with any of the rules and regulations (including the requirements for
continued listing) of the Principal Market.


                                       33


         We further  advise you that to our  knowledge,  except as  disclosed on
Schedule 3(h) in the Common Stock Purchase Agreement,  there is no action, suit,
proceeding,  inquiry or  investigation  before or by any court,  public board or
body, any governmental  agency, any stock exchange or market, or self-regulatory
organization, which has been threatened in writing or which is currently pending
against the Company,  any of its subsidiaries,  any officers or directors of the
Company or any of its  subsidiaries  or any of the  properties of the Company or
any of its subsidiaries.

         In  addition,  we  have  participated  in the  preparation  of the  SEC
Documents and the Registration  Statement (SEC File #________) covering the sale
of the Purchase  Shares,  the Commitment  Shares  including the prospectus dated
____________,  contained  therein and in  conferences  with  officers  and other
representatives  of the Company (including the Company's  independent  auditors)
during which the contents of the SEC Documents,  the Registration  Statement and
related  matters were  discussed and reviewed  and,  although we are not passing
upon and do not assume any  responsibility  for the  accuracy,  completeness  or
fairness of the  statements  contained in the SEC Documents or the  Registration
Statement,  on the basis of the information  that was developed in the course of
the  performance of the services  referred to above,  considered in the light of
our  understanding  of the  applicable  law,  nothing came to our attention that
caused us to believe that the SEC Documents or the Registration Statement (other
than  the  financial  statements  and  schedules  and the  other  financial  and
statistical  data  included  therein,  as to which we express no belief),  as of
their dates,  contained  any untrue  statement of a material  fact or omitted to
state any material fact  necessary in order to make the statements  therein,  in
the light of the circumstances under which they were made, not misleading.









                                       34




                                    EXHIBIT C

                          FORM OF OFFICER'S CERTIFICATE

             This  Officer's  Certificate  ("Certificate")  is  being  delivered
pursuant to Section 7(e) of that certain Common Stock Purchase  Agreement  dated
as  of  _________,   ("Common  Stock  Purchase   Agreement"),   by  and  between
PURCHASEPRO.COM,  a Nevada corporation (the "Company"),  and FUSION CAPITAL FUND
II, LLC (the  "Buyer").  Terms used herein and not otherwise  defined shall have
the meanings ascribed to them in the Common Stock Purchase Agreement.

             The undersigned, ___________, ______________ of the Company, hereby
certifies as follows:

                  1. I am the ___________ of the Company and make the statements
          contained in this Certificate;

                  2. The  representations and warranties of the Company are true
         and correct in all material  respects (except to the extent that any of
         such   representations  and  warranties  is  already  qualified  as  to
         materiality  in Section 3 of the Common Stock  Purchase  Agreement,  in
         which case,  such  representations  and warranties are true and correct
         without further  qualification)  as of the date when made and as of the
         Commencement   Date  as   though   made  at  that  time   (except   for
         representations and warranties that speak as of a specific date);

                  3. The Company has  performed,  satisfied  and complied in all
         material respects with covenants, agreements and conditions required by
         the Transaction  Documents to be performed,  satisfied or complied with
         by the Company at or prior to the Commencement Date.

         IN WITNESS WHEREOF,  I have hereunder signed my name on this ___ day of
___________.

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

         The  undersigned  as  Secretary of  ________,  a ________  corporation,
hereby certifies that ___________ is the duly elected, appointed,  qualified and
acting  ________ of  _________  and that the  signature  appearing  above is his
genuine signature.

                                                     --------------------------
                                                     Secretary


                                       35



                                    EXHIBIT D

                           FORM OF COMPANY RESOLUTIONS

         WHEREAS,  there  has  been  presented  to the  Board  of  Directors  of
____________, (the "Corporation") a draft of the Common Stock Purchase Agreement
(the "Purchase  Agreement") by and among the Corporation and Fusion Capital Fund
II,  LLC  ("Fusion"),  providing  for the  purchase  by Fusion of up to  Fifteen
Million Dollars  ($15,000,000) of the Corporation's common stock, par value $___
(the "Common Stock"); and

         WHEREAS,  after careful  consideration of the Purchase  Agreement,  the
documents  incident  thereto and other factors  deemed  relevant by the Board of
Directors, the Board of Directors has determined that it is advisable and in the
best interests of the Corporation to engage in to  transactions  contemplated by
the Purchase Agreement.

                              Transaction Documents

         RESOLVED, that the transactions described in the Purchase Agreement are
hereby    approved   and    ____________________________________________    (the
"Authorized  Officers")  are  severally  authorized  to execute  and deliver the
Purchase Agreement,  and any other agreements or documents  contemplated thereby
including,   without   limitation,   a   registration   rights   agreement  (the
"Registration  Rights  Agreement")  providing  for the sale of the shares of the
Company's Common Stock issuable in respect of the Purchase  Agreement) on behalf
of the Corporation,  with such amendments,  changes,  additions and deletions as
the Authorized Officers may deem to be appropriate and approve on behalf of, the
Corporation,  such approval to be conclusively  evidenced by the signature of an
Authorized Officer thereon; and

         FURTHER  RESOLVED,  that the terms and  provisions of the  Registration
Rights Agreement by and among the Corporation and Fusion are hereby approved and
the Authorized  Officers are authorized to execute and deliver the  Registration
Rights Agreement  (pursuant to the terms of the Purchase  Agreement),  with such
amendments,  changes, additions and deletions as the Authorized Officer may deem
appropriate  and  approve  on behalf of, an  Corporation,  such  approval  to be
conclusively evidenced by the signature of an Authorized Officer thereon; and

         FURTHER RESOLVED, that the terms and provisions of the Form of Transfer
Agent Instructions (the  "Instructions")  are hereby approved and the Authorized
Officers are authorized to execute and deliver the Instructions (pursuant to the
terms of the Purchase Agreement),  with such amendments,  changes, additions and
deletions as the Authorized  Officers may deem appropriate and approve on behalf
of, the Corporation, such approval to be conclusively evidenced by the signature
of an Authorized Officer thereon; and


                                       36


                         Execution of Purchase Agreement

         FURTHER  RESOLVED,  that the Corporation be and it hereby is authorized
to execute the Purchase Agreement  providing for the purchase of common stock of
the Corporation having an aggregate value of up to $____________; and

                            Issuance of Common Stock

         FURTHER  RESOLVED,  that the Corporation is hereby  authorized to issue
the  Commitment  Shares (as defined in the Purchase  Agreement)  and that,  upon
issuance of the  Commitment  Shares  pursuant  to the  Purchase  Agreement,  the
Commitment  Shares  shall be duly  authorized,  validly  issued,  fully paid and
nonassessable with no personal liability attaching to the ownership thereof; and

         FURTHER   RESOLVED,   that  the  Corporation  shall  initially  reserve
__________  shares of Common Stock for issuance as Additional  Commitment Shares
under the Purchase Agreement.

         FURTHER  RESOLVED,  that the Corporation is hereby  authorized to issue
shares of Common  Stock upon the  purchase  of shares of Common  Stock up to the
available  amount  under the  Purchase  Agreement  (the  "Purchase  Shares")  in
accordance  with the terms of the Purchase  Agreement and that, upon issuance of
the Purchase Shares pursuant to the Purchase Agreement, the Purchase Shares will
be duly  authorized,  validly  issued,  fully  paid  and  nonassessable  with no
personal liability attaching to the ownership thereof; and

         FURTHER   RESOLVED,   that  the  Corporation  shall  initially  reserve
__________  shares of Common  Stock for  issuance as Purchase  Shares  under the
Purchase Agreement.

                             Registration Statement

         The  management of the  Corporation  has prepared an initial draft of a
Registration  Statement on Form ___ (the  "Registration  Statement") in order to
register the sale of the Purchase Shares,  the Commitment Shares  (collectively,
the "Shares"); and

         The Board of  Directors  has  determined  to approve  the  Registration
Statement and to authorize the  appropriate  officers of the Corporation to take
all such actions as they may deem appropriate to effect the offering; and

         NOW, THEREFORE,  BE IT RESOLVED, that the officers and directors of the
Corporation  be, and each of them hereby is,  authorized and directed,  with the
assistance of counsel and accountants for the Corporation,  to prepare,  execute
and file with the  Securities and Exchange  Commission  (the  "Commission")  the
Registration   Statement,   which   Registration   Statement   shall   be  filed
substantially in the form presented to the Board of Directors, with such changes
therein as the Chief Executive  Officer of the Corporation or any Vice President
of  the  Corporation  shall  deem  desirable  and in the  best  interest  of the
Corporation and its shareholders  (such officer's  execution  thereof  including
such changes shall be deemed to evidence conclusively such determination); and


                                       37


         FURTHER RESOLVED,  that the officers of the Corporation be, and each of
them hereby is,  authorized  and  directed,  with the  assistance of counsel and
accountants  for  the  Corporation,  to  prepare,  execute  and  file  with  the
Commission all amendments,  including post-effective amendments, and supplements
to the  Registration  Statement,  and  all  certificates,  exhibits,  schedules,
documents and other instruments relating to the Registration  Statement, as such
officers  shall deem  necessary or  appropriate  (such  officer's  execution and
filing thereof shall be deemed to evidence conclusively such determination); and

         FURTHER RESOLVED,  that the execution of the Registration Statement and
of any amendments and  supplements  thereto by the officers and directors of the
Corporation  be,  and  the  same  hereby  is,  specifically   authorized  either
personally or by the Authorized  Officers as such  officer's or director's  true
and lawful attorneys-in-fact and agents; and

         FURTHER RESOLVED, that the Authorized Officers are hereby is designated
as "Agent for Service" of the  Corporation in connection  with the  Registration
Statement  and the  filing  thereof  with  the  Commission,  and the  Authorized
Officers hereby are,  authorized to receive  communications and notices from the
Commission with respect to the Registration Statement; and

         FURTHER RESOLVED,  that the officers of the Corporation be, and each of
them hereby is, authorized and directed to pay all fees, costs and expenses that
may  be  incurred  by  the  Corporation  in  connection  with  the  Registration
Statement; and

         FURTHER RESOLVED,  that it is desirable and in the best interest of the
Corporation  that the  Shares be  qualified  or  registered  for sale in various
states;  that the  officers of the  Corporation  be, and each of them hereby is,
authorized to determine the states in which appropriate action shall be taken to
qualify  or  register  for sale all or such part of the  Shares as they may deem
advisable;  that said  officers  be, and each of them hereby is,  authorized  to
perform  on  behalf  of the  Corporation  any and all such acts as they may deem
necessary or advisable in order to comply with the  applicable  laws of any such
states, and in connection therewith to execute and file all requisite papers and
documents,  including, but not limited to, applications,  reports, surety bonds,
irrevocable  consents,  appointments  of  attorneys  for  service of process and
resolutions; and the execution by such officers of any such paper or document or
the doing by them of any act in  connection  with the  foregoing  matters  shall
conclusively  establish  their  authority  therefor from the Corporation and the
approval and  ratification  by the  Corporation  of the papers and  documents so
executed and the actions so taken; and

         FURTHER  RESOLVED,  that if, in any state  where the  securities  to be
registered or qualified for sale to the public,  or where the  Corporation is to
be registered in connection with the public offering of the Shares, a prescribed
form of  resolution  or  resolutions  is  required to be adopted by the Board of
Directors,  each such  resolution  shall be  deemed  to have been and  hereby is
adopted,  and the Secretary is hereby  authorized to certify the adoption of all
such resolutions as though such resolutions were now presented to and adopted by
the Board of Directors; and

                                       38


         FURTHER  RESOLVED,  that  the  officers  of the  Corporation  with  the
assistance of counsel be, and each of them hereby is, authorized and directed to
take all necessary  steps and do all other things  necessary and  appropriate to
effect the listing of the Shares on The Nasdaq National Market.

                               Approval of Actions

         RESOLVED, that, without limiting the foregoing, the Authorized Officers
are, and each of them hereby is, authorized and directed to proceed on behalf of
the Corporation  and to take all such steps as deemed  necessary or appropriate,
with the  advice  and  assistance  of  counsel,  to  cause  the  Corporation  to
consummate  the  agreements  referred to herein and to perform  its  obligations
under such agreements; and

         RESOLVED,  that the Authorized Officers be, and each of them hereby is,
authorized,  empowered  and  directed  on  behalf  of  and in  the  name  of the
Corporation,  to take or cause  to be taken  all  such  further  actions  and to
execute and  deliver or cause to be  executed  and  delivered  all such  further
agreements,   amendments,   documents,    certificates,    reports,   schedules,
applications,  notices,  letters and  undertakings and to incur and pay all such
fees and expenses as in their judgment  shall be necessary,  proper or desirable
to carry into  effect  the  purpose  and intent of any and all of the  foregoing
resolutions, and that all actions heretofore taken by any officer or director of
the  Corporation  in  connection  with  the  transactions  contemplated  by  the
agreements  described herein are hereby approved,  ratified and confirmed in all
respects.











                                       39



                                    EXHIBIT E

                         FORM OF SECRETARY'S CERTIFICATE

         This  Secretary's   Certificate   ("Certificate")  is  being  delivered
pursuant to Section 7(k) of that certain Common Stock Purchase  Agreement  dated
as  of  __________,   ("Common  Stock  Purchase  Agreement"),   by  and  between
PURCHASEPRO.COM,  INC., a Nevada  corporation (the "Company") and FUSION CAPITAL
FUND II, LLC (the "Buyer"),  pursuant to which the Company may sell to the Buyer
up to Fifteen Million Dollars  ($15,000,000)  of the Company's Common Stock, par
value $_____ per share (the "Common Stock"). Terms used herein and not otherwise
defined  shall have the meanings  ascribed to them in the Common Stock  Purchase
Agreement.

The  undersigned,  ____________,  Secretary of the Company,  hereby certifies as
follows:

                  1. I am the  Secretary of the Company and make the  statements
         contained in this Secretary's Certificate.

                  2.  Attached  hereto  as  Exhibit  A and  Exhibit  B are true,
         correct and complete  copies of the  Company's  bylaws  ("Bylaws")  and
         Certificate  of  Incorporation  ("Articles"),  in each case, as amended
         through the date  hereof,  and no action has been taken by the Company,
         its directors, officers or shareholders, in contemplation of the filing
         of any  further  amendment  relating  to or  affecting  the  Bylaws  or
         Articles.

                  3. Attached hereto as Exhibit C are true, correct and complete
         copies of the resolutions duly adopted by the Board of Directors of the
         Company  on  _____________,  at which a quorum was  present  and acting
         throughout.  Such  resolutions  have  not  been  amended,  modified  or
         rescinded and remain in full force and effect and such  resolutions are
         the only  resolutions  adopted by the Company's Board of Directors,  or
         any committee  thereof,  or the shareholders of the Company relating to
         or affecting (i) the entering into and  performance of the Common Stock
         Purchase Agreement, or the issuance,  offering and sale of the Purchase
         Shares and the  Commitment  Shares and (ii) and the  performance of the
         Company  of  its  obligation   under  the   Transaction   Documents  as
         contemplated therein.

                  4. As of the date hereof, the authorized,  issued and reserved
         capital stock of the Company is as set forth on Exhibit D hereto.



                                       40




                  IN WITNESS  WHEREOF,  I have hereunder  signed my name on this
___ day of ____________.
                                                                        
                                              -------------------------
                                                     Secretary


         The undersigned as ___________ of __________,  a ________  corporation,
hereby certifies that ____________ is the duly elected, appointed, qualified and
acting  Secretary of _________,  and that the signature  appearing  above is his
genuine signature.


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



                                       41