{"id":43359,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/common-stock-purchase-agreement-purchasepro-com-inc-and-fusion.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"common-stock-purchase-agreement-purchasepro-com-inc-and-fusion","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/common-stock-purchase-agreement-purchasepro-com-inc-and-fusion.html","title":{"rendered":"Common Stock Purchase Agreement &#8211; PurchasePro.com Inc. and Fusion Capital Fund II LLC"},"content":{"rendered":"<pre>                                                                  EXECUTION COPY\n\n\n                         COMMON STOCK PURCHASE AGREEMENT\n\n\n         COMMON STOCK PURCHASE AGREEMENT (the \"Agreement\"), dated as of December\n21,  2001 by and  between  PURCHASEPRO.COM,  INC.,  a  Nevada  corporation  (the\n\"Company\"),  and FUSION  CAPITAL  FUND II, LLC, an  Illinois  limited  liability\ncompany (the \"Buyer\").  Capitalized  terms used herein and not otherwise defined\nherein are defined in Section 10 hereof.\n\n\n         WHEREAS:\n\n         Subject to the terms and  conditions set forth in this  Agreement,  the\nCompany  wishes  to sell to the  Buyer,  and the  Buyer  wishes  to buy from the\nCompany,  up to Fifteen Million Dollars  ($15,000,000)  of the Company's  common\nstock,  par value  $0.01 per share (the  \"Common  Stock\").  The shares of Common\nStock to be  purchased  hereunder  (excluding  Commitment  Shares as  defined in\nSection 4(f) hereof) are referred to herein as the \"Purchase Shares.\"\n\n         NOW THEREFORE, the Company and the Buyer hereby agree as follows:\n\n         1.       PURCHASE OF COMMON STOCK.\n\n         Subject to the terms and  conditions  set forth in  Sections 6, 7 and 9\nbelow,  the Company  hereby  agrees to sell to the Buyer,  and the Buyer  hereby\nagrees to purchase from the Company, Purchase Shares as follows:\n\n         (a) Commencement of Purchases of Common Stock. The purchase and sale of\nPurchase  Shares  hereunder shall commence (the  \"Commencement\")  not later than\nfive (5) Trading  Days  following  the date of  satisfaction  (or waiver) of the\nconditions  to the  Commencement  set forth in  Sections  6 and 7 below (or such\nlater date as is mutually  agreed to by the Company and Buyer) (the date of such\nCommencement, the \"Commencement Date\").\n\n         (b) Buyer's Purchase Rights and  Obligations.  Subject to the Company's\nright to suspend  purchases  under  Section  1(d)(ii)  hereof,  the Buyer  shall\npurchase Purchase Shares on each Trading Day during each Monthly Period equal to\nthe Daily Base  Amount at the  Purchase  Price.  Within one (1)  Trading  Day of\nreceipt of Purchase  Shares,  the Buyer shall pay to the Company an amount equal\nto the Purchase  Amount with respect to such Purchase Shares as full payment for\nthe purchase of the Purchase Shares so received. The Company shall not issue any\nfraction  of a share of Common  Stock upon any  purchase.  All  Purchase  Shares\n(including  fractions  thereof)  issuable upon a purchase  under this  Agreement\nshall be  aggregated  for purposes of  determining  whether the  purchase  would\n\n\n                                       1\n\n\nresult in the issuance of a fraction of a share of Common  Stock.  If, after the\naforementioned  aggregation,  the  issuance  would  result in the  issuance of a\nfraction of a share of Common Stock,  the Company shall round such fraction of a\nshare of Common Stock up or down to the nearest  whole share.  All payments made\nunder  this  Agreement  shall be made in lawful  money of the  United  States of\nAmerica by check or wire transfer of immediately available funds to such account\nas the payee may from time to time  designate  by written  notice in  accordance\nwith the provisions of this Agreement.  Whenever any amount  expressed to be due\nby the terms of this Agreement is due on any day which is not a Trading Day, the\nsame shall instead be due on the next succeeding day which is a Trading Day.\n\n         (c)      Company's Right to Decrease or Increase the Daily Base Amount.\n\n                  (i)  Company's  Right to Decrease the Daily Base  Amount.  The\n         Company  shall always have the right at any time to decrease the amount\n         of the Daily Base Amount by  delivering  written  notice (a \"Daily Base\n         Amount  Decrease  Notice\") to the Buyer which notice shall  specify the\n         new Daily Base  Amount.  The  decrease in the Daily Base  Amount  shall\n         become  effective  one  Trading  Day after  receipt by the Buyer of the\n         Daily Base Amount  Decrease  Notice.  Any  purchases by the Buyer which\n         have a Purchase  Date on or prior to the first (1st)  Trading Day after\n         receipt by the Buyer of a Daily Base  Amount  Decrease  Notice  must be\n         honored by the Company as otherwise  provided  herein.  The decrease in\n         the Daily Base Amount shall remain in effect until the Company delivers\n         to the Buyer a Daily Base Amount Increase Notice (as defined below).\n\n                  (ii)  Company's  Right to Increase the Daily Base Amount.  The\n         Company  shall always have the right at any time to increase the amount\n         of the  Daily  Base  Amount up to the  Original  Daily  Base  Amount by\n         delivering  written  notice to the Buyer  stating the new amount of the\n         Daily Base  Amount (a \"Daily  Base  Amount  Increase  Notice\").  If the\n         Closing  Sale  Price  of the  Common  Stock  on  each of the  five  (5)\n         consecutive  Trading  Days  immediately  prior to a Daily  Base  Amount\n         Increase Notice is at least $4.00,  the Company shall have the right to\n         deliver a Daily Base Amount  Increase Notice which increases the amount\n         of the Daily Base Amount to any amount  above the  Original  Daily Base\n         Amount.  A Daily Base Amount  Increase  Notice shall be  effective  one\n         Trading Day after receipt by the Buyer.  Such increase in the amount of\n         the Daily Base Amount  shall  continue in effect  until the delivery to\n         the  Buyer of a Daily  Base  Amount  Decrease  Notice.  Notwithstanding\n         anything  to the  contrary,  if the Daily Base Amount then in effect is\n         greater than the  Original  Daily Base Amount and the Sale Price of the\n         Common Stock  during any Trading Day is less than $4.00,  the amount of\n         the Daily Base Amount shall be the  Original  Daily Base Amount or such\n         lesser  amount as  specified  by the  Company  in a Daily  Base  Amount\n         Decrease  Notice and any of the Buyer's  obligations to purchase shares\n         of Common  Stock in excess of the  Original  Daily Base Amount shall be\n         terminated.  Thereafter,  the  Company  shall  again  have the right to\n         increase  the amount of the Daily Base  Amount to any amount  above the\n         Original Daily Base Amount only if the Closing Sale Price of the Common\n         Stock is at least $4.00 on each of five (5)  consecutive  Trading Days.\n         Notwithstanding  the forgoing,  the Buyer shall  consider in good faith\n         any request by the Company to increase the Daily Base Amount regardless\n         of the Sale Price of the Common Stock.\n\n                                       2\n\n\n         (d)      Limitations on Purchases.\n\n                  (i) Limitation on Beneficial Ownership.  The Company shall not\n         effect any sale under this  Agreement  and the Buyer shall not have the\n         right to purchase  shares of Common  Stock under this  Agreement to the\n         extent that after giving  effect to such  purchase  the Buyer  together\n         with its  affiliates  would  beneficially  own in excess of 4.9% of the\n         outstanding  shares of the Common Stock  following such  purchase.  For\n         purposes  hereof,  the  number of shares of Common  Stock  beneficially\n         owned by the Buyer and its  affiliates or acquired by the Buyer and its\n         affiliates,  as the case may be, shall  include the number of shares of\n         Common  Stock  issuable  in  connection  with  a  purchase  under  this\n         Agreement  with respect to which the  determination  is being made, but\n         shall  exclude  the  number of shares of Common  Stock  which  would be\n         issuable  upon (1) a purchase of the remaining  Available  Amount which\n         has not been submitted for purchase,  and (2) exercise or conversion of\n         the unexercised or unconverted  portion of any other  securities of the\n         Company  (including,  without  limitation,  any warrants)  subject to a\n         limitation  on  conversion  or  exercise  analogous  to the  limitation\n         contained herein beneficially owned by the Buyer and its affiliates. If\n         the 4.9%  limitation  is ever reached the Company shall have the option\n         to increase such  limitation  to 9.9% by delivery of written  notice to\n         the Buyer.  Thereafter,  if the 9.9%  limitation  is ever  reached this\n         shall not effect or limit the Buyer's  obligation to purchase the Daily\n         Base Amount as otherwise  provided in this  Agreement  (i.e.  the Buyer\n         shall  continue to pay the Purchase  Price for Purchase  Shares but the\n         Company  shall not  issue,  and the  Buyer  shall  not be  entitled  to\n         receive, such applicable Purchase Shares until such time as, and to the\n         extent that, the Buyer is below the 9.9%  limitation).  For purposes of\n         this Section, in determining the number of outstanding shares of Common\n         Stock the Buyer may rely on the number of outstanding  shares of Common\n         Stock as reflected in (1) the  Company's  most recent Form 10-Q or Form\n         10-K, as the case may be, (2) a more recent public  announcement by the\n         Company or (3) any other  written  communication  by the Company or its\n         transfer  agent  setting  forth the  number  of shares of Common  Stock\n         outstanding.  Upon the reasonable written or oral request of the Buyer,\n         the Company shall  promptly  confirm orally and in writing to the Buyer\n         the number of shares of Common Stock then outstanding. In any case, the\n         number of outstanding  shares of Common Stock shall be determined after\n         giving effect to any purchases  under this Agreement by the Buyer since\n         the date as of which such number of outstanding  shares of Common Stock\n         was reported.  Except as otherwise  set forth  herein,  for purposes of\n         this Section  1(d)(i),  beneficial  ownership  shall be  determined  in\n         accordance  with Section 13(d) of the Securities  Exchange Act of 1934,\n         as amended.\n\n                  (ii) Company's Right to Suspend Purchases. The Company may, at\n         any time, give written notice (a \"Purchase  Suspension  Notice\") to the\n         Buyer  suspending  purchases of Purchase Shares by the Buyer under this\n         Agreement.  The Purchase  Suspension Notice shall be effective only for\n\n\n                                       3\n\n\n         purchases  that have a Purchase  Date later  than one (1)  Trading  Day\n         after  receipt of the  Purchase  Suspension  Notice by the  Buyer.  Any\n         purchase by the Buyer that has a Purchase Date on or prior to the first\n         (1st) Trading Day after  receipt by the Buyer of a Purchase  Suspension\n         Notice  from the Company  must be honored by the  Company as  otherwise\n         provided  herein.  Such purchase  suspension  shall  continue in effect\n         until a revocation in writing by the Company,  at its sole  discretion.\n         So long as a Purchase  Suspension Notice is in effect,  the Buyer shall\n         not be obligated to purchase any Purchase Shares from the Company under\n         Section 1 of this Agreement.\n\n                  (iii) Purchase Price Floor. The Buyer shall not have the right\n         or the obligation to purchase any Purchase  Shares under this Agreement\n         in the event that the  Purchase  Price for any  purchases  of  Purchase\n         Shares would be less than the Floor Price.  The Company may at any time\n         give written notice (a \"Floor Price Notice\") to the Buyer increasing or\n         decreasing  the Floor Price.  The Floor Price Notice shall be effective\n         only for purchases that have a Purchase Date later than one (1) Trading\n         Day after receipt of the Floor Price Notice by the Buyer.  Any purchase\n         by the Buyer that has a Purchase  Date on or prior to the first Trading\n         Day after  receipt of a Floor Price  Notice  from the  Company  must be\n         honored by the Company as otherwise provided herein.\n\n         (e) Records of Purchases. The Buyer and the Company shall each maintain\nrecords  showing the remaining  Available  Amount at any give time and the dates\nand  Purchase  Amounts  for each  purchase  or  shall  use  such  other  method,\nreasonably satisfactory to the Buyer and the Company.\n\n         (f) Taxes. The Company shall pay any and all transfer, stamp or similar\ntaxes that may be payable  with  respect to the  issuance  and  delivery  of any\nshares of Common Stock to the Buyer made under of this Agreement.\n\n         (g)  Compliance  with  Principal  Market  Rules.  The Company shall not\neffect any sale under this  Agreement  and the Buyer shall not have the right to\npurchase  shares of Common  Stock under this  Agreement to the extent that after\ngiving effect to such purchase the \"Exchange Cap\" shall be deemed to be reached.\nThe \"Exchange Cap\" shall be deemed to have been reached if, at any time prior to\nthe shareholders of the Company  approving the transaction  contemplated by this\nAgreement,  upon a purchase under this  Agreement,  the Purchase Shares issuable\npursuant to such purchase would,  together with all Purchase  Shares  previously\nissued under this Agreement,  exceed 19.9% of the  outstanding  shares of Common\nStock as of the date of this Agreement).  The Company may, but shall be under no\nobligation to, request its shareholders to approve the transaction  contemplated\nby this  Agreement.  The Company shall not be required or permitted to issue any\nshares of Common Stock under this  Agreement if such  issuance  would breach the\nCompany's obligations under the rules or regulations of the Principal Market.\n\n                                       4\n\n\n\n         2.       BUYER'S REPRESENTATIONS AND WARRANTIES.\n\n         The Buyer  represents  and  warrants to the Company that as of the date\nhereof and as of the Commencement Date:\n\n         (a) Investment  Purpose.  The Buyer is entering into this Agreement and\nacquiring  the  Commitment  Shares,  (as defined in Section 4(f)  hereof)  (this\nAgreement and the Commitment  Shares are collectively  referred to herein as the\n\"Securities\"),  for its own  account  for  investment  only  and not with a view\ntowards,  or for resale in  connection  with,  the public  sale or  distribution\nthereof;  provided however, by making the representations herein, the Buyer does\nnot agree to hold any of the Securities for any minimum or other specific term.\n\n         (b) Accredited  Investor Status. The Buyer is an \"accredited  investor\"\nas that term is defined in Rule 501(a)(3) of Regulation D.\n\n         (c) Reliance on Exemptions.  The Buyer  understands that the Securities\nare being  offered and sold to it in reliance  on specific  exemptions  from the\nregistration requirements of United States federal and state securities laws and\nthat the  Company  is relying  in part upon the truth and  accuracy  of, and the\nBuyer's   compliance   with,  the   representations,   warranties,   agreements,\nacknowledgments  and  understandings  of the Buyer set forth  herein in order to\ndetermine the  availability  of such exemptions and the eligibility of the Buyer\nto acquire the Securities.\n\n         (d)  Information.  The  Buyer  has been  furnished  with all  materials\nrelating to the business,  finances and  operations of the Company and materials\nrelating  to the offer  and sale of the  Securities  that  have been  reasonably\nrequested by the Buyer,  including,  without  limitation,  the SEC Documents (as\ndefined in Section 3(f) hereof).  The Buyer  understands  that its investment in\nthe Securities involves a high degree of risk. The Buyer (i) is able to bear the\neconomic risk of an investment in the  Securities  including a total loss,  (ii)\nhas such knowledge and  experience in financial and business  matters that it is\ncapable of  evaluating  the merits and risks of the proposed  investment  in the\nSecurities  and (iii) has had an  opportunity  to ask  questions  of and receive\nanswers from the officers of the Company concerning the financial  condition and\nbusiness of the  Company  and others  matters  related to an  investment  in the\nSecurities.  Neither such  inquiries nor any other due diligence  investigations\nconducted by the Buyer or its representatives  shall modify, amend or affect the\nBuyer's right to rely on the Company's  representations and warranties contained\nin Section 3 below. The Buyer has sought such  accounting,  legal and tax advice\nas it has  considered  necessary to make an informed  investment  decision  with\nrespect to its acquisition of the Securities.\n\n         (e) No Governmental Review. The Buyer understands that no United States\nfederal  or state  agency or any other  government  or  governmental  agency has\npassed on or made any  recommendation  or  endorsement  of the Securities or the\nfairness  or  suitability  of the  investment  in the  Securities  nor have such\nauthorities  passed  upon  or  endorsed  the  merits  of  the  offering  of  the\nSecurities.\n\n\n                                       5\n\n\n         (f) Transfer or Resale.  The Buyer  understands that except as provided\nin the Registration  Rights  Agreement (as defined in Section 6(a) hereof):  (i)\nthe Securities have not been and are not being  registered under the 1933 Act or\nany state securities  laws, and may not be offered for sale,  sold,  assigned or\ntransferred  unless (A) subsequently  registered  thereunder or (B) an exemption\nexists  permitting such Securities to be sold,  assigned or transferred  without\nsuch registration;  (ii) any sale of the Securities made in reliance on Rule 144\nmay be made only in accordance  with the terms of Rule 144 and further,  if Rule\n144 is not applicable, any resale of the Securities under circumstances in which\nthe seller (or the person  through whom the sale is made) may be deemed to be an\nunderwriter  (as that term is  defined in the 1933 Act) may  require  compliance\nwith some other exemption under the 1933 Act or the rules and regulations of the\nSEC thereunder;  and (iii) neither the Company nor any other person is under any\nobligation to register the Securities under the 1933 Act or any state securities\nlaws or to comply with the terms and conditions of any exemption thereunder.\n\n         (g)  Validity;  Enforcement.  This  Agreement has been duly and validly\nauthorized,  executed  and  delivered  on behalf of the Buyer and is a valid and\nbinding agreement of the Buyer enforceable  against the Buyer in accordance with\nits terms,  subject as to enforceability to general  principles of equity and to\napplicable bankruptcy, insolvency,  reorganization,  moratorium, liquidation and\nother  similar laws  relating to, or affecting  generally,  the  enforcement  of\napplicable creditors' rights and remedies.\n\n         (h) Residency. The Buyer is a resident of the State of Illinois.\n\n         (i) No Prior Short  Selling.  The Buyer  represents and warrants to the\nCompany  that at no time  prior  to the  date of this  Agreement  has any of the\nBuyer,  its agents,  associates,  representatives  or  affiliates  engaged in or\neffected, in any manner whatsoever, directly or indirectly, any (i) \"short sale\"\n(as such term is defined  in Rule 3b-3 of the 1934 Act) of the  Common  Stock or\n(ii) hedging transaction, which establishes a net short position with respect to\nthe Common Stock.\n\n\n         3.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.\n\n         The Company  represents  and  warrants to the Buyer that as of the date\nhereof and as of the Commencement Date:\n\n         (a) Organization and Qualification.  The Company and its \"Subsidiaries\"\n(which for  purposes of this  Agreement  means any entity in which the  Company,\ndirectly or indirectly, owns 50% or more of the voting stock or capital stock or\nother similar  equity  interests)  are  corporations  duly organized and validly\nexisting in good standing under the laws of the  jurisdiction  in which they are\nincorporated,  and have the requisite corporate power and authority to own their\nproperties  and to carry on their business as now being  conducted.  Each of the\nCompany and its  Subsidiaries  is duly qualified as a foreign  corporation to do\nbusiness and is in good standing in every jurisdiction in which its ownership of\nproperty or the nature of the business  conducted by it makes such qualification\nnecessary,  except to the extent  that the failure to be so  qualified  or be in\n\n\n                                       6\n\n\ngood  standing  could not  reasonably  be  expected  to have a Material  Adverse\nEffect. As used in this Agreement,  \"Material Adverse Effect\" means any material\nadverse  effect on any of: (i) the  business,  properties,  assets,  operations,\nresults  of   operations   or  financial   condition  of  the  Company  and  its\nSubsidiaries,  if any, taken as a whole, or (ii) the authority or ability of the\nCompany to perform its obligations  under the Transaction  Documents (as defined\nin Section 3(b) hereof).  The Company has no Subsidiaries except as set forth on\nSchedule 3(a).\n\n         (b)  Authorization;  Enforcement;  Validity.  (i) The  Company  has the\nrequisite   corporate  power  and  authority  to  enter  into  and  perform  its\nobligations  under this Agreement and to issue the Securities in accordance with\nthe terms hereof,  and shall have, as of the  Commencement  Date,  the requisite\ncorporate  power and authority to enter into and perform its  obligations  under\nthe  Registration  Rights Agreement (as defined in Section 6(a) hereof) and each\nof the other agreements entered into by the parties on the Commencement Date and\nattached hereto as exhibits to this Agreement  (collectively,  the  \"Transaction\nDocuments\"), and to issue the Securities in accordance with the terms hereof and\nthereof, (ii) the execution and delivery of the Agreement by the Company and the\nconsummation by it of the transactions  contemplated  hereby,  including without\nlimitation,  the  issuance  of the  Commitment  Shares and the  reservation  for\nissuance and the issuance of the Purchase  Shares and the Additional  Commitment\nShares issuable under this Agreement, have been duly authorized by the Company's\nBoard of Directors and no further  consent or  authorization  is required by the\nCompany,  its Board of  Directors  or its  shareholders  and the  execution  and\ndelivery of the Transaction  Documents (other than the Agreement) by the Company\nand the  consummation of the transactions  contemplated  thereby shall be, as of\nthe  Commencement  Date, duly authorized by the Company's Board of Directors and\nno further consent or authorization shall be required by the Company,  its Board\nof Directors or its shareholders,  (iii) this Agreement has been, and each other\nTransaction  Document  shall be on the  Commencement  Date,  duly  executed  and\ndelivered  by the Company and (iv) this  Agreement  constitutes,  and each other\nTransaction  Document  upon  its  execution  on  behalf  of the  Company,  shall\nconstitute, the valid and binding obligations of the Company enforceable against\nthe Company in accordance with their terms, except as such enforceability may be\nlimited by general  principles of equity or applicable  bankruptcy,  insolvency,\nreorganization,   moratorium,  liquidation  or  similar  laws  relating  to,  or\naffecting generally, the enforcement of creditors' rights and remedies.\n\n         (c) Capitalization. As of the date hereof, the authorized capital stock\nof the Company  consists of (i) 190.000,000  shares of Common Stock, of which as\nof the date hereof, 73,889,551 shares are issued and outstanding,  1,127,498 are\nheld as treasury shares, 23,500,000 shares are reserved for issuance pursuant to\nthe Company's stock option plans of which only  approximately  4,152,261  shares\nremain  available  and  3,994,446  shares are issuable and reserved for issuance\npursuant  to  securities  (other  than  stock  options  issued  pursuant  to the\nCompany's stock option plans)  exercisable or  exchangeable  for, or convertible\ninto, shares of Common Stock and (ii) 5,000,000 shares of Preferred Stock, $.001\npar value, of which as of the date hereof no shares are issued and  outstanding.\nAll of such  outstanding  shares have been, or upon  issuance  will be,  validly\nissued and are fully paid and  nonassessable.  Except as  disclosed  in Schedule\n3(c),  (i) no shares of the  Company's  capital  stock are subject to preemptive\n\n\n                                       7\n\n\nrights or any other  similar  rights or any liens or  encumbrances  suffered  or\npermitted by the Company,  (ii) there are no outstanding debt securities,  (iii)\nthere are no outstanding options, warrants, scrip, rights to subscribe to, calls\nor commitments of any character  whatsoever relating to, or securities or rights\nconvertible  into,  any  shares of  capital  stock of the  Company or any of its\nSubsidiaries, or contracts, commitments, understandings or arrangements by which\nthe  Company  or  any of  its  Subsidiaries  is or may  become  bound  to  issue\nadditional  shares of capital stock of the Company or any of its Subsidiaries or\noptions,  warrants,  scrip,  rights to subscribe to, calls or commitments of any\ncharacter  whatsoever relating to, or securities or rights convertible into, any\nshares of capital  stock of the Company or any of its  Subsidiaries,  (iv) there\nare  no  agreements  or  arrangements  under  which  the  Company  or any of its\nSubsidiaries is obligated to register the sale of any of their  securities under\nthe 1933 Act  (except  the  Registration  Rights  Agreement),  (v)  there are no\noutstanding  securities or instruments of the Company or any of its Subsidiaries\nwhich contain any redemption or similar provisions,  and there are no contracts,\ncommitments,  understandings  or arrangements by which the Company or any of its\nSubsidiaries  is or may become  bound to redeem a security of the Company or any\nof its  Subsidiaries,  (vi) there are no  securities or  instruments  containing\nanti-dilution  or similar  provisions  that will be triggered by the issuance of\nthe  Securities  as described in this  Agreement  and (vii) the Company does not\nhave any stock appreciation rights or \"phantom stock\" plans or agreements or any\nsimilar  plan or  agreement.  The  Company has  furnished  to the Buyer true and\ncorrect copies of the Company's Certificate of Incorporation,  as amended and as\nin effect on the date  hereof  (the  \"Certificate  of  Incorporation\"),  and the\nCompany's  By-laws,  as  amended  and as in  effect  on  the  date  hereof  (the\n\"By-laws\"),  and summaries of the terms of all  securities  convertible  into or\nexercisable for Common Stock, if any, and copies of any documents containing the\nmaterial rights of the holders thereof in respect thereto.\n\n         (d)  Issuance  of  Securities.  The  Commitment  Shares  have been duly\nauthorized  and,  upon  issuance  in  accordance  with  the  terms  hereof,  the\nCommitment Shares shall be (i) validly issued, fully paid and non-assessable and\n(ii) free from all taxes,  liens and charges with respect to the issue  thereof.\n10,000,000  shares of Common  Stock have been duly  authorized  and reserved for\nissuance  upon purchase  under this  Agreement.  300,000  shares of Common Stock\n(subject  to  equitable  adjustment  for any  reorganization,  recapitalization,\nnon-cash  dividend,  stock split or other  similar  transaction)  have been duly\nauthorized  and  reserved  for  issuance  as  Additional  Commitment  Shares  in\naccordance with Section 4(f) this Agreement. Upon issuance and payment therefore\nin  accordance  with the terms and  conditions of this  Agreement,  the Purchase\nShares shall be validly issued,  fully paid and  nonassessable and free from all\ntaxes,  liens and charges  with respect to the issue  thereof,  with the holders\nbeing entitled to all rights accorded to a holder of Common Stock.\n\n         (e) No Conflicts.  Except as disclosed in Schedule 3(e), the execution,\ndelivery and  performance  of the  Transaction  Documents by the Company and the\nconsummation by the Company of the transactions  contemplated hereby and thereby\n(including, without limitation, the reservation for issuance and issuance of the\nPurchase  Shares)  will not (i)  result in a  violation  of the  Certificate  of\nIncorporation,  any Certificate of  Designations,  Preferences and Rights of any\noutstanding  series of  preferred  stock of the  Company or the  By-laws or (ii)\nconflict  with,  or constitute a default (or an event which with notice or lapse\n\n\n                                       8\n\n\nof time or both would become a default)  under,  or give to others any rights of\ntermination,   amendment,   acceleration  or  cancellation  of,  any  agreement,\nindenture or  instrument  to which the Company or any of its  Subsidiaries  is a\nparty, or result in a violation of any law, rule, regulation, order, judgment or\ndecree  (including  federal and state  securities  laws and  regulations and the\nrules and regulations of the Principal  Market  applicable to the Company or any\nof its  Subsidiaries) or by which any property or asset of the Company or any of\nits Subsidiaries is bound or affected, except in the case of conflicts, defaults\nand  violations  under clause (ii),  which could not  reasonably  be expected to\nresult in a Material  Adverse  Effect.  Except as  disclosed  in Schedule  3(e),\nneither the Company nor its  Subsidiaries  is in  violation of any term of or in\ndefault under its Certificate of Incorporation,  any Certificate of Designation,\nPreferences  and  Rights of any  outstanding  series of  preferred  stock of the\nCompany or By-laws or their  organizational  charter or  by-laws,  respectively.\nExcept as  disclosed  in  Schedule  3(e),  neither  the  Company  nor any of its\nSubsidiaries  is in violation of any term of or is in default under any material\ncontract, agreement, mortgage,  indebtedness,  indenture,  instrument, judgment,\ndecree or order or any statute,  rule or regulation applicable to the Company or\nits  Subsidiaries,  except for possible  conflicts,  defaults,  terminations  or\namendments  which could not  reasonably  be expected to have a Material  Adverse\nEffect. The business of the Company and its Subsidiaries is not being conducted,\nand shall not be conducted,  in violation of any law,  ordinance,  regulation of\nany governmental entity, except for possible violations, the sanctions for which\neither individually or in the aggregate could not reasonably be expected to have\na Material Adverse Effect. Except as specifically contemplated by this Agreement\nand as required  under the 1933 Act or applicable  state  securities  laws,  the\nCompany is not  required to obtain any  consent,  authorization  or order of, or\nmake any filing or registration  with, any court or  governmental  agency or any\nregulatory  or  self-regulatory  agency in order for it to  execute,  deliver or\nperform  any  of its  obligations  under  or  contemplated  by  the  Transaction\nDocuments in accordance with the terms hereof or thereof. Except as disclosed in\nSchedule 3(e), all consents,  authorizations,  orders, filings and registrations\nwhich the Company is required to obtain pursuant to the preceding sentence shall\nbe obtained or effected on or prior to the Commencement  Date.  Except as listed\nin Schedule 3(e), the Company has received no notices or correspondence from the\nPrincipal  Market since January 1, 2001. The Principal  Market has not commenced\ndelisting proceedings against the Company.\n\n         (f)  SEC  Documents;  Financial  Statements.  Except  as  disclosed  in\nSchedule 3(f),  since January 1, 2000, the Company has timely filed all reports,\nschedules, forms, statements and other documents required to be filed by it with\nthe SEC pursuant to the reporting requirements of the Securities Exchange Act of\n1934, as amended (the \"1934 Act\") (all of the foregoing, whether timely filed or\nnot,  filed  prior to the date  hereof and all  exhibits  included  therein  and\nfinancial  statements  and  schedules  thereto  and  documents  incorporated  by\nreference therein being hereinafter  referred to as the \"SEC Documents\").  As of\ntheir  respective  dates (except as they have been correctly  amended),  the SEC\nDocuments  complied in all material  respects with the  requirements of the 1934\nAct and the rules and regulations of the SEC promulgated  thereunder  applicable\nto the SEC Documents, and none of the SEC Documents, at the time they were filed\nwith the SEC  (except as they may have been  properly  amended),  contained  any\n\n\n                                       9\n\n\nuntrue statement of a material fact or omitted to state a material fact required\nto be stated  therein or necessary in order to make the statements  therein,  in\nlight of the  circumstances  under which they were made, not  misleading.  As of\ntheir  respective  dates  (except  as they  have  been  properly  amended),  the\nfinancial statements of the Company included in the SEC Documents complied as to\nform in all material  respects with applicable  accounting  requirements and the\npublished rules and regulations of the SEC with respect thereto.  Such financial\nstatements have been prepared in accordance with generally  accepted  accounting\nprinciples, consistently applied, during the periods involved (except (i) as may\nbe otherwise indicated in such financial statements or the notes thereto or (ii)\nin the case of  unaudited  interim  statements,  to the extent  they may exclude\nfootnotes or may be condensed or summary  statements)  and fairly present in all\nmaterial respects the financial  position of the Company as of the dates thereof\nand the  results of its  operations  and cash flows for the  periods  then ended\n(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit\nadjustments).  Except as listed in Schedule  3(f),  the Company has  received no\nnotices or  correspondence  from the SEC since January 1, 2001.  The SEC has not\ncommenced enforcement proceedings against the Company or any of its affiliates.\n\n         (g) Absence of Certain  Changes.  Except as disclosed in Schedule 3(g),\nsince  September  30,  2001,  there has been no material  adverse  change in the\nbusiness, properties,  operations,  financial condition or results of operations\nof the Company or its  Subsidiaries.  The  Company has not taken any steps,  and\ndoes not currently expect to take any steps, to seek protection  pursuant to any\nbankruptcy  law  nor  does  the  Company  or any of its  Subsidiaries  have  any\nknowledge or reason to believe that its creditors intend to initiate involuntary\nbankruptcy proceedings.\n\n         (h)  Absence  of  Litigation.  There is no  action,  suit,  proceeding,\ninquiry  or  investigation  before or by any  court,  public  board,  government\nagency, self-regulatory organization or body pending or, to the knowledge of the\nCompany or any of its Subsidiaries, threatened against or affecting the Company,\nthe Common Stock or any of the Company's Subsidiaries or any of the Company's or\nthe Company's  Subsidiaries'  officers or directors in their capacities as such,\nwhich is reasonably  likely to have a Material  Adverse Effect. A description of\neach action, suit, proceeding,  inquiry or investigation before or by any court,\npublic board, government agency,  self-regulatory organization or body which, as\nof the date of this  Agreement,  is pending or threatened in writing  against or\naffecting the Company, the Common Stock or any of the Company's  Subsidiaries or\nany of the  Company's or the  Company's  Subsidiaries'  officers or directors in\ntheir capacities as such, is set forth in Schedule 3(h).\n\n         (i) Acknowledgment  Regarding Buyer's Status. The Company  acknowledges\nand  agrees  that the Buyer is acting  solely in the  capacity  of arm's  length\npurchaser  with  respect  to the  Transaction  Documents  and  the  transactions\ncontemplated hereby and thereby. The Company further acknowledges that the Buyer\nis not acting as a  financial  advisor or  fiduciary  of the  Company (or in any\nsimilar capacity) with respect to the Transaction Documents and the transactions\ncontemplated  hereby and thereby and any advice given by the Buyer or any of its\nrepresentatives  or agents in connection with the Transaction  Documents and the\ntransactions contemplated hereby and thereby is merely incidental to the Buyer's\npurchase of the Securities. The Company further represents to the Buyer that the\nCompany's decision to enter into the Transaction Documents has been based solely\non the  independent  evaluation  by the  Company  and  its  representatives  and\nadvisors.\n\n                                       10\n\n\n         (j) No  General  Solicitation.  Neither  the  Company,  nor  any of its\naffiliates,  nor any person  acting on its or their  behalf,  has engaged in any\nform of general  solicitation  or general  advertising  (within  the  meaning of\nRegulation  D under  the 1933 Act) in  connection  with the offer or sale of the\nSecurities.\n\n          (k) Dilutive Effect. The Company understands and acknowledges that the\nnumber of Purchase Shares purchasable under this Agreement is not fixed and will\nvary  depending on the Purchase  Price at which such shares are  purchased.  The\nCompany further  acknowledges that its obligation to issue Purchase Shares under\nthis Agreement in accordance  with the terms and  conditions  hereof is absolute\nand unconditional  regardless of the dilutive effect that such issuance may have\non the ownership interests of other shareholders of the Company.\n\n         (l) Intellectual  Property Rights. The Company and its Subsidiaries own\nor possess  rights or  licenses to use all  material  trademarks,  trade  names,\nservice  marks,  service mark  registrations,  service  names,  patents,  patent\nrights,    copyrights,    inventions,    licenses,    approvals,    governmental\nauthorizations,  trade secrets and rights  necessary to conduct their respective\nbusinesses as now conducted.  Except as set forth on Schedule 3(l),  none of the\nCompany's  material  trademarks,   trade  names,  service  marks,  service  mark\nregistrations,  service names, patents, patent rights,  copyrights,  inventions,\nlicenses,   approvals,   government  authorizations,   trade  secrets  or  other\nintellectual  property  rights have expired or terminated,  or, by the terms and\nconditions thereof,  could expire or terminate within two years from the date of\nthis  Agreement.  The Company and its  Subsidiaries do not have any knowledge of\nany infringement by the Company or its  Subsidiaries of any material  trademark,\ntrade name rights, patents,  patent rights,  copyrights,  inventions,  licenses,\nservice names, service marks, service mark registrations,  trade secret or other\nsimilar  rights of others,  or of any such  development  of similar or identical\ntrade  secrets or technical  information  by others and,  except as set forth on\nSchedule  3(l),  there is no claim,  action or proceeding  being made or brought\nagainst, or to the Company's knowledge, being threatened against, the Company or\nits  Subsidiaries  regarding  trademark,  trade name,  patents,  patent  rights,\ninvention,  copyright,  license,  service  names,  service  marks,  service mark\nregistrations,  trade secret or other  infringement,  which could  reasonably be\nexpected to have a Material Adverse Effect.\n\n         (m)  Environmental  Laws. The Company and its  Subsidiaries  (i) are in\ncompliance with any and all applicable  foreign,  federal,  state and local laws\nand  regulations  relating to the  protection  of human  health and safety,  the\nenvironment  or  hazardous  or  toxic   substances  or  wastes,   pollutants  or\ncontaminants (\"Environmental Laws\"), (ii) have received all permits, licenses or\nother approvals required of them under applicable  Environmental Laws to conduct\ntheir  respective  businesses  and  (iii) are in  compliance  with all terms and\nconditions of any such permit, license or approval, except where, in each of the\nthree  foregoing  clauses,  the  failure to so comply  could not  reasonably  be\nexpected to have, individually or in the aggregate, a Material Adverse Effect.\n\n                                       11\n\n\n         (n) Title.  The Company and its  Subsidiaries  have good and marketable\ntitle in fee simple to all real  property and good and  marketable  title to all\npersonal property owned by them which is material to the business of the Company\nand its Subsidiaries, in each case free and clear of all liens, encumbrances and\ndefects  except  such  as are  described  in  Schedule  3(n)  or  such as do not\nmaterially  affect the value of such property and do not interfere  with the use\nmade and  proposed  to be made of such  property  by the  Company and any of its\nSubsidiaries.  Any real property and facilities  held under lease by the Company\nand any of its  Subsidiaries  are  held  by them  under  valid,  subsisting  and\nenforceable leases with such exceptions as are not material and do not interfere\nwith the use made and proposed to be made of such  property and buildings by the\nCompany and its Subsidiaries.\n\n         (o) Insurance.  The Company and each of its Subsidiaries are insured by\ninsurers of recognized  financial  responsibility  against such losses and risks\nand in such  amounts as  management  of the  Company  believes to be prudent and\ncustomary  in the  businesses  in which the  Company  and its  Subsidiaries  are\nengaged.  Neither  the  Company  nor any such  Subsidiary  has been  refused any\ninsurance  coverage  sought or applied  for and neither the Company nor any such\nSubsidiary  has any  reason  to  believe  that it will not be able to renew  its\nexisting  insurance  coverage  as and when such  coverage  expires  or to obtain\nsimilar  coverage  from  similar  insurers as may be  necessary  to continue its\nbusiness at a cost that would not materially and adversely affect the condition,\nfinancial or otherwise,  or the earnings,  business or operations of the Company\nand its Subsidiaries, taken as a whole.\n\n         (p) Regulatory  Permits.  The Company and its Subsidiaries  possess all\nmaterial  certificates,  authorizations  and permits  issued by the  appropriate\nfederal,  state or foreign  regulatory  authorities  necessary to conduct  their\nrespective  businesses,  and neither the  Company  nor any such  Subsidiary  has\nreceived any notice of proceedings relating to the revocation or modification of\nany such certificate, authorization or permit.\n\n         (q) Tax Status.  The Company and each of its  Subsidiaries  has made or\nfiled all federal and state income and all other  material tax returns,  reports\nand declarations required by any jurisdiction to which it is subject (unless and\nonly to the extent that the Company and each of its  Subsidiaries  has set aside\non its books  provisions  reasonably  adequate for the payment of all unpaid and\nunreported taxes) and has paid all taxes and other governmental  assessments and\ncharges  that are  material  in amount,  shown or  determined  to be due on such\nreturns,  reports and  declarations,  except those being contested in good faith\nand has set aside on its books provision  reasonably adequate for the payment of\nall taxes for periods  subsequent to the periods to which such returns,  reports\nor declarations  apply. There are no unpaid taxes in any material amount claimed\nto be due by the taxing authority of any  jurisdiction,  and the officers of the\nCompany know of no basis for any such claim.\n\n\n                                       12\n\n\n         (r) Transactions With Affiliates.  Except as set forth on Schedule 3(r)\nand other than the grant or  exercise  of stock  options  disclosed  on Schedule\n3(c), none of the officers,  directors, or employees of the Company is presently\na party to any transaction  with the Company or any of its  Subsidiaries  (other\nthan for services as employees, officers and directors), including any contract,\nagreement or other  arrangement  providing for the  furnishing of services to or\nby,  providing for rental of real or personal  property to or from, or otherwise\nrequiring payments to or from any officer,  director or such employee or, to the\nknowledge of the Company, any corporation, partnership, trust or other entity in\nwhich any  officer,  director,  or any such  employee  has an  interest or is an\nofficer, director, trustee or partner.\n\n         (s) Application of Takeover  Protections.  The Company and its board of\ndirectors have taken or will take prior to the  Commencement  Date all necessary\naction, if any, in order to render  inapplicable any control share  acquisition,\nbusiness  combination,  poison pill (including any  distribution  under a rights\nagreement) or other similar  anti-takeover  provision  under the  Certificate of\nIncorporation  or the laws of the state of its  incorporation  which is or could\nbecome  applicable to the Buyer as a result of the transactions  contemplated by\nthis Agreement,  including,  without  limitation,  the Company's issuance of the\nSecurities and the Buyer's ownership of the Securities.\n\n         (t) Foreign  Corrupt  Practices.  Neither the  Company,  nor any of its\nSubsidiaries,  nor any director, officer, agent, employee or other person acting\non behalf of the  Company or any of its  Subsidiaries  has, in the course of its\nactions  for, or on behalf of, the  Company,  used any  corporate  funds for any\nunlawful contribution,  gift,  entertainment or other unlawful expenses relating\nto  political  activity;  made any direct or  indirect  unlawful  payment to any\nforeign or  domestic  government  official  or employee  from  corporate  funds;\nviolated  or is in  violation  of any  provision  of the  U.S.  Foreign  Corrupt\nPractices Act of 1977, as amended; or made any unlawful bribe,  rebate,  payoff,\ninfluence payment, kickback or other unlawful payment to any foreign or domestic\ngovernment official or employee.\n\n\n         4.       COVENANTS.\n\n         (a) Filing of  Registration  Statement.  The Company  shall by no later\nthan June 1, 2002,  file a new  registration  statement  covering the sale of at\nleast  10,000,000  Purchase Shares and the Commitments  Share. The Buyer and its\ncounsel  shall have a  reasonable  opportunity  to review and comment  upon such\nregistration  statement  or  amendment to such  registration  statement  and any\nrelated  prospectus  prior to its filing with the SEC.  Buyer shall  furnish all\ninformation  reasonably  requested  by the Company for  inclusion  therein.  The\nCompany  shall use its best  efforts  to have  such  registration  statement  or\namendment declared effective by the SEC at the earliest possible date.\n\n\n                                       13\n\n\n         (b) Blue Sky. The Company shall,  on or before the  Commencement  Date,\ntake such action, if any, as the Company shall reasonably determine is necessary\nin order to obtain an exemption for or to qualify the Commitment  Shares and the\nPurchase  Shares  for  sale  to the  Buyer  pursuant  to  this  Agreement  under\napplicable securities or \"Blue Sky\" laws of the states of the United States, and\nshall  provide  evidence of any such action so taken to the Buyer on or prior to\nthe  Commencement  Date. The Company shall make all filings and reports relating\nto the offer and sale of the Commitment  Shares and the Purchase Shares required\nunder  applicable  securities  or \"Blue  Sky\" laws of the  states of the  United\nStates following the Commencement Date.\n\n         (c) Notice of Variable Priced Financing.  The Company agrees to provide\nto the Buyer prior  written  notice  (\"Equity  Financing  Notice\") of any equity\nfinancing  (including  any debt  financing  with an equity  component)  that the\nCompany intends to enter into involving the issuance of any equity securities of\nthe Company or any Subsidiary or securities  convertible or exchangeable into or\nfor  equity  securities  of  the  Company  or  any  Subsidiary  (including  debt\nsecurities with an equity component) which, in any case (i) are convertible into\nor exchangeable for an indeterminate  number of shares of common stock, (ii) are\nconvertible  into or exchangeable  for Common Stock at a price which varies with\nthe market price of the Common Stock,  (iii) directly or indirectly  provide for\nany \"re-set\" or adjustment of the purchase  price,  conversion  rate or exercise\nprice  after the  issuance of the  security,  or (iv)  contain any  \"make-whole\"\nprovision  based upon,  directly or  indirectly,  the market price of the Common\nStock after the issuance of the security,  in each case,  other than  reasonable\nand customary  anti-dilution  adjustments for issuance of shares of Common Stock\nat a price  which is below the market  price of the Common  Stock.  Such  Equity\nFinancing  Notice shall be delivered to the Buyer five (5) Trading Days prior to\nthe Company entering into definitive  documentation  with respect to such equity\nfinancing,  together  with  copies  of  all  proposed  definitive  documentation\nrelating to such equity financing.\n\n         (d) Listing.  The Company  shall on or prior to the  Commencement  Date\nsecure the listing of all of the Purchase Shares and Commitment Shares upon each\nnational  securities exchange and automated quotation system, if any, upon which\nshares of Common Stock are then listed  (subject to official notice of issuance)\nand shall  maintain,  so long as any other  shares of Common  Stock  shall be so\nlisted, such listing of all such securities from time to time issuable under the\nterms of the  Transaction  Documents.  The  Company  shall  maintain  the Common\nStock's authorization for quotation on the Principal Market. Neither the Company\nnor any of its  Subsidiaries  shall  take any action  that  would be  reasonably\nexpected to result in the  delisting  or  suspension  of the Common Stock on the\nPrincipal  Market.  The Company shall  promptly,  and in no event later than the\nfollowing  Trading  Day,  provide to the Buyer copies of any notices it receives\nfrom the Principal  Market  regarding the  continued  eligibility  of the Common\nStock for listing on such automated quotation system or securities exchange. The\nCompany  shall pay all fees and  expenses  in  connection  with  satisfying  its\nobligations under this Section.\n\n\n                                       14\n\n\n         (e)  Limitation  on Short  Sales and  Hedging  Transactions.  The Buyer\nagrees that  beginning on the date of this  Agreement  and ending on the date of\ntermination of this  Agreement as provided in Section  11(k),  the Buyer and its\nagents,  representatives and affiliates shall not in any manner whatsoever enter\ninto or effect,  directly or  indirectly,  any (i) \"short sale\" (as such term is\ndefined  in Rule  3b-3  of the  1934  Act) of the  Common  Stock,  (ii)  hedging\ntransaction,  or (iii) any similar  transaction,  which  establishes a net short\nposition with respect to the Common Stock, (as such term is defined in Rule 3b-3\nof the 1934 Act).\n\n         (f) Issuance of  Commitment  Shares;  Limitation on Sales of Commitment\nShares.  Immediately  upon the  execution of this  Agreement,  the Company shall\nissue to the Buyer  300,000  shares of Common  Stock  (the  \"Initial  Commitment\nShares\").  In connection  with each purchase of Purchase Shares  hereunder,  the\nCompany  agrees to issue to the Buyer a number  of shares of Common  Stock  (the\n\"Additional  Commitment Shares\" and together with the Initial Commitment Shares,\nthe  \"Commitment  Shares\")  equal  to the  product  of (x)  300,000  and (y) the\nPurchase Amount Fraction.  The \"Purchase Amount Fraction\" shall mean a fraction,\nthe  numerator  of which is the  Purchase  Amount  purchased  by the Buyer  with\nrespect to such  purchase of  Purchase  Shares and the  denominator  of which is\nFifteen Million Dollars ($15,000,000). The Additional Commitment Shares shall be\nequitably adjusted for any reorganization,  recapitalization, non-cash dividend,\nstock split or other similar transaction. The Initial Commitment Shares shall be\nissued in  certificated  form and  (subject to Section 5 hereof)  shall bear the\nfollowing restrictive legend:\n\n         \"THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  HAVE  NOT  BEEN\n         REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE\n         STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT\n         AND MAY NOT BE OFFERED FOR SALE,  SOLD,  TRANSFERRED OR ASSIGNED IN THE\n         ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER\n         THE SECURITIES ACT OF 1933, AS AMENDED,  OR APPLICABLE STATE SECURITIES\n         LAWS, OR AN OPINION OF COUNSEL, IN A FORM REASONABLY  ACCEPTABLE TO THE\n         COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE\n         STATE  SECURITIES  LAWS OR UNLESS SOLD  PURSUANT TO RULE 144 UNDER SAID\n         ACT.\"\n\n           The Buyer  agrees  that the  Buyer  shall  not  transfer  or sell the\nCommitment  Shares  until the earlier of 600 Trading  Days (30 Monthly  Periods)\nfrom the  date  hereof  or date on which  this  Agreement  has been  terminated,\nprovided,  however,  that such  restrictions  shall not apply: (i) in connection\nwith any transfers to or among  affiliates (as defined in the 1934 Act), or (ii)\nif an Event of Default has  occurred,  or any event which,  after notice  and\/or\nlapse of time,  would become an Event of Default,  including  any failure by the\nCompany to timely issue Purchase  Shares under this  Agreement.  Notwithstanding\nthe forgoing, the Buyer may transfer Commitment Shares to a third party in order\nto settle a sale  made by the Buyer  where  the  Buyer  reasonably  expects  the\nCompany to deliver  Purchase Shares to the Buyer under this Agreement so long as\nthe Buyer  maintains  ownership of the same  overall  number of shares of Common\nStock by \"replacing\" the Commitment  Shares so transferred  with Purchase Shares\nwhen the Purchase Shares are actually issued by the Company to the Buyer.\n\n                                       15\n\n\n         (g) Expense Reimbursement.  As reimbursement of the Buyer's expenses in\nconnection with the transactions  contemplated hereby, the Company agrees to pay\nto the Buyer,  immediately  upon the  execution  of this  Agreement,  the sum of\n$20,000 as the expense  reimbursement  of the Investor's  expenses in connection\nwith consummation of the transaction,  including any due diligence  expenses and\nlegal fees.\n\n          (h) Due Diligence.  The Buyer shall have the right,  from time to time\nas the  Buyer  may  reasonably  deem  appropriate,  to  perform  reasonable  due\ndiligence  on the Company  during  normal  business  hours.  The Company and its\nofficers and employees shall  reasonably  cooperate with the Buyer in connection\nwith any reasonable request by the Buyer related to the Buyer's due diligence of\nthe Company.\n\n\n         5.       TRANSFER AGENT INSTRUCTIONS.\n\n         On the  Commencement  Date,  the Company  shall  cause any  restrictive\nlegend on the Initial  Commitment  Shares to be removed and all of the  Purchase\nShares and Additional Commitment Shares, to be issued under this Agreement shall\nbe issued without any restrictive  legend.  The Company shall issue  irrevocable\ninstructions to the Transfer Agent, and any subsequent  transfer agent, to issue\nPurchase  Shares  in  the  name  of the  Buyer  for  the  Purchase  Shares  (the\n\"Irrevocable  Transfer Agent  Instructions\").  The Company warrants to the Buyer\nthat no  instruction  other than the  Irrevocable  Transfer  Agent  Instructions\nreferred  to in this  Section 5, will be given by the  Company  to the  Transfer\nAgent with respect to the Purchase Shares and that the Commitment Shares and the\nPurchase Shares shall otherwise be freely  transferable on the books and records\nof the  Company  as and to  the  extent  provided  in  this  Agreement  and  the\nRegistration  Rights Agreement  subject to the provisions of Section 4(f) in the\ncase of the Commitment Shares.\n\n\n         6.       CONDITIONS TO THE COMPANY'S OBLIGATION TO COMMENCE\n                  SALES OF SHARES OF COMMON STOCK.\n\n         The  obligation  of the  Company  hereunder  to  commence  sales of the\nPurchase  Shares  is  subject  to the  satisfaction  of  each  of the  following\nconditions  on or before the  Commencement  Date (the date that sales begin) and\nonce such  conditions  have been  initially  satisfied,  there  shall not be any\nongoing  obligation  to  satisfy  such  conditions  after the  Commencement  has\noccurred;  provided that these conditions are for the Company's sole benefit and\nmay be waived by the Company at any time in its sole discretion by providing the\nBuyer with prior written notice thereof:\n\n         (a) The Buyer shall have executed each of the Transaction Documents and\ndelivered the same to the Company  including the  Registration  Rights Agreement\nsubstantially  in the  form  of  Exhibit  A  hereto  (the  \"Registration  Rights\nAgreement\").\n\n\n                                       16\n\n\n         (b)  Subject  to  the  Company's   compliance   with  Section  4(a),  a\nregistration  statement covering the sale of all of the Commitment Shares and at\nleast  10,000,000  Purchase Shares shall have been declared  effective under the\n1933 Act by the SEC and no stop order with respect to the Registration Statement\nshall be pending or threatened by the SEC.\n\n         (c) The  representations  and warranties of the Buyer shall be true and\ncorrect  in  all  material  respects  as of the  date  when  made  and as of the\nCommencement  Date as though made at that time (except for  representations  and\nwarranties  that  speak  as of a  specific  date),  and  the  Buyer  shall  have\nperformed,  satisfied and complied in all material  respects with the covenants,\nagreements and conditions required by this Agreement to be performed,  satisfied\nor complied with by the Buyer at or prior to the Commencement Date.\n\n\n         7.       CONDITIONS TO THE BUYER'S OBLIGATION TO COMMENCE\n                  PURCHASES OF SHARES OF COMMON STOCK.\n\n         The  obligation of the Buyer to commence  purchases of Purchase  Shares\nunder this  Agreement is subject to the  satisfaction  of each of the  following\nconditions  on or before the  Commencement  Date (the date that sales begin) and\nonce such  conditions  have been  initially  satisfied,  there  shall not be any\nongoing  obligation  to  satisfy  such  conditions  after the  Commencement  has\noccurred;  provided that these  conditions  are for the Buyer's sole benefit and\nmay be waived by the Buyer at any time in its sole  discretion  by providing the\nCompany with prior written notice thereof:\n\n         (a) The Company shall have executed each of the  Transaction  Documents\nand delivered the same to the Buyer including the Registration  Rights Agreement\nsubstantially in the form of Exhibit A hereto.\n\n         (b) The Company  shall have issued to the Buyer the Initial  Commitment\nShares and shall have removed any  restrictive  transfer legend from the Initial\nCommitment Shares.\n\n         (c) The Common Stock shall be authorized for quotation on the Principal\nMarket, trading in the Common Stock shall not have been within the last 365 days\nsuspended by the SEC or the  Principal  Market and the  Purchase  Shares and the\nCommitment Shares shall be approved for listing upon the Principal Market.\n\n         (d) The Buyer shall have received the opinions of the  Company's  legal\ncounsel dated as of the Commencement Date substantially in the form of Exhibit B\nattached hereto.\n\n         (e) The representations and warranties of the Company shall be true and\ncorrect  in all  material  respects  (except  to the  extent  that  any of  such\nrepresentations and warranties is already qualified as to materiality in Section\n3 above, in which case, such  representations  and warranties  shall be true and\ncorrect  without further  qualification)  as of the date when made and as of the\nCommencement  Date as though made at that time (except for  representations  and\nwarranties  that  speak  as of a  specific  date)  and the  Company  shall  have\nperformed, satisfied and complied with the covenants,  agreements and conditions\n\n\n                                       17\n\n\nrequired by the  Transaction  Documents to be  performed,  satisfied or complied\nwith by the Company at or prior to the  Commencement  Date. The Buyer shall have\nreceived a  certificate,  executed by the CEO,  President or CFO of the Company,\ndated as of the Commencement  Date, to the foregoing effect in the form attached\nhereto as Exhibit C.\n\n         (f)  The  Board  of  Directors  of  the  Company   shall  have  adopted\nresolutions  in the form  attached  hereto as  Exhibit D which  shall be in full\nforce  and  effect  without  any  amendment  or  supplement  thereto  as of  the\nCommencement Date.\n\n         (g) As of the Commencement Date, the Company shall have reserved out of\nits  authorized  and  unissued  Common  Stock,  (A)  solely  for the  purpose of\neffecting purchases of Purchase Shares hereunder,  at least 10,000,000 shares of\nCommon Stock and (B) as Additional  Commitment Shares in accordance with Section\n4(f) hereof, 300,000 shares of Common Stock.\n\n         (h) The Irrevocable Transfer Agent Instructions,  in form acceptable to\nthe Buyer  shall  have been  delivered  to and  acknowledged  in  writing by the\nCompany and the Company's Transfer Agent.\n\n         (i) The  Company  shall  have  delivered  to the  Buyer  a  certificate\nevidencing  the  incorporation  and good standing of the Company in the State of\nNevada  issued  by the  Secretary  of State of the  State of Nevada as of a date\nwithin ten (10) Trading Days of the Commencement Date.\n\n         (j) The Company shall have  delivered to the Buyer a certified  copy of\nthe Certificate of  Incorporation  as certified by the Secretary of State of the\nState of Nevada within ten (10) Trading Days of the Commencement Date.\n\n         (k) The  Company  shall  have  delivered  to the  Buyer  a  secretary's\ncertificate  executed  by  the  Secretary  of  the  Company,  dated  as  of  the\nCommencement Date, in the form attached hereto as Exhibit E.\n\n         (l) A registration statement covering the sale of all of the Commitment\nShares  and at  least  10,000,000  Purchase  Shares  shall  have  been  declared\neffective  under the 1933 Act by the SEC and no stop order  with  respect to the\nregistration  statement  shall be pending or  threatened by the SEC. The Company\nshall have  prepared and delivered to the Buyer a final form of prospectus to be\nused by the Buyer in connection  with any sales of any Commitment  Shares or any\nPurchase  Shares.  The Company shall have made all filings under all  applicable\nfederal and state  securities  laws  necessary to consummate the issuance of the\nCommitment  Shares  and  the  Purchase  Shares  pursuant  to this  Agreement  in\ncompliance with such laws.\n\n         (m) No Event of Default has occurred,  or any event which, after notice\nand\/or lapse of time, would become an Event of Default has occurred.\n\n\n                                       18\n\n\n         (n) On or prior to the  Commencement  Date,  the Company shall take all\nnecessary action, if any, and such actions as reasonably requested by the Buyer,\nin  order  to  render  inapplicable  any  control  share  acquisition,  business\ncombination,  shareholder rights plan or poison pill (including any distribution\nunder a rights  agreement) or other similar  anti-takeover  provision  under the\nCertificate of Incorporation or the laws of the state of its incorporation which\nis or could  become  applicable  to the  Buyer as a result  of the  transactions\ncontemplated by this Agreement,  including,  without  limitation,  the Company's\nissuance of the Securities and the Buyer's ownership of the Securities.\n\n\n         8.       INDEMNIFICATION.\n\n         In  consideration  of  the  Buyer's   execution  and  delivery  of  the\nTransaction  Documents and acquiring the Securities hereunder and in addition to\nall of the Company's  other  obligations  under the Transaction  Documents,  the\nCompany shall defend, protect,  indemnify and hold harmless the Buyer and all of\nits  affiliates,  shareholders,  officers,  directors,  employees  and direct or\nindirect   investors  and  any  of  the  foregoing   person's  agents  or  other\nrepresentatives  (including,  without  limitation,  those retained in connection\nwith  the  transactions  contemplated  by  this  Agreement)  (collectively,  the\n\"Indemnitees\")  from and against any and all actions,  causes of action,  suits,\nclaims, losses, costs, penalties, fees, liabilities and damages, and expenses in\nconnection therewith  (irrespective of whether any such Indemnitee is a party to\nthe  action  for which  indemnification  hereunder  is  sought),  and  including\nreasonable  attorneys' fees and disbursements  (the \"Indemnified  Liabilities\"),\nincurred by any Indemnitee as a result of, or arising out of, or relating to (a)\nany  misrepresentation  or breach of any  representation or warranty made by the\nCompany in the  Transaction  Documents or any other  certificate,  instrument or\ndocument  contemplated  hereby  or  thereby,  (b) any  breach  of any  covenant,\nagreement or obligation of the Company contained in the Transaction Documents or\nany other certificate, instrument or document contemplated hereby or thereby, or\n(c) any cause of action,  suit or claim brought or made against such  Indemnitee\nand arising out of or resulting  from the  execution,  delivery,  performance or\nenforcement of the Transaction Documents or any other certificate, instrument or\ndocument contemplated hereby or thereby,  other than with respect to Indemnified\nLiabilities  which  directly and primarily  result from the gross  negligence or\nwillful  misconduct  of  the  Indemnitee.  To  the  extent  that  the  foregoing\nundertaking  by the Company  may be  unenforceable  for any reason,  the Company\nshall make the maximum  contribution to the payment and  satisfaction of each of\nthe Indemnified Liabilities which is permissible under applicable law.\n\n\n         9.       EVENTS OF DEFAULT.\n\n         An \"Event of Default\"  shall be deemed to have  occurred at any time as\nany of the following events occurs:\n\n\n                                       19\n\n\n         (a) while any  registration  statement  is  required  to be  maintained\neffective  pursuant  to the  terms of the  Registration  Rights  Agreement,  the\neffectiveness of such registration  statement lapses for any reason  (including,\nwithout limitation, the issuance of a stop order) or is unavailable to the Buyer\nfor sale of all of the  Registrable  Securities (as defined in the  Registration\nRights  Agreement)  in  accordance  with the  terms of the  Registration  Rights\nAgreement,  and such lapse or unavailability  continues for a period of ten (10)\nconsecutive  Trading  Days or for more than an  aggregate of thirty (30) Trading\nDays in any 365-day period;\n\n         (b) the  suspension  from  trading or failure of the Common Stock to be\nlisted on the Principal Market for a period of ten (10) consecutive Trading Days\nor for more than an aggregate of thirty (30) Trading Days in any 365-day period;\n\n         (c) the  delisting  of the  Company's Common  Stock from  the Principal\nMarket;\n\n         (d) the failure for any reason by the Transfer  Agent to issue Purchase\nShares to the Buyer within five (5) Trading Days after the  applicable  Purchase\nDate which the Buyer is entitled to receive  (subject to the Company's  right to\ncure such Event of Default upon 5 Trading Days' written notice from the Buyer to\nthe Company in respect thereof) ;\n\n         (e) if at any time after the  Commencement  Date, the \"Exchange Cap\" is\nreached (the  \"Exchange Cap\" shall be deemed to be reached at such time if, upon\nsubmission  of a Purchase  Notice  under this  Agreement,  the  issuance of such\nshares of Common  Stock would exceed that number of shares of Common Stock which\nthe Company may issue  under this  Agreement  without  breaching  the  Company's\nobligations under the rules or regulations of the Principal Market);\n\n         (f) the Company  breaches  any  representation,  warranty,  covenant or\nother term or condition under any Transaction Document if such breach could have\na  Material  Adverse  Effect and  except,  in the case of a breach of a covenant\nwhich is reasonably  curable,  only if such breach  continues for a period of at\nleast ten (10) Trading Days;\n\n         (g)  any  payment   default  under  any  contract   whatsoever  or  any\nacceleration  prior  to  maturity  of  any  mortgage,   indenture,  contract  or\ninstrument  under  which there may be issued or by which there may be secured or\nevidenced  any  indebtedness  for money  borrowed  by the  Company  or for money\nborrowed the  repayment  of which is  guaranteed  by the  Company,  whether such\nindebtedness or guarantee now exists or shall be created hereafter,  which, with\nrespect to any such payment  default or  acceleration  prior to maturity,  is in\nexcess of $1,000,000,  provided however,  that with respect to any trade payable\nincurred in the  ordinary  course,  no Event of Default  shall be deemed to have\noccurred  until  an  adjudication  of such  default  is  entered  by a court  of\ncompetent jurisdiction;\n\n         (h) if any Person  commences a proceeding  against the Company pursuant\nto or within the meaning of any Bankruptcy Law;\n\n                                       20\n\n\n         (i) if the Company  pursuant to or within the meaning of any Bankruptcy\nLaw; (A) commences a voluntary  case,  (B) consents to the entry of an order for\nrelief against it in an involuntary  case, (C) consents to the  appointment of a\nCustodian of it or for all or  substantially  all of its  property,  (D) makes a\ngeneral assignment for the benefit of its creditors,  (E) becomes insolvent,  or\n(F) is generally unable to pay its debts as the same become due; or\n\n         (j) a court of competent  jurisdiction  enters an order or decree under\nany  Bankruptcy Law that (A) is for relief against the Company in an involuntary\ncase, (B) appoints a Custodian of the Company or for all or substantially all of\nits property, or (C) orders the liquidation of the Company or any Subsidiary.\n\nIn addition  to any other  rights and  remedies  under  applicable  law and this\nAgreement, including the Buyer termination rights under Section 11(k) hereof, so\nlong as an Event of Default  has  occurred  and is  continuing,  or if any event\nwhich, after notice and\/or lapse of time, would become an Event of Default,  has\noccurred  and is  continuing,  or so long as the  Purchase  Price is  below  the\nPurchase Price Floor, the Buyer shall not be obligated to purchase any shares of\nCommon Stock under this  Agreement.  If pursuant to or within the meaning of any\nBankruptcy Law, the Company commences a voluntary case or any Person commences a\nproceeding  against the Company, a Custodian is appointed for the Company or for\nall or  substantially  all of its  property,  or the  Company  makes  a  general\nassignment for the benefit of its creditors,  (any of which would be an Event of\nDefault as described  in Sections  9(h),  9(i) and 9(j)  hereof) this  Agreement\nshall  automatically  terminate  without any liability or payment to the Company\nwithout  further  action or notice by any Person.  No such  termination  of this\nAgreement  under  Section  11(k)(i)  shall  affect the  Company's or the Buyer's\nobligations  under this  Agreement  with  respect to pending  purchases  and the\nCompany and the Buyer shall complete their  respective  obligations with respect\nto any pending purchases under this Agreement.\n\n\n         10.      CERTAIN DEFINED TERMS.\n\n         For  purposes of this  Agreement,  the  following  terms shall have the\nfollowing meanings:\n\n         (a)  \"1933 Act\" means the Securities Act of 1933, as amended.\n\n         (b)  \"Available   Amount\"  means  initially   Fifteen  Million  Dollars\n($15,000,000)  in the  aggregate  which  amount shall be reduced by the Purchase\nAmount each time the Buyer purchases  shares of Common Stock pursuant to Section\n1 hereof.\n\n         (c) \"Bankruptcy  Law\" means Title 11, U.S. Code, or any similar federal\nor state law for the relief of debtors.\n\n         (d) \"Closing  Sale Price\" means,  for any security as of any date,  the\nlast closing trade price for such  security on the Principal  Market as reported\nby  Bloomberg,  or,  if the  Principal  Market is not the  principal  securities\nexchange or trading  market for such  security,  the last closing trade price of\nsuch security on the principal  securities exchange or trading market where such\nsecurity is listed or traded as reported by Bloomberg.\n\n                                       21\n\n\n         (e) \"Custodian\" means any receiver,  trustee,  assignee,  liquidator or\nsimilar official under any Bankruptcy Law.\n\n         (f) \"Daily Base Amount\" means  initially  Twenty Five Thousand  Dollars\n($25,000) per Trading Day,  which amount may be increased or decreased from time\nto time pursuant to Section 1(c) hereof.\n\n         (g) \"Floor  Price\"  means  initially  $0.75 per share of Common  Stock,\nwhich amount may be increased of decreased from time to time pursuant to Section\n1(d)(iii)  hereof,  except  that in no case  shall the Floor  Price be less than\n$0.50 per share of Common Stock without the prior written consent of the Buyer.\n\n         (h) \"Maturity Date\" means the date that is 600 Trading Days (30 Monthly\nPeriods) from the Commencement  Date which such date may be extended by up to an\nadditional Six (6) Monthly Periods by the Company,  in its sole  discretion,  by\nwritten notice to the Buyer.\n\n         (i)  \"Monthly  Base  Amount\"  means  Five  Hundred   Thousand   Dollars\n($500,000) per Monthly Period.\n\n         (j)   \"Monthly  Period\" means  each  successive 20  Trading  Day period\ncommencing  with the  Commencement Date.\n\n         (k) \"Original  Daily Base Amount\"  means Twenty Five  Thousand  Dollars\n($25,000) per Trading Day.\n\n         (l)  \"Person\"  means an  individual  or entity  including  any  limited\nliability  company, a partnership,  a joint venture, a corporation,  a trust, an\nunincorporated  organization  and a  government  or  any  department  or  agency\nthereof.\n\n         (m) \"Principal Market\" means The Nasdaq National Market.\n\n         (n) \"Purchase  Amount\" means the portion of the Available  Amount to be\npurchased by the Buyer pursuant to Section 1 hereof.\n\n         (o)  \"Purchase  Date\"  means the  actual  date that the Buyer is to buy\nPurchase Shares pursuant to Section 1 hereof.\n\n         (p) \"Purchase Price\" means, as of any date of  determination  the lower\nof the  (A)  the  lowest  Sale  Price  of the  Common  Stock  on  such  date  of\ndetermination  and (B) the  arithmetic  average of the three (3) lowest  Closing\nSale Prices for the Common  Stock during the ten (10)  consecutive  Trading Days\nending on the Trading Day immediately  preceding such date of determination  (to\nbe appropriately  adjusted for any  reorganization,  recapitalization,  non-cash\ndividend, stock split or other similar transaction).\n\n         (q) \"Sale  Price\"  means,  for any  security as of any date,  any trade\nprice for such security on the Principal Market as reported by Bloomberg, or, if\nthe Principal Market is not the principal  securities exchange or trading market\nfor such security,  the trade price of such security on the principal securities\nexchange or trading  market where such  security is listed or traded as reported\nby Bloomberg.\n\n                                       22\n\n\n         (r) \"SEC\" means the United States Securities and Exchange Commission.\n\n         (s) \"Trading Day\" means any day on which the  Principal  Market is open\nfor customary trading.\n\n\n         11.      MISCELLANEOUS.\n\n         (a) Governing Law; Jurisdiction;  Jury Trial. The corporate laws of the\nState of Nevada shall govern all issues  concerning  the relative  rights of the\nCompany and its shareholders.  All other questions  concerning the construction,\nvalidity,  enforcement  and  interpretation  of this  Agreement  and  the  other\nTransaction  Documents  shall be governed by the  internal  laws of the State of\nIllinois,  without  giving  effect  to any  choice  of law  or  conflict  of law\nprovision or rule (whether of the State of Illinois or any other  jurisdictions)\nthat would cause the application of the laws of any jurisdictions other than the\nState of  Illinois.  Each party  hereby  irrevocably  submits  to the  exclusive\njurisdiction of the state and federal courts sitting in the City of Chicago, for\nthe  adjudication  of any  dispute  hereunder  or under  the  other  Transaction\nDocuments  or in  connection  herewith  or  therewith,  or with any  transaction\ncontemplated  hereby or discussed herein,  and hereby  irrevocably  waives,  and\nagrees not to assert in any suit, action or proceeding, any claim that it is not\npersonally subject to the jurisdiction of any such court, that such suit, action\nor  proceeding  is  brought in an  inconvenient  forum or that the venue of such\nsuit,  action or proceeding is improper.  Each party hereby  irrevocably  waives\npersonal  service of process and  consents to process  being  served in any such\nsuit,  action or  proceeding  by  mailing a copy  thereof  to such  party at the\naddress for such notices to it under this Agreement and agrees that such service\nshall  constitute  good and  sufficient  service of process and notice  thereof.\nNothing  contained herein shall be deemed to limit in any way any right to serve\nprocess in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY\nRIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,  A JURY TRIAL FOR THE ADJUDICATION\nOF ANY  DISPUTE  HEREUNDER  OR IN  CONNECTION  HEREWITH  OR ARISING  OUT OF THIS\nAGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.\n\n         (b)  Counterparts.  This  Agreement  may be  executed  in  two or  more\nidentical  counterparts,  all of  which  shall  be  considered  one and the same\nagreement and shall become effective when  counterparts have been signed by each\nparty and  delivered to the other  party;  provided  that a facsimile  signature\nshall be  considered  due  execution  and shall be  binding  upon the  signatory\nthereto with the same force and effect as if the signature were an original, not\na facsimile signature.\n\n         (c) Headings.  The headings of this  Agreement are for  convenience  of\nreference  and shall not form part of, or affect  the  interpretation  of,  this\nAgreement.\n\n         (d)  Severability.  If any provision of this Agreement shall be invalid\nor unenforceable in any jurisdiction,  such invalidity or unenforceability shall\nnot affect the validity or  enforceability of the remainder of this Agreement in\nthat  jurisdiction  or the validity or  enforceability  of any provision of this\nAgreement in any other jurisdiction.\n\n                                       23\n\n\n         (e) Entire  Agreement;  Amendments.  With the  exception  of the Mutual\nNondisclosure  Agreement  between the parties dated as of October 10, 2001, this\nAgreement  supersedes  all other  prior oral or written  agreements  between the\nBuyer,  the Company,  their  affiliates  and persons acting on their behalf with\nrespect  to  the  matters  discussed  herein,  and  this  Agreement,  the  other\nTransaction  Documents and the instruments  referenced herein contain the entire\nunderstanding  of the parties  with  respect to the matters  covered  herein and\ntherein and,  except as  specifically  set forth herein or therein,  neither the\nCompany  nor  the  Buyer  makes  any  representation,   warranty,   covenant  or\nundertaking with respect to such matters.  No provision of this Agreement may be\namended  other than by an  instrument  in writing  signed by the Company and the\nBuyer,  and no  provision  hereof may be waived other than by an  instrument  in\nwriting signed by the party against whom enforcement is sought.\n\n         (f) Notices.  Any notices,  consents,  waivers or other  communications\nrequired or permitted to be given under the terms of this  Agreement  must be in\nwriting  and will be deemed  to have  been  delivered:  (i) upon  receipt,  when\ndelivered  personally;  (ii)  upon  receipt,  when sent by  facsimile  (provided\nconfirmation of transmission  is  mechanically or  electronically  generated and\nkept on file by the sending party);  or (iii) one Trading Day after deposit with\na  nationally  recognized  overnight  delivery  service,  in each case  properly\naddressed to the party to receive the same. The addresses and facsimile  numbers\nfor such communications shall be:\n\n         If to the Company:\n                  PurchasePro.com, Inc.\n                  7710 W. Cheyenne Ave.\n                  Las Vegas, NV 89129\n                  Telephone:        702-316-7000\n                  Facsimile:        702-316-7691\n                  Attention:        Chief Financial Officer\n\n         With a copy to:\n                  Brobeck Phleger &amp; Harrison LLP\n                  12390 El Camino Real\n                  San Diego, California 92139\n                  Telephone:        858-720-2595\n                  Facsimile:        858-720-2555\n                  Attention:        Michael S. Kagnoff\n\n         If to the Buyer:\n                  Fusion Capital Fund II, LLC\n                  222 Merchandise Mart Plaza, Suite 9-112\n                  Chicago, IL 60654\n                  Telephone:        312-644-6644\n                  Facsimile:        312-644-6244\n                  Attention:        Steven G. Martin\n\n\n                                       24\n\n\n         If to the Transfer Agent:\n                  ChaseMellon Shareholder Services\n                  400 South Hope Street, 4th Floor\n                  Los Angeles, CA 90071\n                  Telephone:        213-553-9724\n                  Facsimile:        213-553-9735\n                  Attention:        Ray Torres\n\nor at such other address and\/or facsimile number and\/or to the attention of such\nother person as the  recipient  party has  specified by written  notice given to\neach other  party  three (3)  Trading  Days prior to the  effectiveness  of such\nchange.  Written  confirmation  of receipt  (A) given by the  recipient  of such\nnotice,   consent,   waiver  or  other   communication,   (B)   mechanically  or\nelectronically  generated by the sender's facsimile machine containing the time,\ndate, and recipient facsimile number or (C) provided by a nationally  recognized\novernight  delivery service,  shall be rebuttable  evidence of personal service,\nreceipt by facsimile or receipt from a nationally  recognized overnight delivery\nservice in accordance with clause (i), (ii) or (iii) above, respectively.\n\n         (g)  Successors and Assigns.  This Agreement  shall be binding upon and\ninure to the benefit of the parties and their respective successors and assigns.\nThe  Company  shall not  assign  this  Agreement  or any  rights or  obligations\nhereunder without the prior written consent of the Buyer, including by merger or\nconsolidation.\nThe Buyer may not assign its rights or obligations under this Agreement.\n\n         (h) No Third Party  Beneficiaries.  This  Agreement is intended for the\nbenefit of the parties  hereto and their  respective  permitted  successors  and\nassigns, and is not for the benefit of, nor may any provision hereof be enforced\nby, any other person.\n\n         (i)  Publicity.  The  Buyer  shall  have the  right to  approve  before\nissuance  any press  releases  or any other  public  disclosure  (including  any\nfilings  with the SEC) with  respect to the  transactions  contemplated  hereby;\nprovided,  however,  that the  Company  shall be  entitled,  without  the  prior\napproval  of any Buyer,  to make any press  release or other  public  disclosure\n(including  any filings  with the SEC) with respect to such  transactions  as is\nrequired  by  applicable  law and  regulations  (although  the  Buyer  shall  be\nconsulted  by the  Company in  connection  with any such press  release or other\npublic  disclosure  prior  to its  release  and  shall be  provided  with a copy\nthereof).\n\n         (j) Further Assurances. Each party shall do and perform, or cause to be\ndone and  performed,  all such  further acts and things,  and shall  execute and\ndeliver all such other agreements,  certificates,  instruments and documents, as\nthe other  party may  reasonably  request  in order to carry out the  intent and\naccomplish  the  purposes  of  this  Agreement  and  the   consummation  of  the\ntransactions contemplated hereby.\n\n\n                                       25\n\n\n         (k) Termination. This Agreement may be terminated only as follows:\n\n                  (i) By the Buyer any time an Event of Default  exists  without\n         any  liability  or payment to the Company.  However,  if pursuant to or\n         within the  meaning of any  Bankruptcy  Law,  the  Company  commences a\n         voluntary  case  or any  Person  commences  a  proceeding  against  the\n         Company,  a  Custodian  is  appointed  for  the  Company  or for all or\n         substantially  all of its  property,  or the  Company  makes a  general\n         assignment for the benefit of its creditors,  (any of which would be an\n         Event of Default as described in Sections  9(h),  9(i) and 9(j) hereof)\n         this Agreement shall  automatically  terminate without any liability or\n         payment to the Company  without further action or notice by any Person.\n         No such termination of this Agreement under this Section 11(k)(i) shall\n         affect the Company's or the Buyer's  obligations  under this  Agreement\n         with respect to pending  purchases  and the Company and the Buyer shall\n         complete  their  respective  obligations  with  respect to any  pending\n         purchases under this Agreement.\n\n                  (ii)  In the  event  that  the  Commencement  shall  not  have\n         occurred, the Company shall have the option to terminate this Agreement\n         for any reason or for no reason  without  liability of any party to any\n         other party.\n\n                  (iii)  In the  event  that  the  Commencement  shall  not have\n         occurred on or before  August 31,  2002,  due to the failure to satisfy\n         the  conditions set forth in Sections 6 and 7 above with respect to the\n         Commencement  (and the  nonbreaching  party's  failure  to  waive  such\n         unsatisfied condition(s)), the nonbreaching party shall have the option\n         to  terminate  this  Agreement at the close of business on such date or\n         thereafter without liability of any party to any other party.\n\n                  (iv) If by the Maturity Date (including any extension  thereof\n         by the Company pursuant to Section 10(g) hereof), for any reason or for\n         no reason the full  Available  Amount under this Agreement has not been\n         purchased as provided for in Section 1 of this Agreement,  by the Buyer\n         without any liability or payment to the Company.\n\n                  (v) At any time after the Commencement Date, the Company shall\n         have the option to terminate  this  Agreement  for any reason or for no\n         reason by  delivering  notice (a \"Company  Termination  Notice\") to the\n         Buyer  electing to terminate  this  Agreement  without any liability or\n         payment to the  Buyer.  The  Company  Termination  Notice  shall not be\n         effective  until one (1) Trading Day after it has been  received by the\n         Buyer.\n\n                  (vi) This Agreement shall automatically  terminate on the date\n         that the Company sells and the Buyer purchases  Fifteen Million Dollars\n         ($15,000,000) as provided  herein,  without any action or notice on the\n         part of any party.\n\nExcept as set forth in Sections 11(k)(i) in respect of an Event of Default under\nSections 9(h),  9(i) and 9(j), and 11(k)(vi),  any termination of this Agreement\npursuant to this  Section  11(k)  shall be  effected by written  notice from the\nCompany to the Buyer,  or the Buyer to the Company,  as the case may be, setting\nforth the basis for the termination  hereof. The  representations and warranties\n\n                                       26\n\n\nof the  Company  and  the  Buyer  contained  in  Sections  2 and 3  hereof,  the\nindemnification  provisions set forth in Section 8 hereof and the agreements and\ncovenants  set forth in Section  11,  shall  survive  the  Commencement  and any\ntermination of this Agreement. No termination of this Agreement shall affect the\nCompany's  or the  Buyer's  obligations  under this  Agreement  with  respect to\npending  purchases and the Company and the Buyer shall complete their respective\nobligations with respect to any pending purchases under this Agreement.\n\n         (l) No  Financial  Advisor,  Placement  Agent,  Broker or  Finder.  The\nCompany  represents  and  warrants  to the  Buyer  that it has not  engaged  any\nfinancial  advisor,  placement  agent,  broker or finder in connection  with the\ntransactions  contemplated  hereby.  The Buyer  represents  and  warrants to the\nCompany that it has not engaged any financial advisor,  placement agent,  broker\nor finder in connection with the transactions contemplated hereby.\n\n         (m) No Strict Construction. The language used in this Agreement will be\ndeemed to be the language  chosen by the parties to express their mutual intent,\nand no rules of strict construction will be applied against any party.\n\n         (n) Remedies,  Other  Obligations,  Breaches and Injunctive Relief. The\nBuyer's remedies  provided in this Agreement shall be cumulative and in addition\nto all other remedies available to the Buyer under this Agreement,  at law or in\nequity  (including  a decree of specific  performance  and\/or  other  injunctive\nrelief),  no remedy of the Buyer  contained  herein  shall be deemed a waiver of\ncompliance  with the  provisions  giving rise to such remedy and nothing  herein\nshall limit the Buyer's  right to pursue  actual  damages for any failure by the\nCompany to comply with the terms of this  Agreement.  The  Company  acknowledges\nthat a breach by it of its obligations  hereunder will cause irreparable harm to\nthe Buyer and that the remedy at law for any such breach may be inadequate.  The\nCompany  therefore  agrees that,  in the event of any such breach or  threatened\nbreach,  the  Buyer  shall be  entitled,  in  addition  to all  other  available\nremedies,  to an  injunction  restraining  any breach,  without the necessity of\nshowing economic loss and without any bond or other security being required.\n\n         (o)  Changes to the Terms of this  Agreement.  This  Agreement  and any\nprovision  hereof may only be amended by an instrument in writing  signed by the\nCompany and the Buyer. The term \"Agreement\" and all reference  thereto,  as used\nthroughout this instrument,  shall mean this instrument as originally  executed,\nor if later amended or supplemented, then as so amended or supplemented.\n\n         (p) Enforcement Costs. If: (i) this Agreement is placed by the Buyer in\nthe hands of an attorney for enforcement or is enforced by the Buyer through any\nlegal proceeding;  or (ii) an attorney is retained to represent the Buyer in any\nbankruptcy,   reorganization,   receivership  or  other  proceedings   affecting\ncreditors'  rights  and  involving  a claim  under this  Agreement;  or (iii) an\nattorney is retained to represent the Buyer in any other proceedings  whatsoever\nin connection with this  Agreement,  then the Company shall pay to the Buyer, as\nincurred by the Buyer,  all reasonable costs and expenses  including  attorneys'\nfees  incurred in  connection  therewith,  in addition to all other  amounts due\nhereunder.\n\n         (q)  Failure  or  Indulgence  Not  Waiver.  No  failure or delay in the\nexercise of any power,  right or privilege  hereunder  shall operate as a waiver\nthereof,  nor shall any single or partial  exercise of any such power,  right or\nprivilege  preclude  other or further  exercise  thereof or of any other  right,\npower or privilege.\n                                    * * * * *\n\n                                       27\n\n\n\n         IN WITNESS  WHEREOF,  the Buyer and the Company have caused this Common\nStock Purchase Agreement to be duly executed as of the date first written above.\n\n\n\n                                       THE COMPANY:\n\n                                       PURCHASEPRO.COM, INC.\n\n                                       By:   \/s\/ Richard Clemmer\n                                           ---------------------\n                                           Name: Richard Clemmer\n                                           Title: Chief Executive Officer\n\n\n                                       BUYER:\n\n                                       FUSION CAPITAL FUND II, LLC\n                                       BY: FUSION CAPITAL PARTNERS, LLC\n                                       BY: SGM HOLDINGS CORP.\n\n                                       By:  \/s\/ Steven G. Martin\n                                            ---------------------\n                                            Name: Steven G. Martin\n                                            Title: President\n\n\n\n\n\n\n\n\n\n                                       28\n\n\n\n                                    SCHEDULES\n\nSchedule 3(a)         Subsidiaries\nSchedule 3(c)         Capitalization\nSchedule 3(e)         Conflicts\nSchedule 3(f)         1934 Act Filings\nSchedule 3(g)         Material Changes\nSchedule 3(h)         Litigation\nSchedule 3(l)         Intellectual Property\nSchedule 3(n)         Liens\nSchedule 3(r)         Certain Transactions\n\n\n\n                               EXHIBITS\n\nExhibit A             Form of Registration Rights Agreement\nExhibit B             Form of Company Counsel Opinion\nExhibit C             Form of Officer's Certificate\nExhibit D             Form of Resolutions of Board of Directors of the Company\nExhibit E             Form of Secretary's Certificate\n\n\n\n\n\n\n\n\n\n\n                                       29\n\n\n\n\n                              DISCLOSURE SCHEDULES\n\n\n                          Schedule 3(a) - Subsidiaries\n\n\n                         Schedule 3(c) - Capitalization\n\n\n                          Schedule 3(e) - No Conflicts\n\n\n                        Schedule 3(f) - 1934 Act Filings\n\n\n                   Schedule 3(g) - Absence of Certain Changes\n\n\n                           Schedule 3(h) - Litigation\n\n\n                  Schedule 3(l) - Intellectual Property Rights\n\n\n                              Schedule 3(n) - Title\n\n\n                  Schedule 3(r) - Transactions with Affiliates\n\n\n\n\n\n\n\n\n\n\n\n\n\n                                       30\n\n\n\n\n                                    EXHIBIT A\n\n                      FORM OF REGISTRATION RIGHTS AGREEMENT\n\n\n[Sent separately]\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n                                       31\n\n\n\n                                    EXHIBIT B\n\n                         FORM OF COMPANY COUNSEL OPINION\n\n         Capitalized terms used herein but not defined herein,  have the meaning\nset forth in the Common Stock Purchase  Agreement.  Based on the foregoing,  and\nsubject to the assumptions and  qualifications  set forth herein,  we are of the\nopinion that:\n\n                  1. The Company is a corporation  existing and in good standing\nunder the laws of the State of _______.  The Company is qualified to do business\nas a foreign corporation and is in good standing in the States of ________.\n\n                  2. The Company has the corporate power to execute and deliver,\nand perform its obligations  under,  each Transaction  Document to which it is a\nparty.  The Company has the  corporate  power to conduct its business as, to the\nbest of our knowledge,  it is now  conducted,  and to own and use the properties\nowned and used by it.\n\n                  3. The execution,  delivery and  performance by the Company of\nthe  Transaction  Documents to which it is a party have been duly  authorized by\nall  necessary  corporate  action on the part of the Company.  The execution and\ndelivery of the  Transaction  Documents by the Company,  the  performance of the\nobligations  of  the  Company  thereunder  and  the  consummation  by it of  the\ntransactions  contemplated therein have been duly authorized and approved by the\nCompany's Board of Directors and no further  consent,  approval or authorization\nof the  Company,  its Board of Directors or its  stockholders  is required.  The\nTransaction  Documents  to which the Company is a party have been duly  executed\nand  delivered by the Company and are the valid and binding  obligations  of the\nCompany,  enforceable  against the Company in accordance with their terms except\nas such  enforceability  may be  limited  by  general  principles  of  equity or\napplicable bankruptcy,  insolvency,  liquidation or similar laws relating to, or\naffecting creditor's rights and remedies.\n\n                  4. The execution,  delivery and  performance by the Company of\nthe Transaction  Documents,  the consummation by the Company of the transactions\ncontemplated thereby including the offering, sale and issuance of the Commitment\nShares,  and the Purchase  Shares in accordance with the terms and conditions of\nthe Common Stock Purchase  Agreement,  and fulfillment and compliance with terms\nof the  Transaction  Documents,  does not and  shall  not:  (i)  conflict  with,\nconstitute a breach of or default (or an event which,  with the giving of notice\nor  lapse of time or  both,  constitutes  or  could  constitute  a  breach  or a\ndefault),  under  (a) the  Certificate  of  Incorporation  or the  Bylaws of the\nCompany,  (b) any  material  agreement,  note,  lease,  mortgage,  deed or other\nmaterial instrument to which to our knowledge the Company is a party or by which\nthe Company or any of its assets are bound,  (ii) result in any violation of any\nstatute,  law,  rule or regulation  applicable  to the Company,  or (iii) to our\nknowledge,  violate any order,  writ,  injunction  or decree  applicable  to the\nCompany or any of its subsidiaries.\n\n                                       32\n\n\n                  5. The issuance of the Purchase  Shares and Commitment  Shares\npursuant to the terms and conditions of the Transaction  Documents has been duly\nauthorized.  ________  shares of Common  Stock have been  properly  reserved for\nissuance under the Common Stock Purchase Agreement.  When issued and paid for in\naccordance with the Common Stock Purchase  Agreement,  the Purchase Shares shall\nbe validly issued, fully paid and non-assessable,  to our knowledge, free of all\ntaxes,  liens,  charges,  restrictions,  rights of first refusal and  preemptive\nrights. ________ shares of Common Stock have been properly reserved for issuance\nas Additional Commitment Shares under the Common Stock Purchase Agreement.  When\nissued in accordance  with the Common Stock Purchase  Agreement,  the Additional\nCommitment Shares shall be validly issued, fully paid and non-assessable, to our\nknowledge,  free of all taxes,  liens,  charges,  restrictions,  rights of first\nrefusal and preemptive  rights. To our knowledge,  the execution and delivery of\nthe Registration  Rights Agreement do not, and the performance by the Company of\nits  obligations  thereunder  shall  not,  give rise to any  rights of any other\nperson for the  registration  under the  Securities  Act of any shares of Common\nStock or other securities of the Company which have not been waived.\n\n                  6. As of the date hereof,  the authorized capital stock of the\nCompany consists of _______ shares of common stock, par value $______ per share,\nof which to our knowledge  __________ shares are issued and outstanding.  Except\nas set forth on Schedule  3(c) of the Common Stock  Purchase  Agreement,  to our\nknowledge,  there are no outstanding shares of capital stock or other securities\nconvertible  into or exchangeable or exercisable for shares of the capital stock\nof the Company.\n\n                  7.  Assuming  the  accuracy  of the  representations  and your\ncompliance  with the covenants  made by you in the  Transaction  Documents,  the\noffering,  sale and  issuance of the  Commitment  Shares to you  pursuant to the\nTransaction  Documents  is exempt from  registration  under the 1933 Act and the\nsecurities laws and regulations of the State of _________.\n\n                  8. Other than that which has been obtained and completed prior\nto the date hereof, no authorization,  approval,  consent, filing or other order\nof any federal or state governmental body,  regulatory agency, or stock exchange\nor market, or any court, or, to our knowledge, any third party is required to be\nobtained  by the Company to enter into and  perform  its  obligations  under the\nTransaction  Documents or for the Company to issue and sell the Purchase  Shares\nas contemplated by the Transaction Documents.\n\n                  9. The Common Stock is registered pursuant to Section 12(g) of\nthe 1934 Act. To our  knowledge,  since January 1, 1999, the Company has been in\ncompliance with the reporting  requirements of the 1934 Act applicable to it. To\nour  knowledge,  since January 1, 1999, the Company has not received any written\nnotice  from the  Principal  Market  stating  that the  Company  has not been in\ncompliance with any of the rules and regulations (including the requirements for\ncontinued listing) of the Principal Market.\n\n\n                                       33\n\n\n         We further  advise you that to our  knowledge,  except as  disclosed on\nSchedule 3(h) in the Common Stock Purchase Agreement,  there is no action, suit,\nproceeding,  inquiry or  investigation  before or by any court,  public board or\nbody, any governmental  agency, any stock exchange or market, or self-regulatory\norganization, which has been threatened in writing or which is currently pending\nagainst the Company,  any of its subsidiaries,  any officers or directors of the\nCompany or any of its  subsidiaries  or any of the  properties of the Company or\nany of its subsidiaries.\n\n         In  addition,  we  have  participated  in the  preparation  of the  SEC\nDocuments and the Registration  Statement (SEC File #________) covering the sale\nof the Purchase  Shares,  the Commitment  Shares  including the prospectus dated\n____________,  contained  therein and in  conferences  with  officers  and other\nrepresentatives  of the Company (including the Company's  independent  auditors)\nduring which the contents of the SEC Documents,  the Registration  Statement and\nrelated  matters were  discussed and reviewed  and,  although we are not passing\nupon and do not assume any  responsibility  for the  accuracy,  completeness  or\nfairness of the  statements  contained in the SEC Documents or the  Registration\nStatement,  on the basis of the information  that was developed in the course of\nthe  performance of the services  referred to above,  considered in the light of\nour  understanding  of the  applicable  law,  nothing came to our attention that\ncaused us to believe that the SEC Documents or the Registration Statement (other\nthan  the  financial  statements  and  schedules  and the  other  financial  and\nstatistical  data  included  therein,  as to which we express no belief),  as of\ntheir dates,  contained  any untrue  statement of a material  fact or omitted to\nstate any material fact  necessary in order to make the statements  therein,  in\nthe light of the circumstances under which they were made, not misleading.\n\n\n\n\n\n\n\n\n\n                                       34\n\n\n\n\n                                    EXHIBIT C\n\n                          FORM OF OFFICER'S CERTIFICATE\n\n             This  Officer's  Certificate  (\"Certificate\")  is  being  delivered\npursuant to Section 7(e) of that certain Common Stock Purchase  Agreement  dated\nas  of  _________,   (\"Common  Stock  Purchase   Agreement\"),   by  and  between\nPURCHASEPRO.COM,  a Nevada corporation (the \"Company\"),  and FUSION CAPITAL FUND\nII, LLC (the  \"Buyer\").  Terms used herein and not otherwise  defined shall have\nthe meanings ascribed to them in the Common Stock Purchase Agreement.\n\n             The undersigned, ___________, ______________ of the Company, hereby\ncertifies as follows:\n\n                  1. I am the ___________ of the Company and make the statements\n          contained in this Certificate;\n\n                  2. The  representations and warranties of the Company are true\n         and correct in all material  respects (except to the extent that any of\n         such   representations  and  warranties  is  already  qualified  as  to\n         materiality  in Section 3 of the Common Stock  Purchase  Agreement,  in\n         which case,  such  representations  and warranties are true and correct\n         without further  qualification)  as of the date when made and as of the\n         Commencement   Date  as   though   made  at  that  time   (except   for\n         representations and warranties that speak as of a specific date);\n\n                  3. The Company has  performed,  satisfied  and complied in all\n         material respects with covenants, agreements and conditions required by\n         the Transaction  Documents to be performed,  satisfied or complied with\n         by the Company at or prior to the Commencement Date.\n\n         IN WITNESS WHEREOF,  I have hereunder signed my name on this ___ day of\n___________.\n\n                                                  ----------------------\n                                                  Name:\n                                                  Title:\n\n         The  undersigned  as  Secretary of  ________,  a ________  corporation,\nhereby certifies that ___________ is the duly elected, appointed,  qualified and\nacting  ________ of  _________  and that the  signature  appearing  above is his\ngenuine signature.\n\n                                                     --------------------------\n                                                     Secretary\n\n\n                                       35\n\n\n\n                                    EXHIBIT D\n\n                           FORM OF COMPANY RESOLUTIONS\n\n         WHEREAS,  there  has  been  presented  to the  Board  of  Directors  of\n____________, (the \"Corporation\") a draft of the Common Stock Purchase Agreement\n(the \"Purchase  Agreement\") by and among the Corporation and Fusion Capital Fund\nII,  LLC  (\"Fusion\"),  providing  for the  purchase  by Fusion of up to  Fifteen\nMillion Dollars  ($15,000,000) of the Corporation's common stock, par value $___\n(the \"Common Stock\"); and\n\n         WHEREAS,  after careful  consideration of the Purchase  Agreement,  the\ndocuments  incident  thereto and other factors  deemed  relevant by the Board of\nDirectors, the Board of Directors has determined that it is advisable and in the\nbest interests of the Corporation to engage in to  transactions  contemplated by\nthe Purchase Agreement.\n\n                              Transaction Documents\n\n         RESOLVED, that the transactions described in the Purchase Agreement are\nhereby    approved   and    ____________________________________________    (the\n\"Authorized  Officers\")  are  severally  authorized  to execute  and deliver the\nPurchase Agreement,  and any other agreements or documents  contemplated thereby\nincluding,   without   limitation,   a   registration   rights   agreement  (the\n\"Registration  Rights  Agreement\")  providing  for the sale of the shares of the\nCompany's Common Stock issuable in respect of the Purchase  Agreement) on behalf\nof the Corporation,  with such amendments,  changes,  additions and deletions as\nthe Authorized Officers may deem to be appropriate and approve on behalf of, the\nCorporation,  such approval to be conclusively  evidenced by the signature of an\nAuthorized Officer thereon; and\n\n         FURTHER  RESOLVED,  that the terms and  provisions of the  Registration\nRights Agreement by and among the Corporation and Fusion are hereby approved and\nthe Authorized  Officers are authorized to execute and deliver the  Registration\nRights Agreement  (pursuant to the terms of the Purchase  Agreement),  with such\namendments,  changes, additions and deletions as the Authorized Officer may deem\nappropriate  and  approve  on behalf of, an  Corporation,  such  approval  to be\nconclusively evidenced by the signature of an Authorized Officer thereon; and\n\n         FURTHER RESOLVED, that the terms and provisions of the Form of Transfer\nAgent Instructions (the  \"Instructions\")  are hereby approved and the Authorized\nOfficers are authorized to execute and deliver the Instructions (pursuant to the\nterms of the Purchase Agreement),  with such amendments,  changes, additions and\ndeletions as the Authorized  Officers may deem appropriate and approve on behalf\nof, the Corporation, such approval to be conclusively evidenced by the signature\nof an Authorized Officer thereon; and\n\n\n                                       36\n\n\n                         Execution of Purchase Agreement\n\n         FURTHER  RESOLVED,  that the Corporation be and it hereby is authorized\nto execute the Purchase Agreement  providing for the purchase of common stock of\nthe Corporation having an aggregate value of up to $____________; and\n\n                            Issuance of Common Stock\n\n         FURTHER  RESOLVED,  that the Corporation is hereby  authorized to issue\nthe  Commitment  Shares (as defined in the Purchase  Agreement)  and that,  upon\nissuance of the  Commitment  Shares  pursuant  to the  Purchase  Agreement,  the\nCommitment  Shares  shall be duly  authorized,  validly  issued,  fully paid and\nnonassessable with no personal liability attaching to the ownership thereof; and\n\n         FURTHER   RESOLVED,   that  the  Corporation  shall  initially  reserve\n__________  shares of Common Stock for issuance as Additional  Commitment Shares\nunder the Purchase Agreement.\n\n         FURTHER  RESOLVED,  that the Corporation is hereby  authorized to issue\nshares of Common  Stock upon the  purchase  of shares of Common  Stock up to the\navailable  amount  under the  Purchase  Agreement  (the  \"Purchase  Shares\")  in\naccordance  with the terms of the Purchase  Agreement and that, upon issuance of\nthe Purchase Shares pursuant to the Purchase Agreement, the Purchase Shares will\nbe duly  authorized,  validly  issued,  fully  paid  and  nonassessable  with no\npersonal liability attaching to the ownership thereof; and\n\n         FURTHER   RESOLVED,   that  the  Corporation  shall  initially  reserve\n__________  shares of Common  Stock for  issuance as Purchase  Shares  under the\nPurchase Agreement.\n\n                             Registration Statement\n\n         The  management of the  Corporation  has prepared an initial draft of a\nRegistration  Statement on Form ___ (the  \"Registration  Statement\") in order to\nregister the sale of the Purchase Shares,  the Commitment Shares  (collectively,\nthe \"Shares\"); and\n\n         The Board of  Directors  has  determined  to approve  the  Registration\nStatement and to authorize the  appropriate  officers of the Corporation to take\nall such actions as they may deem appropriate to effect the offering; and\n\n         NOW, THEREFORE,  BE IT RESOLVED, that the officers and directors of the\nCorporation  be, and each of them hereby is,  authorized and directed,  with the\nassistance of counsel and accountants for the Corporation,  to prepare,  execute\nand file with the  Securities and Exchange  Commission  (the  \"Commission\")  the\nRegistration   Statement,   which   Registration   Statement   shall   be  filed\nsubstantially in the form presented to the Board of Directors, with such changes\ntherein as the Chief Executive  Officer of the Corporation or any Vice President\nof  the  Corporation  shall  deem  desirable  and in the  best  interest  of the\nCorporation and its shareholders  (such officer's  execution  thereof  including\nsuch changes shall be deemed to evidence conclusively such determination); and\n\n\n                                       37\n\n\n         FURTHER RESOLVED,  that the officers of the Corporation be, and each of\nthem hereby is,  authorized  and  directed,  with the  assistance of counsel and\naccountants  for  the  Corporation,  to  prepare,  execute  and  file  with  the\nCommission all amendments,  including post-effective amendments, and supplements\nto the  Registration  Statement,  and  all  certificates,  exhibits,  schedules,\ndocuments and other instruments relating to the Registration  Statement, as such\nofficers  shall deem  necessary or  appropriate  (such  officer's  execution and\nfiling thereof shall be deemed to evidence conclusively such determination); and\n\n         FURTHER RESOLVED,  that the execution of the Registration Statement and\nof any amendments and  supplements  thereto by the officers and directors of the\nCorporation  be,  and  the  same  hereby  is,  specifically   authorized  either\npersonally or by the Authorized  Officers as such  officer's or director's  true\nand lawful attorneys-in-fact and agents; and\n\n         FURTHER RESOLVED, that the Authorized Officers are hereby is designated\nas \"Agent for Service\" of the  Corporation in connection  with the  Registration\nStatement  and the  filing  thereof  with  the  Commission,  and the  Authorized\nOfficers hereby are,  authorized to receive  communications and notices from the\nCommission with respect to the Registration Statement; and\n\n         FURTHER RESOLVED,  that the officers of the Corporation be, and each of\nthem hereby is, authorized and directed to pay all fees, costs and expenses that\nmay  be  incurred  by  the  Corporation  in  connection  with  the  Registration\nStatement; and\n\n         FURTHER RESOLVED,  that it is desirable and in the best interest of the\nCorporation  that the  Shares be  qualified  or  registered  for sale in various\nstates;  that the  officers of the  Corporation  be, and each of them hereby is,\nauthorized to determine the states in which appropriate action shall be taken to\nqualify  or  register  for sale all or such part of the  Shares as they may deem\nadvisable;  that said  officers  be, and each of them hereby is,  authorized  to\nperform  on  behalf  of the  Corporation  any and all such acts as they may deem\nnecessary or advisable in order to comply with the  applicable  laws of any such\nstates, and in connection therewith to execute and file all requisite papers and\ndocuments,  including, but not limited to, applications,  reports, surety bonds,\nirrevocable  consents,  appointments  of  attorneys  for  service of process and\nresolutions; and the execution by such officers of any such paper or document or\nthe doing by them of any act in  connection  with the  foregoing  matters  shall\nconclusively  establish  their  authority  therefor from the Corporation and the\napproval and  ratification  by the  Corporation  of the papers and  documents so\nexecuted and the actions so taken; and\n\n         FURTHER  RESOLVED,  that if, in any state  where the  securities  to be\nregistered or qualified for sale to the public,  or where the  Corporation is to\nbe registered in connection with the public offering of the Shares, a prescribed\nform of  resolution  or  resolutions  is  required to be adopted by the Board of\nDirectors,  each such  resolution  shall be  deemed  to have been and  hereby is\nadopted,  and the Secretary is hereby  authorized to certify the adoption of all\nsuch resolutions as though such resolutions were now presented to and adopted by\nthe Board of Directors; and\n\n                                       38\n\n\n         FURTHER  RESOLVED,  that  the  officers  of the  Corporation  with  the\nassistance of counsel be, and each of them hereby is, authorized and directed to\ntake all necessary  steps and do all other things  necessary and  appropriate to\neffect the listing of the Shares on The Nasdaq National Market.\n\n                               Approval of Actions\n\n         RESOLVED, that, without limiting the foregoing, the Authorized Officers\nare, and each of them hereby is, authorized and directed to proceed on behalf of\nthe Corporation  and to take all such steps as deemed  necessary or appropriate,\nwith the  advice  and  assistance  of  counsel,  to  cause  the  Corporation  to\nconsummate  the  agreements  referred to herein and to perform  its  obligations\nunder such agreements; and\n\n         RESOLVED,  that the Authorized Officers be, and each of them hereby is,\nauthorized,  empowered  and  directed  on  behalf  of  and in  the  name  of the\nCorporation,  to take or cause  to be taken  all  such  further  actions  and to\nexecute and  deliver or cause to be  executed  and  delivered  all such  further\nagreements,   amendments,   documents,    certificates,    reports,   schedules,\napplications,  notices,  letters and  undertakings and to incur and pay all such\nfees and expenses as in their judgment  shall be necessary,  proper or desirable\nto carry into  effect  the  purpose  and intent of any and all of the  foregoing\nresolutions, and that all actions heretofore taken by any officer or director of\nthe  Corporation  in  connection  with  the  transactions  contemplated  by  the\nagreements  described herein are hereby approved,  ratified and confirmed in all\nrespects.\n\n\n\n\n\n\n\n\n\n\n\n                                       39\n\n\n\n                                    EXHIBIT E\n\n                         FORM OF SECRETARY'S CERTIFICATE\n\n         This  Secretary's   Certificate   (\"Certificate\")  is  being  delivered\npursuant to Section 7(k) of that certain Common Stock Purchase  Agreement  dated\nas  of  __________,   (\"Common  Stock  Purchase  Agreement\"),   by  and  between\nPURCHASEPRO.COM,  INC., a Nevada  corporation (the \"Company\") and FUSION CAPITAL\nFUND II, LLC (the \"Buyer\"),  pursuant to which the Company may sell to the Buyer\nup to Fifteen Million Dollars  ($15,000,000)  of the Company's Common Stock, par\nvalue $_____ per share (the \"Common Stock\"). Terms used herein and not otherwise\ndefined  shall have the meanings  ascribed to them in the Common Stock  Purchase\nAgreement.\n\nThe  undersigned,  ____________,  Secretary of the Company,  hereby certifies as\nfollows:\n\n                  1. I am the  Secretary of the Company and make the  statements\n         contained in this Secretary's Certificate.\n\n                  2.  Attached  hereto  as  Exhibit  A and  Exhibit  B are true,\n         correct and complete  copies of the  Company's  bylaws  (\"Bylaws\")  and\n         Certificate  of  Incorporation  (\"Articles\"),  in each case, as amended\n         through the date  hereof,  and no action has been taken by the Company,\n         its directors, officers or shareholders, in contemplation of the filing\n         of any  further  amendment  relating  to or  affecting  the  Bylaws  or\n         Articles.\n\n                  3. Attached hereto as Exhibit C are true, correct and complete\n         copies of the resolutions duly adopted by the Board of Directors of the\n         Company  on  _____________,  at which a quorum was  present  and acting\n         throughout.  Such  resolutions  have  not  been  amended,  modified  or\n         rescinded and remain in full force and effect and such  resolutions are\n         the only  resolutions  adopted by the Company's Board of Directors,  or\n         any committee  thereof,  or the shareholders of the Company relating to\n         or affecting (i) the entering into and  performance of the Common Stock\n         Purchase Agreement, or the issuance,  offering and sale of the Purchase\n         Shares and the  Commitment  Shares and (ii) and the  performance of the\n         Company  of  its  obligation   under  the   Transaction   Documents  as\n         contemplated therein.\n\n                  4. As of the date hereof, the authorized,  issued and reserved\n         capital stock of the Company is as set forth on Exhibit D hereto.\n\n\n\n                                       40\n\n\n\n\n                  IN WITNESS  WHEREOF,  I have hereunder  signed my name on this\n___ day of ____________.\n                                                                        \n                                              -------------------------\n                                                     Secretary\n\n\n         The undersigned as ___________ of __________,  a ________  corporation,\nhereby certifies that ____________ is the duly elected, appointed, qualified and\nacting  Secretary of _________,  and that the signature  appearing  above is his\ngenuine signature.\n\n\n                                           -----------------------------------\n\n\n\n                                       41\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8609],"corporate_contracts_industries":[],"corporate_contracts_types":[9622,9627],"class_list":["post-43359","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-purchaseprocom-inc","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43359","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43359"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43359"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43359"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43359"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}