SECURITIES PURCHASE AGREEMENT
                          -----------------------------



         This SECURITIES PURCHASE AGREEMENT  ("Agreement") is entered into as of
August 29, 1997, by and between LaserSight Incorporated,  a Delaware corporation
(the "Company"),  with  headquarters  located at 12161 Lackland Road, St. Louis,
Missouri and the  purchasers  ("Purchasers")  set forth on the  execution  pages
hereof, with regard to the following:

                                    RECITALS
                                    --------

         A. The  Company  and  Purchasers  are  executing  and  delivering  this
Agreement in reliance upon the exemption from securities  registration  afforded
by the provisions of Regulation D ("Regulation D"), as promulgated by the United
States  Securities and Exchange  Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act").

         B.  Purchasers  desire to (a) purchase,  upon the terms and  conditions
stated in this Agreement,  Series B Convertible Participating Preferred Stock of
the Company set forth in the Certificate of Designations, Preferences and Rights
(the "Certificate of Designation")  attached hereto as Exhibit A (the "Preferred
Stock" or the "Convertible Securities"),  which shall be convertible into shares
of the Company's  Common Stock,  par value $.001 per share (the "Common Stock"),
and (b) to receive, in consideration for such purchase,  Stock Purchase Warrants
(the "Warrants"), in the form attached hereto as Exhibit B, to acquire shares of
Common  Stock.  The  shares of  Common  Stock  issuable  upon  conversion  of or
otherwise  pursuant  to the  Preferred  Stock  are  referred  to  herein  as the
"Conversion  Shares" and the shares of Common Stock issuable upon exercise of or
otherwise  pursuant to the Warrants are referred to herein as "Warrant  Shares".
The Preferred Stock, the Warrants,  the Warrant Shares and the Conversion Shares
are collectively referred to herein as the "Securities."

         C. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration  Rights Agreement
in the form attached hereto as Exhibit C (the "Registration  Rights Agreement"),
pursuant to which the Company has agreed to provide certain  registration rights
under the Securities Act, the rules and regulations  promulgated  thereunder and
applicable state securities laws.

                                   AGREEMENTS
                                   ----------

         NOW, THEREFORE, in consideration of their respective promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby  acknowledged,  the  Company  and  Purchasers  hereby  agree as
follows:



<PAGE>

                                    ARTICLE I
                      PURCHASE AND SALE OF PREFERRED STOCK

         I.1 Purchase of Preferred Stock. Subject to the terms and conditions of
this Agreement,  the issuance, sale and purchase of the Preferred Stock shall be
consummated in a "Closing".  The purchase price (the "Purchase Price") per share
of Preferred Stock shall be $10,000. On the date of the Closing,  subject to the
satisfaction  or waiver of the  conditions set forth in Articles VI and VII, the
Company shall issue and sell to each  Purchaser,  and each  Purchaser  severally
agrees to purchase from the Company, the number of shares of Preferred Stock set
forth  on the  signature  page  executed  by such  Purchaser.  Each  Purchaser's
obligation to purchase  Preferred Shares hereunder is distinct and separate from
each  other  Purchaser's  obligation  to  purchase,  and no  Purchaser  shall be
required  to purchase  hereunder  more than the number of  Preferred  Shares set
forth on such  Purchaser's  signature  page. The obligations of the Company with
respect to each Purchaser  shall be separate from the  obligations of each other
Purchaser  and,  except as provided  in Section  6.1(iii)  hereof,  shall not be
conditioned as to any Purchaser upon the performance of obligations of any other
Purchaser.

         I.2 Form of Payment.  Each Purchaser  shall pay the aggregate  Purchase
Price for the Preferred Stock being purchased by such Purchaser by wire transfer
to the  account  designated  pursuant to the Escrow  Agreement  by and among the
Company, each Purchaser and the escrow agent ("Escrow Agent") designated therein
in the form attached hereto as Exhibit D ("Escrow  Agreement")  upon delivery to
the Escrow Agent of the Preferred Stock and the Warrants, all in accordance with
the terms of the Escrow Agreement.

         I.3  Closing  Date.  Subject  to the  satisfaction  (or  waiver) of the
conditions  set forth in Articles VI and VII below,  and further  subject to the
terms and conditions of the Escrow Agreement, the date and time of the issuance,
sale and purchase of the  Convertible  Securities and Warrants  pursuant to this
Agreement shall be at 10:00 a.m. Chicago time, on August 29, 1997.

         I.4  Warrants.  In  consideration  of the purchase by Purchasers of the
Convertible Securities, the Company shall at the Closing issue to Purchasers, in
the aggregate, Warrants to acquire seven hundred fifty thousand (750,000) shares
of Common  Stock (in an amount  proportionate  to each  Purchaser's  purchase of
Convertible Securities).

                                   ARTICLE II
                   PURCHASER'S REPRESENTATIONS AND WARRANTIES

         Each Purchaser  represents and warrants,  solely with respect to itself
and its purchase  hereunder  and not with respect to any other  Purchaser or the
purchase  hereunder by any other  Purchaser (and no Purchaser shall be deemed to
make or have any liability for any  representation or warranty made by any other
Purchaser),  to the Company as set forth in this Article II. No Purchaser  makes
any other  representations or warranties,  express or implied, to the Company in
connection  with the  transactions  contemplated  hereby  and any and all  prior
representations and warranties,  if any, which may have been made by a Purchaser
to the Company in connection with the transactions  contemplated hereby shall be
deemed to have been merged in this Agreement and any such prior  representations
and  warranties,  if any,  shall not survive the  execution and delivery of this
Agreement.
<PAGE>

         II.1  Investment  Purpose.  Purchaser  is  purchasing  the  Convertible
Securities and the Warrants for  Purchaser's own account for investment only and
not with a view toward or in  connection  with the public  sale or  distribution
thereof.  Purchaser will not,  directly or indirectly,  offer,  sell,  pledge or
otherwise  transfer  the  Convertible  Securities  or Warrants  or any  interest
therein except  pursuant to transactions  that are exempt from the  registration
requirements of the Securities Act and/or sales  registered under the Securities
Act.  Purchaser  understands  that Purchaser must bear the economic risk of this
investment  indefinitely,  unless the Securities are registered  pursuant to the
Securities Act and any  applicable  state  securities  laws or an exemption from
such registration is available, and that the Company has no present intention of
registering any such Securities  other than as contemplated by the  Registration
Rights  Agreement.  By making  the  representations  in this  Section  2.1,  the
Purchaser  does not  agree  to hold  the  Securities  for any  minimum  or other
specific term and reserves the right to dispose of the Securities at any time in
accordance  with or pursuant to a  registration  statement or an exemption  from
registration under the Securities Act and any applicable state securities laws.

         II.2 Accredited Investor Status.  Purchaser is an "accredited investor"
as that  term is  defined  in Rule  501(a) of  Regulation  D and  Purchaser  has
indicated on the  signature  page hereto under which item of Schedule 1 attached
hereto it qualifies as an "accredited investor."

         II.3 Reliance on Exemptions. Purchaser understands that the Convertible
Securities and Warrants are being offered and sold to Purchaser in reliance upon
specific exemptions from the registration  requirements of United States federal
and state  securities  laws and that the  Company is relying  upon the truth and
accuracy of, and Purchaser's  compliance with, the representations,  warranties,
agreements,  acknowledgments and understandings of Purchaser set forth herein in
order to determine the  availability  of such  exemptions and the eligibility of
Purchaser to acquire the Convertible Securities and Warrants.

         II.4  Information.  Purchaser  and its counsel have been  furnished all
materials  relating to the business,  finances and operations of the Company and
materials  relating  to the offer  and sale of the  Securities  which  have been
specifically requested by Purchaser,  including without limitation the Company's
Annual  Report on Form 10-K for the Year  ended  December  31,  1997,  Quarterly
Reports on Form 10-Q for the periods  ended  March 31,  1997 and June 30,  1997,
Current  Reports on Form 8-K filed with the Securities  and Exchange  Commission
("SEC") on February  25,  March 18, March 27, April 8, April 25, July 1, July 31
and August 13,  1997,  the  description  of the Common  Stock  contained  in the
Company's Form 8-A/A (Amendment No. 2) filed with the SEC on April 26, 1996, and
Proxy Statement dated May 21, 1997 (such documents collectively,  the "Furnished
SEC Documents"). Purchaser has been afforded the opportunity to ask questions of

<PAGE>

the  Company  and has  received  what  Purchaser  believes  to be  complete  and
satisfactory answers to any such inquiries. Neither such inquiries nor any other
due diligence investigation conducted by Purchaser or any of its representations
shall  modify,  amend  or  affect  Purchaser's  right  to rely on the  Company's
representations and warranties  contained in Article III. Purchaser  understands
that  Purchaser's  investment in the Securities  involves a high degree of risk,
including  without  limitation the risks and  uncertainties  disclosed under the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operations -- Uncertainties and Other Issues" in the Furnished SEC Documents.

         II.5 Governmental Review.  Purchaser  understands that no United States
federal  or state  agency or any other  government  or  governmental  agency has
passed upon or made any recommendation or endorsement of the Securities.

         II.6  Transfer  or  Resale.  Purchaser  understands  that (i) except as
provided in the Registration Rights Agreement,  the Securities have not been and
are not being  registered under the Securities Act or any state securities laws,
and  may  not  be  offered,   sold,  pledged  or  otherwise  transferred  unless
subsequently  registered  thereunder or an exemption from such  registration  is
available  (which  exemption the Company  expressly agrees may be established as
contemplated  in clauses  (b) and (c) of Section 5.1  hereof);  (ii) any sale of
such  Securities  made in  reliance on Rule 144 under the  Securities  Act (or a
successor  rule) ("Rule 144") may be made only in  accordance  with the terms of
Rule  144 and  further,  if  Rule  144 is not  applicable,  any  resale  of such
Securities without  registration under the Securities Act under circumstances in
which the seller may be deemed to be an underwriter  (as that term is defined in
the Securities  Act) may require  compliance with some other exemption under the
Securities  Act or the rules and  regulations of the SEC  thereunder;  and (iii)
neither  the Company nor any other  person is under any  obligation  to register
such  Securities  under the  Securities Act or any state  securities  laws or to
comply with the terms and conditions of any exemption  thereunder (in each case,
other than pursuant to this Agreement or the Registration Rights Agreement).

         II.7 Legends.  Purchaser understands that, subject to Article V hereof,
the  certificates  for the Preferred  Stock and Warrants and, until such time as
the  Conversion  Shares  and  Warrant  Shares  have  been  registered  under the
Securities Act as contemplated by the Registration Rights Agreement or otherwise
may be sold by Purchaser pursuant to Rule 144 (subject to and in accordance with
the  procedures  specified  in  Article  V  hereof),  the  certificates  for the
Conversion  Shares  and  Warrant  Shares  will bear a  restrictive  legend  (the
"Legend") in the following form:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
         ANY STATE OF THE UNITED STATES.  THE SECURITIES  REPRESENTED HEREBY MAY
         NOT BE OFFERED OR SOLD OR  OTHERWISE  TRANSFERRED  IN THE ABSENCE OF AN
         EFFECTIVE  REGISTRATION  STATEMENT FOR THE SECURITIES  UNDER APPLICABLE
         SECURITIES LAWS OR UNLESS OFFERED,  SOLD OR TRANSFERRED  PURSUANT TO AN
         AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.
<PAGE>

         II.8  Authorization;  Enforcement.  This Agreement and the Registration
Rights Agreement have been duly and validly  authorized,  executed and delivered
on  behalf  of  Purchaser  and are valid and  binding  agreements  of  Purchaser
enforceable in accordance with their respective terms.

         II.9 Residency.  Purchaser is a resident of the  jurisdiction set forth
under Purchaser's name on the signature page hereto executed by Purchaser.

                                   ARTICLE III
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

         The Company represents and warrants to each Purchaser that:

         III.1  Organization  and  Qualification.  Each of the  Company  and its
subsidiaries is a corporation duly organized and existing in good standing under
the laws of the jurisdiction in which it is incorporated,  and has the requisite
corporate  power to own its properties and to carry on its business as now being
conducted.  The  Company and each of its  subsidiaries  is duly  qualified  as a
foreign corporation to do business and is in good standing in every jurisdiction
where the  failure so to qualify  or be in good  standing  would have a Material
Adverse Effect.  "Material  Adverse Effect" means any material adverse effect on
the business, operations,  properties, financial condition, operating results or
prospects  of  the  Company  and  its  subsidiaries,  taken  as  a  whole  on  a
consolidated basis or on the transactions contemplated hereby.

         III.2  Authorization;  Enforcement.  (a) The Company has the  requisite
corporate  power and authority to enter into and perform this  Agreement and the
Registration  Rights  Agreement,  and to issue, sell and perform its obligations
with respect to the Preferred  Stock and Warrants in  accordance  with the terms
hereof and the terms of the  Certificate of Designation  and Warrants,  to issue
the  Conversion  Shares  in  accordance  with the terms  and  conditions  of the
Certificate  of Designation  and to issue Warrant Shares in accordance  with the
terms  and  conditions  of  the  Warrants;  (b)  the  execution,   delivery  and
performance  of this  Agreement  and the  Registration  Rights  Agreement by the
Company and the consummation by it of the transactions  contemplated  hereby and
thereby  (including  without  limitation the issuance of the Preferred Stock and
the issuance and reservation  for issuance of the Conversion  Shares and Warrant

<PAGE>

Shares) have been duly authorized by all necessary  corporate action and, except
as set forth on Schedule  3.2 hereof or except as  contemplated  by Section 4.12
hereof,  no  further  consent  or  authorization  of the  Company,  its board of
directors,  or its stockholders or any other person,  body or agency is required
with respect to any of the transactions  contemplated hereby or thereby (whether
under rules of the Nasdaq National Market ("Nasdaq"),  the National  Association
of Securities Dealers or otherwise); (c) this Agreement, the Registration Rights
Agreement, certificates for the Preferred Stock, and the Warrants have been duly
executed and delivered by the Company; and (d) this Agreement,  the Registration
Rights Agreement,  the Preferred Stock, and the Warrants constitute legal, valid
and  binding  obligations  of the  Company  enforceable  against  the Company in
accordance  with their  respective  terms,  except  (i) to the extent  that such
validity or  enforceability  may be subject to or  affected  by any  bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting  generally the  enforcement  of,  creditors'  rights or remedies of
creditors  generally,  or by other equitable  principles of general application,
and (ii) as rights to indemnity and contribution  under the Registration  Rights
Agreement may be limited by Federal or state securities laws.

         III.3 Capitalization.  The capitalization of the Company as of the date
hereof,  including the authorized capital stock, the number of shares issued and
outstanding,  the  number  of  shares  reserved  for  issuance  pursuant  to the
Company's  stock  option  plans,  the  number of shares  reserved  for  issuance
pursuant  to  securities  (other  than the  Preferred  Stock  and the  Warrants)
exercisable  for, or convertible  into or exchangeable  for any shares of Common
Stock and the number of shares to be reserved for issuance  upon  conversion  of
the  Preferred  Stock and exercise of the Warrants is set forth on Schedule 3.3.
All of such outstanding shares of capital stock have been, or upon issuance will
be, validly issued, fully paid and nonassessable.  No shares of capital stock of
the Company  (including  the  Preferred  Stock,  the  Conversion  Shares and the
Warrant Shares) are subject to preemptive  rights or any other similar rights of
the  stockholders  of the  Company  or any  liens  or  encumbrances.  Except  as
disclosed in Schedule  3.3, as of the date of this  Agreement,  (i) there are no
outstanding  options,  warrants,  scrip,  rights  to  subscribe  for,  calls  or
commitments  of any  character  whatsoever  relating to, or securities or rights
convertible into or exercisable or exchangeable for, any shares of capital stock
of  the  Company  or  any  of  its  subsidiaries,  or  contracts,   commitments,
understandings  or arrangements by which the Company or any of its  subsidiaries
is or may  become  bound to issue  additional  shares  of  capital  stock of the
Company  or any  of its  subsidiaries,  and  (ii)  there  are no  agreements  or
arrangements  under which the Company or any of its subsidiaries is obligated to
register the sale of any of its or their  securities  under the  Securities  Act
(except  the  Registration  Rights  Agreement).  The Company  has  furnished  to
Purchaser true and correct copies of the Company's  Certificate of Incorporation
as in  effect  on the date  hereof  ("Certificate  of  Incorporation"),  and the
Company's  By-laws as in effect on the date hereof (the "By-laws").  The Company
has set forth on Schedule 3.3 all  instruments  and  agreements  (other than the
Certificate of Incorporation and By-laws) governing securities  convertible into
or exercisable or exchangeable  for Common Stock of the Company (and the Company
shall provide to Purchaser  copies thereof upon the request of  Purchaser).  The
Company shall provide  Purchaser  with a written  update of this  representation
signed by the Company's  Chief Executive  Officer or Chief Financial  Officer on
behalf of the Company as of the date of the Closing.
<PAGE>

         III.4 Issuance of Shares.  The Conversion Shares and Warrant Shares are
duly authorized and (except for the issuance of shares of Common Stock in excess
of twenty percent (20%) of the Common Stock outstanding at the Closing, which is
subject to the  completion  of the  actions to be taken by the  Company  and its
stockholders  after the Closing pursuant to Section 4.12) reserved for issuance,
and, upon  conversion of the Preferred Stock in accordance with the terms of the
Certificate of  Designation  or the exercise of the warrants in accordance  with
the terms  thereof,  as  applicable,  will be  validly  issued,  fully  paid and
non-assessable,  and free from all taxes, liens, claims and encumbrances imposed
or suffered by the Company and will not be subject to preemptive rights or other
similar rights of stockholders of the Company.  The Preferred Stock and Warrants
are duly authorized and validly issued,  fully paid and nonassessable,  and free
from all liens,  claims and encumbrances  imposed or suffered by the Company and
will not be subject to preemptive rights or other similar rights of stockholders
of the Company.

         III.5 No  Conflicts.  Except for the issuance of shares of Common Stock
in excess of twenty  percent (20%) of the  outstanding  Common  Stock,  which is
subject to the  completion  of the  actions to be taken by the  Company  and its
stockholders after the Closing pursuant to Section 4.12, the execution, delivery
and performance of this Agreement and the  Registration  Rights Agreement by the
Company, and the consummation by the Company of transactions contemplated hereby
and thereby  (including,  without  limitation,  the issuance and reservation for
issuance, as applicable,  of the Preferred Stock,  Warrants,  Warrant Shares and
Conversion  Shares)  will not (a) result in a violation  of the  Certificate  of
Incorporation  or By-laws or (b) conflict  with,  or constitute a default (or an
event which with notice or lapse of time or both would become a default)  under,
or  give to  others  any  rights  of  termination,  amendment,  acceleration  or
cancellation of, any agreement,  indenture or instrument to which the Company or
any of its  subsidiaries  is a party, or result in a violation of any law, rule,
regulation,  order,  judgment  or  decree  (including  U.S.  federal  and  state
securities  laws  and  regulations)  applicable  to  the  Company  or any of its
subsidiaries,  or by which any  property  or asset of the  Company or any of its
subsidiaries,  is  bound  or  affected  (except  for  such  possible  conflicts,
defaults, terminations, amendments, accelerations,  cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse Effect).
Neither  the  Company  nor  any  of  its  subsidiaries  is in  violation  of its
Certificate of Incorporation or other organizational  documents, and neither the
Company nor any of its  subsidiaries,  is in default  (and no event has occurred
which has not been waived which, with notice or lapse of time or both, would put
the Company or any of its subsidiaries in default) under, nor has there occurred
any event  giving  others  (with  notice or lapse of time or both) any rights of
termination,   amendment,   acceleration  or  cancellation  of,  any  agreement,
indenture or  instrument  to which the Company or any of its  subsidiaries  is a
party,  except  for  possible  violations,  defaults  or  rights  as would  not,

<PAGE>

individually or in the aggregate, have a Material Adverse Effect. The businesses
of the Company and its subsidiaries  are not being  conducted,  and shall not be
conducted so long as a Purchaser owns any of the Securities, in violation of any
law,  ordinance or regulation of any  governmental  entity,  except for possible
violations  the sanctions for which either singly or in the aggregate  would not
have a Material  Adverse Effect.  Except as set forth on Schedule 3.5, or except
(A) such as may be required  under the  Securities  Act in  connection  with the
performance  of  the  Company's   obligations  under  the  Registration   Rights
Agreement,  (B) such as may be  required  to be made  from time to time with the
Secretary of State of the State of Delaware in connection  with the  performance
of the Company's contingent  obligations under the Certificate of Designation to
increase the number of the  authorized  shares of Common Stock,  (C) filing of a
Form D with the SEC, and (D)  compliance  with the state  securities or Blue Sky
laws of  applicable  jurisdictions,  the  Company is not  required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or  governmental  agency or any  regulatory or  self-regulatory  agency in
order for it to execute,  deliver or perform any of its  obligations  under this
Agreement or the Registration  Rights Agreement or to perform its obligations in
accordance with the terms hereof or thereof.  The Company is not in violation of
the listing  requirements of Nasdaq and does not reasonably  anticipate that the
Common Stock will be delisted by Nasdaq for the foreseeable future.

         III.6 SEC  Documents.  Except  as  disclosed  in  Schedule  3.6,  since
December 31, 1995, the Company has timely filed all reports,  schedules,  forms,
statements and other documents  required to be filed by it with the SEC pursuant
to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") (all of the foregoing filed after December 31, 1995 and all
exhibits  included  therein and financial  statements and schedules  thereto and
documents  incorporated  by reference  therein,  being referred to herein as the
"SEC Documents").  The Company has delivered to each Purchaser true and complete
copies of the  Furnished  SEC  Documents,  except for  exhibits,  schedules  and
incorporated documents. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Exchange Act and the rules
and  regulations  of the  SEC  promulgated  thereunder  applicable  to  the  SEC
Documents,  and none of the SEC Documents,  at the time they were filed with the
SEC,  contained  any untrue  statement of a material  fact or omitted to state a
material  fact  required to be stated  therein or necessary in order to make the
statements  therein,  in light of the circumstances  under which they were made,
not  misleading.  None of the statements made in any such SEC Documents which is
required to be updated or amended under  applicable  law has not been so updated
or  amended.  The  financial  statements  of the  Company  included  in the  SEC
Documents  have  been  prepared  in  accordance  with  U.S.  generally  accepted
accounting  principles,  consistently  applied, and the rules and regulations of
the SEC during the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they do not include footnotes or are condensed
or summary  statements) and present  accurately and completely the  consolidated
financial  position of the Company and its  consolidated  subsidiaries as of the

<PAGE>

dates thereof and the  consolidated  results of their  operations and cash flows
for the periods then ended  (subject,  in the case of unaudited  statements,  to
normal, immaterial year-end audit adjustments).  Except as set forth in a manner
clearly  evident to a  sophisticated  institutional  investor  in the  financial
statements or the notes thereto of the Company  included in the SEC Documents or
in the Company's  Current Report on Form 8-K as filed with the SEC on August 13,
1997, the Company has no  liabilities,  contingent or otherwise,  other than (i)
liabilities  incurred in the ordinary course of business  subsequent to the date
of  such  financial   statements  and  (ii)  obligations   under  contracts  and
commitments  incurred in the ordinary  course of business and not required under
generally  accepted  accounting  principles  to be reflected  in such  financial
statements,  in each case of clause (i) and (ii) next above which,  individually
or in the  aggregate,  are not material to the  financial  condition,  business,
operations,  properties,  operating  results or prospects of the Company and its
subsidiaries. To the extent required by the rules of the SEC applicable thereto,
the  SEC  Documents  contain  a  complete  and  accurate  list  of all  material
undischarged written or oral contracts,  agreements, leases or other instruments
to which the Company or any subsidiary is a party or by which the Company or any
subsidiary  is bound or to which any of the  properties or assets of the Company
or any  subsidiary  is  subject  (each a  "Contract").  Except  as set  forth in
Schedule 3.6, none of the Company, its subsidiaries or, to the best knowledge of
the Company,  any of the other parties thereto, is in breach or violation of any
Contract,  which breach or violation would have a Material  Adverse  Effect.  No
event,  occurrence or condition exists which, with the lapse of time, the giving
of notice,  or both,  would become a default by the Company or its  subsidiaries
thereunder which would have a Material Adverse Effect.

         III.7 Absence of Certain  Changes.  Since December 31, 1996,  there has
been no material  adverse  change and no  material  adverse  development  in the
business, properties,  operations, financial condition, results of operations or
prospects of the Company, except as disclosed in Schedule 3.7 or clearly evident
to a sophisticated institutional investor from the Furnished SEC Documents.

         III.8 Absence of Litigation.  Except as disclosed in Schedule 3.8 or as
clearly evident to a sophisticated institutional investor from the Furnished SEC
Documents, there is no action, suit, proceeding, inquiry or investigation before
or  by  any  court,   public  board,   government   agency,  or  self-regulatory
organization  or body pending or, to the  knowledge of the Company or any of its
subsidiaries,   threatened  against  or  affecting  the  Company,   any  of  its
subsidiaries,  or any  of  their  respective  directors  or  officers  in  their
capacities  as  such,  which  could  reasonably  be  expected  to  result  in an
unfavorable  decision,  ruling or finding  which  would have a Material  Adverse
Effect or would adversely affect the transactions contemplated by this Agreement
or any of the documents  contemplated hereby or which would adversely affect the
validity or  enforceability  of, or the  authority  or ability of the Company to
perform its obligations  under,  this Agreement or any of such other  documents.
There are no facts known to the Company which, if known by a potential  claimant
or governmental authority,  could reasonably be expected to give rise to a claim
or proceeding  which,  if asserted or conducted with results  unfavorable to the
Company or any of its  subsidiaries,  could  reasonably  be  expected  to have a
Material Adverse Effect.
<PAGE>

         III.9 Disclosure.  No information relating to or concerning the Company
set forth in this Agreement or contains an untrue  statement of a material fact.
No  information  relating to or  concerning  the Company set forth in any of the
Furnished SEC Documents contains a statement of material fact that was untrue as
of the date such  Furnished SEC Document was filed with the SEC. The Company has
not omitted to state a material fact  necessary in order to make the  statements
made  herein or  therein,  in light of the  circumstances  under which they were
made,  not  misleading.  Except  for  the  execution  and  performance  of  this
Agreement,  no material fact (within the meaning of the federal  securities laws
of the United  States and of  applicable  state  securities  laws)  exists  with
respect to the Company which has not been publicly disclosed.

         III.10 Acknowledgment Regarding Purchaser's Purchase of the Securities.
The Company  acknowledges and agrees that Purchaser is not acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to
this Agreement or the transactions  contemplated hereby, that this Agreement and
the transaction contemplated hereby, and the relationship between each Purchaser
and the Company,  are  "arms-length",  and that any statement  made by Purchaser
(except as set forth in Article II), or any of its representatives or agents, in
connection with this Agreement and the transactions  contemplated  hereby is not
advice or a recommendation,  is merely incidental to Purchaser's purchase of the
Securities  and has not been relied upon as such in any way by the Company,  its
officers or directors.  The Company  further  represents  to Purchaser  that the
Company's   decision  to  enter  into  this   Agreement  and  the   transactions
contemplated  hereby have been based solely on an independent  evaluation by the
Company and its representatives.

         III.11 S-3 Registration.  The Company is currently eligible to register
the resale by Purchaser  of the Warrant  Shares and the  Conversion  Shares on a
registration statement on Form S-3 under the Securities Act.

         III.12 No General Solicitation. Neither the Company nor any distributor
participating on the Company's behalf in the  transactions  contemplated  hereby
(if any) nor any person  acting for the Company,  or any such  distributor,  has
conducted  any  "general  solicitation,"  as  described  in  Rule  502(c)  under
Regulation D, with respect to any of the Securities being offered hereby.

         III.13 No  Integrated  Offering.  Neither the  Company,  nor any of its
affiliates,  nor any  person  acting on its or their  behalf,  has  directly  or
indirectly  made any offers or sales of any security or solicited  any offers to
buy any security under  circumstances that would prevent the parties hereto from
consummating the transactions  contemplated hereby pursuant to an exemption from
registration  under the  Securities Act pursuant to the provisions of Regulation

<PAGE>

D. The  transactions  contemplated  hereby  are  exempt  from  the  registration
requirements of the Securities Act, assuming the accuracy of the representations
and  warranties  herein  contained of each  Purchaser and of Shoreline  Pacific,
Financial West Group ("Shoreline") in its agreement with the Company dated as of
August 29, 1997 (a copy of which is attached  as  Schedule  3.13  hereto) to the
extent relevant for such determination.

         III.14 No Brokers.  The  Company  has taken no action  which would give
rise to any claim by any  person for  brokerage  commissions,  finder's  fees or
similar  payments by Purchaser  relating to this  Agreement or the  transactions
contemplated hereby,  except for dealings with Shoreline the fees of which shall
be paid in full by the Company.  The Company will  indemnify each Purchaser from
and against any fees and expenses sought or other claims made by Shoreline.

         III.15  Acknowledgment  of Dilution.  The number of  Conversion  Shares
issuable upon  conversion of the Preferred Stock may increase  substantially  in
certain  circumstances,  including the circumstance wherein the trading price of
the Common Stock  declines.  All of the  appropriate  executive  officers of the
Company,  who are the  President  and  Chief  Executive  Officer  and the  Chief
Financial Officer,  and the directors of the Company understand and have studied
the nature of the securities being sold hereunder and recognize that they have a
potential  dilutive effect.  The board of directors of the Company has concluded
in its good faith business  judgment that such issuance is in the best interests
of the Company. The Company acknowledges that its obligation to issue Conversion
Shares upon conversion of the Preferred Stock is binding upon it and enforceable
regardless  of the  dilution  that  such  issuance  may  have  on the  ownership
interests of other stockholders.

         III.16 Intellectual Property.  Each of the Company and its subsidiaries
owns or possesses  adequate and enforceable  rights to use all material patents,
patent applications,  trademarks,  trademark applications,  trade names, service
marks, copyrights,  copyright applications,  licenses, know-how (including trade
secrets and other  unpatented  and/or  unpatentable  proprietary or confidential
information,  systems or procedures)  and other similar  rights and  proprietary
knowledge (collectively, "Intangibles") used or necessary for the conduct of its
business as now being conducted and as described in the Company's  Annual Report
on Form 10-K for its most  recently  ended fiscal year.  Neither the Company nor
any  subsidiary of the Company  infringes on or is in conflict with any right of
any other  person  with  respect  to any  Intangibles  nor is there any claim of
infringement  made by a third party  against or involving  the Company or any of
its subsidiaries, which infringement,  conflict or claim, individually or in the
aggregate,  could  reasonably be expected to result in an unfavorable  decision,
ruling or finding which would have a Material Adverse Effect.
<PAGE>

         III.17  Foreign  Corrupt  Practices.  To the Company's  knowledge,  the
Company has no notice and neither the Company, nor any of its subsidiaries,  nor
any director,  officer,  agent, employee or other person acting on behalf of the
Company or any  subsidiary  has violated or is in violation of any  provision of
the U.S.  Foreign  Corrupt  Practices Act of 1977, as amended.  To the Company's
knowledge,  the Company has no notice and  neither the  Company,  nor any of its
subsidiaries,  nor any director, officer, agent, employee or other person acting
on behalf of the  Company or any  subsidiary  has,  in the course of his actions
for, or on behalf of, the  Company,  used any  corporate  funds for any unlawful
contribution,  gift,  entertainment  or  other  unlawful  expenses  relating  to
political activity;  made any direct or indirect unlawful payment to any foreign
or domestic  government  official or employee from corporate  funds; or made any
bribe, rebate, payoff, influence payment,  kickback or other unlawful payment to
any foreign or domestic government official or employee.

         III.18 Key Employees. Each Key Employee (as defined below) is currently
serving the Company in the capacity disclosed in Schedule 3.18. No Key Employee,
to the best of the knowledge of the Company and its subsidiaries,  is, or is now
expected to be, in violation of any material  term of any  employment  contract,
confidentiality,    disclosure    or    proprietary    information    agreement,
non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each Key Employee does not subject the
Company or any of its  subsidiaries  to any liability with respect to any of the
foregoing  matters.  No Key  Employee  has, to the best of the  knowledge of the
Company and its subsidiaries, any intention to terminate his employment with, or
services to, the Company or any of its  subsidiaries.  "Key Employee" means each
of Michael R. Farris and J. Richard Crowley.

                                   ARTICLE IV
                                    COVENANTS

         IV.1 Best Efforts.  The parties shall use their best efforts  timely to
satisfy  each  of the  conditions  described  in  Articles  VI and  VII of  this
Agreement.

         IV.2 Securities  Laws. The Company agrees to file a Form D with respect
to the Securities  with the SEC as required under  Regulation D and to provide a
copy  thereof  to each  Purchaser  within  fifteen  (15) days  after the date of
Closing. The Company agrees to file a Form 8-K disclosing this Agreement and the
transactions  contemplated  hereby with the SEC within three (3)  business  days
following  the date of Closing.  The Company  shall,  on or prior to the date of
Closing,  take  such  action  as is  necessary  to sell the  Securities  to each
Purchaser under  applicable  securities laws of the states of the United States,
and shall provide  evidence of any such action so taken to each  Purchaser on or
prior to the date of the Closing.

         IV.3 Reporting Status.  So long as any Purchaser  beneficially owns any
of the  Securities,  the Company  shall  timely file all reports  required to be
filed with the SEC  pursuant to the  Exchange  Act,  and the  Company  shall not
terminate  its status as an issuer  required to file reports  under the Exchange
Act even if the  Exchange  Act or the rules  and  regulations  thereunder  would
permit such termination.
<PAGE>

         IV.4 Use of Proceeds.  The Company shall use the proceeds from the sale
of the Preferred  Stock to satisfy its payment  obligations  under the agreement
between the Company and International  Business Machines Corporation dated as of
January 1,  1997,  as amended by an  addendum  dated  March 7, 1997,  to pay the
expenses of such sale, and for working capital.

         IV.5  Restriction  on Below Market  Issuance of  Securities.  (a) For a
period of one hundred  eighty  (180) days  following  the date of  Closing,  the
Company shall not issue or agree to issue, (except (i) to Purchasers pursuant to
this  Agreement,  (ii) pursuant to any employee stock option,  stock purchase or
restricted  stock  plan of the  Company  in effect on the date  hereof up to the
aggregate  amounts  set forth on  Schedule  4.5  hereto,  (iii)  pursuant to any
existing security,  option,  warrant, scrip, call or commitment or right in each
case or  disclosed  on Schedule  3.3 hereof or (iv)  beginning  ninety (90) days
following  the date of the  Closing,  pursuant to a strategic  joint  venture or
partnership entered into by the Company, undertaken at the reasonable discretion
of the Board of Directors of the Company, the primary purpose of which is not to
raise equity  capital),  any equity  securities  of the Company (or any security
convertible  into or exercisable or  exchangeable,  directly or indirectly,  for
equity  securities of the Company) if such  securities are issued at a price (or
in the case of  securities  convertible  into or  exercisable  or  exchangeable,
directly  or  indirectly,  for  Common  Stock  such  securities  provide  for  a
conversion,  exercise  or  exchange  price)  which may be less than the  current
market  price for Common  Stock on the date of  issuance  (in the case of Common
Stock)  or the  date  of  conversion,  exercise  or  exchange  (in  the  case of
securities  convertible  into  or  exercisable  or  exchangeable,   directly  or
indirectly, for Common Stock).

         IV.6 Right of First Offer. From the date hereof until the day following
the first anniversary of the date of the Closing, the Company shall not issue or
sell,  or agree to issue or sell any equity  securities of the Company or any of
its   subsidiaries   (or  any  security   convertible  into  or  exercisable  or
exchangeable,  directly or indirectly,  for equity  securities of the Company or
any of its  subsidiaries)  ("Future  Offerings")  unless the Company  shall have
first  delivered to each  Purchaser at least ten (10) business days prior to the
closing of such Future Offering,  written notice  describing the proposed Future
Offering,  including  the terms  and  conditions  thereof,  and  providing  each
Purchaser  and its  affiliates an option during the ten (10) business day period
following  delivery of such notice to purchase the full amount of the securities
being offered in the Future  Offering on the same terms as  contemplated by such
Future Offering (the  limitations  referred to in this sentence are collectively
referred  to  as  the  "Capital  Raising  Limitations").   The  Capital  Raising
Limitations shall not apply to any transaction involving issuances of securities
in connection with a merger,  consolidation,  joint venture,  asset acquisition,
license agreement or exercise of options by employees, consultants or directors.
In addition,  the Capital  Raising  Limitations  also shall not apply to (a) the
issuance of securities  upon  exercise or  conversion of the Company's  options,

<PAGE>

warrants or other convertible  securities outstanding as of the date hereof, the
grant  of  additional  options  or  warrants,  or  the  issuance  of  additional
securities,  under any  employee or director  stock  option,  stock  purchase or
restricted stock plan of the Company or any firm commitment  underwritten public
offering.  This  Section  4.6 shall not limit the  Company's  obligations  under
Section 4.5 above. The Company shall prohibit any Common Stock or other security
issued  by the  Company  subject  to the  Capital  Raising  Limitations  but not
purchased by any Purchaser from being  converted,  exercised or resold until the
day  following the first  anniversary  of the date of the Closing and shall take
all actions necessary  (including,  without  limitation,  the issuance of a stop
transfer order) to effect such prohibition.

         IV.7  Expenses.  The  Company  shall pay to each  Purchaser,  or at its
direction,  at the Closing reimbursement for the expenses reasonably incurred by
it  and  its  affiliates  and  advisors  in  connection  with  the  negotiation,
preparation,  execution, and delivery of this Agreement and the other agreements
to be executed in  connection  herewith,  including,  without  limitation,  such
Purchaser's  and its affiliates' and advisors' due diligence and attorneys' fees
and expenses (the  "Expenses"),  which may be netted against the Purchase Price;
provided,  however, that no Purchaser's Expenses shall exceed $5,000, except for
the reasonable fees and expenses of Altheimer & Gray. In addition,  from time to
time thereafter,  upon any Purchaser's written request, the Company shall pay to
such Purchaser such additional Expenses, if any, not covered by such payment, in
each case to the  extent  reasonably  incurred  by such  Purchaser  prior to the
Closing.

         IV.8  Information.  The Company agrees to send the following reports to
each  Purchaser  until  such  Purchaser  transfers,  assigns or sells all of its
Securities:  (a) within three (3) business days after the filing with the SEC, a
copy of its Annual Report on Form 10-K, its Quarterly  Reports on Form 10-Q, any
proxy  statements  and any Current  Reports on Form 8-K;  and (b) within one (1)
business day after release,  copies of all press releases  issued by the Company
or any of its  subsidiaries.  The Company further agrees to promptly  provide to
any Holder any information with respect to the Company,  its properties,  or its
business or Holder's investment as such Holder may reasonably request; provided,
however,  that the Company shall not be required to give any Holder any material
nonpublic information. If any information requested by a Holder from the Company
contains material nonpublic information,  the Company shall inform the Holder in
writing that the information  requested contains material nonpublic  information
and shall in no event  provide such  information  to Holder  without the express
written consent of such Holder after being so informed.

         IV.9 Listing. The Company shall continue the listing and trading of its
Common  Stock on the  Nasdaq,  the New York Stock  Exchange  or  American  Stock
Exchange;  and comply in all respects with the Company's  reporting,  filing and
other obligations under the by-laws or rules of the Nasdaq or such Exchange,  as
applicable.
<PAGE>

         IV.10 Prospectus Delivery Requirement.  Each Purchaser understands that
the Securities Act may require  delivery of a prospectus  relating to the Common
Stock in connection with any sale thereof  pursuant to a registration  statement
under the  Securities  Act covering  the resale by such  Purchaser of the Common
Stock being sold, and each Purchaser shall comply with the applicable prospectus
delivery requirements of the Securities Act in connection with any such sale.

         IV.11 Corporate Existence.  So long as any Purchaser  beneficially owns
any Warrants or  Preferred  Stock,  the Company  shall  maintain  its  corporate
existence,  except  in the event of a  merger,  consolidation  or sale of all or
substantially all of the Company's assets, as long as the surviving or successor
entity in such transaction (i) assumes the Company's  obligations  hereunder and
under  the  agreements  and  instruments  entered  into in  connection  herewith
regardless of whether or not the Company  would have had a sufficient  number of
shares of Common Stock  authorized and available for issuance in order to effect
the conversion of all Preferred  Stock and exercise of all Warrants  outstanding
as of the date of such  transaction  and (ii) is a publicly  traded  corporation
whose  Common  Stock is listed for trading on the NASDAQ,  the Nasdaq  Small Cap
Market, the New York Stock Exchange or the American Stock Exchange.

         IV.12 Share  Authorization.  The Company  covenants  and agrees that it
shall (i) solicit by proxy the authorization (the "Shareholder Approval") of the
Rule 4460(i)  Authorization  by the  stockholders  of the Company as well as the
authorization  of additional  shares of Common Stock required by Section V.A. of
the  Certificate of Designation not later than 60 days following the date of the
Closing,  and (ii) use its best efforts to obtain the  Shareholder  Approval not
later than 120 days following the date of the Closing.

         IV.13 Hedging Transactions. The Company understands that some or all of
the  Purchasers  are so-called  "hedge" funds and the Company  hereby  expressly
agrees that each  Purchaser  shall not in any way be prohibited or restricted by
the Company from any purchases or sales of any securities of, or related to, the
Company,  including,  without limitation,  short sales and hedging and arbitrage
transactions.  Each Purchaser acknowledges that such purchases,  sales and other
transactions  may be subject to various  Federal and state  securities  laws and
agrees to comply with all such applicable securities laws.

                                    ARTICLE V
                   LEGEND REMOVAL, TRANSFER, AND CERTAIN SALES

         V.1  Removal of Legend.  The Legend  shall be removed  and the  Company
shall issue a certificate without such Legend to the holder of any Security upon
which it is stamped, and a certificate for a security shall be originally issued
without the Legend,  if, unless otherwise required by state securities laws, (a)
the sale of such  Security is  registered  under the  Securities  Act,  (b) such
holder provides the Company with an opinion of counsel,  in form,  substance and
scope  customary  for  opinions  of  counsel  in  comparable   transactions  and

<PAGE>

reasonably  satisfactory  to the Company and its counsel (the reasonable cost of
which  shall  be borne by the  Company  if  neither  an  effective  registration
statement  under the Securities Act or Rule 144 is available in connection  with
such sale) to the effect that a public sale or transfer of such  Security may be
made without registration under the Securities Act pursuant to an exemption from
such registration requirements or (c) such Security can be sold pursuant to Rule
144 and a registered broker dealer provides to the Company's  transfer agent and
counsel copies of (i) a "will sell" letter satisfying the guidelines established
by the SEC and its  staff  from  time to  time  and  (ii) a  customary  seller's
representation  letter with  respect to such a sale to be made  pursuant to Rule
144 and (iii) a Form 144 in respect of such Security executed by such holder and
filed (or  mailed  for  filing)  with the SEC or (d) such  Security  can be sold
pursuant to Rule 144(k). Each Purchaser agrees to sell all Securities, including
those represented by a certificate(s) from which the Legend has been removed, or
which were  originally  issued  without  the Legend,  pursuant  to an  effective
registration  statement, in accordance with the manner of distribution described
in such  registration  statement and to deliver a prospectus in connection  with
such sale or in compliance with an exemption from the registration  requirements
of the  Securities  Act. In the event the Legend is removed from any Security or
any Security is issued  without the Legend and the Security is to be disposed of
other than pursuant to the registration  statement or pursuant to Rule 144, then
prior to,  and as a  condition  to,  such  disposition  such  Security  shall be
relegended  as  provided  herein  in  connection  with  any  disposition  if the
subsequent  transfer thereof would be restricted under the Securities Act. Also,
in the event the Legend is removed  from any  Security or any Security is issued
without the Legend and thereafter the effectiveness of a registration  statement
covering the resale of such Security is suspended or the Company determines that
a supplement  or amendment  thereto is required by applicable  securities  laws,
then upon  reasonable  advance notice to Purchaser  holding such  Security,  the
Company may require that the Legend be placed on any such  Security  that cannot
then be sold pursuant to an effective registration statement or Rule 144 or with
respect to which the  opinion  referred to in clause (b) next above has not been
rendered,  which Legend shall be removed when such Security may be sold pursuant
to an effective  registration  statement or Rule 144 or such holder provides the
opinion with respect thereto described in clause (b) next above.

         V.2  Transfer  Agent  Instructions.  The  Company  shall  instruct  its
transfer agent to issue  certificates,  registered in the name of each Purchaser
or its nominee,  for the  Conversion  Shares and Warrant  Shares in such amounts
determined in accordance  with the terms of the Preferred Stock or the Warrants,
as  applicable.  Such  certificates  shall  bear the  Legend  only to the extent
provided by Section 5.1 above or as in the opinion of the Company's  counsel may
be  required  by a change in any  applicable  statute or rule or  administrative
interpretation  thereof after the date of this Agreement.  The Company covenants
that,  except as in the opinion of Company's counsel may be required by a change
in any applicable statute or rule or administrative interpretation thereof after
the date of this Agreement, no instruction other than such instructions referred
to in this Article V, and stop transfer  instructions  to give effect to Section
2.6 hereof in the case of the  Conversion  Shares and  Warrant  Shares  prior to

<PAGE>

registration  of the  Conversion  Shares and Warrant Shares under the Securities
Act, will be given by the Company to its transfer  agent and that the Securities
shall otherwise be freely  transferable on the books and records of the Company.
Nothing in this Section shall affect in any way each Purchaser's obligations and
agreement set forth in Section 5.1 hereof to resell the  Securities  pursuant to
an effective  registration  statement  and to deliver a prospectus in connection
with  such  sale  or in  compliance  with an  exemption  from  the  registration
requirements  of applicable  securities  laws.  If (a) a Purchaser  provides the
Company with an opinion of counsel,  which  opinion of counsel shall be in form,
substance and scope customary for opinions of counsel in comparable transactions
and reasonably  satisfactory to the Company and its counsel (the reasonable cost
of which  shall be borne by the  Company if neither  an  effective  registration
statement  under the Securities Act or Rule 144 is available in connection  with
such sale),  to the effect that the Securities to be sold or transferred  may be
sold  or  transferred  pursuant  to an  exemption  from  registration  or  (b) a
Purchaser  transfers  Securities to an affiliate which is an accredited investor
(within the meaning of Regulation D under the Securities Act) and which delivers
to the  Company  in  written  form  the  same  representations,  warranties  and
covenants made by Purchaser hereunder or pursuant to Rule 144, the Company shall
permit the  transfer,  and,  in the case of the  Conversion  Shares and  Warrant
Shares,  promptly  instruct its transfer agent to issue one or more certificates
in such  name and in such  denomination  as  specified  by such  Purchaser.  The
Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable  harm to a  Purchaser  by  vitiating  the intent and  purpose of the
transaction contemplated hereby. Accordingly,  the Company acknowledges that the
remedy  at law for a breach  of its  obligations  under  this  Article V will be
inadequate  and  agrees,  in the event of a breach or  threatened  breach by the
Company of the provisions of this Article V, that a Purchaser shall be entitled,
in addition to all other available  remedies,  to an injunction  restraining any
breach and requiring  immediate issuance and transfer,  without the necessity of
showing economic loss and without any bond or other security being required.

                                   ARTICLE VI
                 CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL

         VI.1 Conditions to the Company's  Obligation to Sell. The obligation of
the  Company  hereunder  to  issue  and  sell the  Convertible  Securities  to a
Purchaser at the Closing is subject to the  satisfaction,  as of the date of the
Closing and with respect to such Purchaser,  of each of the following conditions
thereto,  provided that these  conditions are for the Company's sole benefit and
may be waived by the Company at any time in its sole discretion:

                  (i) Such  Purchaser  shall have executed the signature page to
         this  Agreement,  the  Registration  Rights  Agreement  and the  Escrow
         Agreement and delivered the same to the Company.
<PAGE>

                  (ii) Such  Purchaser  shall have  wired to the  account of the
         Escrow Agent pursuant to the Escrow  Agreement the applicable  Purchase
         Price for the Convertible Securities purchased at the Closing.

                  (iii) The Purchase  Price  delivered by all Purchasers for the
         aggregate  amount of  Convertible  Securities  purchased at the Closing
         shall equal at least $16,000,000.

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

                  (v) No statute,  rule,  regulation,  executive order,  decree,
         ruling or injunction shall have been enacted,  entered,  promulgated or
         endorsed  by  any  court  or   governmental   authority   of  competent
         jurisdiction or any self-regulatory  organization having authority over
         the matters  contemplated  hereby  which  restricts  or  prohibits  the
         consummation of any of the transactions contemplated by this Agreement.

                  (vi) All  Purchasers  shall  have  executed  an  Intercreditor
         Agreement between such Purchasers and Foothill Capital Corporation.

                                   ARTICLE VII
              CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE

         VII.1 The  obligation  of each  Purchaser  hereunder  to  purchase  the
Convertible  Securities  to be  purchased  by it on the date of the  Closing  is
subject to the satisfaction of each of the following  conditions,  provided that
these conditions are for each Purchaser's sole benefit and may be waived by such
Purchaser at any time in such Purchaser's sole discretion:

                  (i) The Company shall have executed the signature page to this
         Agreement,  the Registration  Rights Agreement and the Escrow Agreement
         and delivered the same to Purchaser.

                  (ii) The Company shall have delivered to the Escrow Agent duly
         executed certificates for the Preferred Stock (in such denominations as
         Purchaser  shall  request) being so purchased by Purchaser and Warrants
         being issued to such Purchaser at the Closing.
<PAGE>

                  (iii) The  Common  Stock  shall be listed  on the  Nasdaq  and
         trading in the Common Stock shall not have been suspended by the Nasdaq
         or the SEC or other regulatory authority.

                  (iv) The  representations  and warranties of the Company shall
         be true and  correct as of the date when made and as of the  Closing as
         though  made at  that  time  and  the  Company  shall  have  performed,
         satisfied  and complied in all material  respects  with the  covenants,
         agreements and  conditions  required by this Agreement to be performed,
         satisfied  or complied  with by the Company at or prior to the Closing.
         Purchaser  shall have  received a  certificate,  executed  by the Chief
         Executive Officer or Chief Financial  Officer of the Company,  dated as
         of the Closing to the foregoing effect.

                  (v) No statute,  rule,  regulation,  executive order,  decree,
         ruling or injunction shall have been enacted,  entered,  promulgated or
         endorsed  by  any  court  or   governmental   authority   of  competent
         jurisdiction or any self-regulatory  organization having authority over
         the matters contemplated hereby which prohibits the consummation of any
         of the transactions contemplated by this Agreement.

                  (vi) Purchaser  shall have received the officer's  certificate
         described in Section 3.3, dated as of the Closing.

                  (vii) Purchaser  shall have received  opinions of Sonnenschein
         Nath & Rosenthal,  dated as of the Closing, in the form attached hereto
         as Exhibit F.

                  (viii) The Company  shall have entered into an agreement  with
         Michael R. Farris restricting dispositions of Common Stock beneficially
         owned by him and in the form attached hereto as Exhibit G.

                  (ix) The Company  shall have  received from each of Michael R.
         Farris and Gregory L. Wilson an irrevocable  proxy in the form attached
         hereto as Exhibit H.

                  (x) The Company shall have entered into the Security Agreement
         between  the  Company  and  Purchaser  in the form  attached  hereto as
         Exhibit I, to effect the  security  interest  of  Purchaser  in the IBM
         Patents.

                  (xi) The  Certificate of Designation  shall have been accepted
         for filing with the  Secretary  of State of the State of  Delaware  and
         reasonable  evidence  thereof shall have been delivered to Purchaser or
         Altheimer & Gray.
<PAGE>

                  (xii) The Purchase  Price  delivered by all Purchasers for the
         aggregate  amount of  Convertible  Securities  purchased at the Closing
         shall equal at least $16,000,000.

                  (xiii)  Each of the other  Purchasers  shall have  executed an
         Intercreditor  Agreement  between the Purchasers  and Foothill  Capital
         Corporation.

                  (xiv) The Company  shall have  delivered  evidence  reasonably
         satisfactory to Purchaser that the purchase of the IBM Patents is shall
         be  consummated  upon the  payment  of the  purchase  price  under  the
         agreement with IBM.

                                  ARTICLE VIII
                          GOVERNING LAW; MISCELLANEOUS

         VIII.1 Governing Law; Jurisdiction. This Agreement shall be governed by
and  construed in  accordance  with the  Delaware  General  Corporation  Law (in
respect of matters of corporation law) and the laws of the State of New York (in
respect of all other  matters)  applicable to contracts made and to be performed
in the  State  of New  York.  The  parties  hereto  irrevocably  consent  to the
jurisdiction of the United States federal courts and state courts located in the
County of New Castle in the State of Delaware or the Borough of Manhattan in the
State of New York in any suit or  proceeding  based  on or  arising  under  this
Agreement or the transactions contemplated hereby and irrevocably agree that all
claims in respect of such suit or  proceeding  may be determined in such courts.
The Company and each Purchaser irrevocably waives the defense of an inconvenient
forum to the  maintenance  of such  suit or  proceeding.  The  Company  and each
Purchaser  further  agrees  that  service  of process  upon the  Company or such
Purchaser,  as  applicable,  mailed by the first  class  mail shall be deemed in
every  respect  effective  service  of process  upon the  Company in any suit or
proceeding arising  hereunder.  Nothing herein shall affect Purchaser's right to
serve  process in any other manner  permitted  by law. The parties  hereto agree
that a final  non-appealable  judgment in any such suit or  proceeding  shall be
conclusive and may be enforced in other  jurisdictions  by suit on such judgment
or in any other lawful manner.

         VIII.2  Counterparts.  This  Agreement  may be  executed in two or more
counterparts,  including, without limitation, by facsimile transmission,  all of
which  counterparts  shall be  considered  one and the same  agreement and shall
become effective when  counterparts have been signed by each party and delivered
to the other party.  In the event any  signature  page is delivered by facsimile
transmission,  the party  using such means of delivery  shall  cause  additional
original executed signature pages to be delivered to the other parties.

         VIII.3 Headings.  The headings of this Agreement are for convenience of
reference  and shall not form part of, or affect  the  interpretation  of,  this
Agreement.
<PAGE>

         VIII.4  Severability.  If any  provision  of this  Agreement  shall  be
invalid   or   unenforceable   in   any   jurisdiction,   such   invalidity   or
unenforceability  shall  not  affect  the  validity  or  enforceability  of  the
remainder of this Agreement or the validity or  enforceability of this Agreement
in any other jurisdiction.

         VIII.5 Entire Agreement; Amendments. This Agreement and the instruments
referenced  herein contain the entire  understanding of the parties with respect
to the maters covered herein and therein and, except as  specifically  set forth
herein  or  therein,   neither  the   Company  nor  any   Purchaser   makes  any
representation,  warranty, covenant or undertaking with respect to such matters.
No provision of this  Agreement  may be waived  other than by an  instrument  in
writing signed by the party to be charged with  enforcement  and no provision of
this  Agreement may be amended other than by an instrument in writing  signed by
the Company and each Purchaser.

         VIII.6  Notice.  Any notice  herein  required or  permitted to be given
shall  be  in  writing   and  may  be   personally   served  or   delivered   by
nationally-recognized   overnight  courier  or  by  facsimile-machine  confirmed
telecopy,  and shall be deemed  delivered at the time and date of receipt (which
shall include  telephone  line facsimile  transmission).  The addresses for such
communications shall be:

                           If to the Company:

                           LaserSight Incorporated
                           12161 Lackland Road
                           St. Louis, Missouri 63146
                           Telecopy: (314) 576-1073
                           Attention: Chief Financial Officer

                           with a copy to:

                           Sonnenschein Nath & Rosenthal
                           One Metropolitan Square
                           Suite 3000
                           St. Louis, Missouri 63102
                           Telecopy: (314) 259-5959
                           Attention: Alan B. Bornstein
<PAGE>

                           If to CC Investments, LDC:

                           CC Investments, LDC
                           Corporate Centre, West Bay Road
                           P.O. Box 31106 SMB
                           Grand Cayman, Cayman Islands

                           with a copy to:

                           Castle Creek Partners, LLC
                           333 West Wacker Drive
                           Suite 1410
                           Chicago, IL  60606
                           Telecopy:  (312) 435-2636
                           Attention:  John D. Ziegelman

                           and with a copy to:

                           Altheimer & Gray
                           10 South Wacker Drive
                           Suite 4000
                           Chicago, IL  60606
                           Telecopy:  (312) 715-4800
                           Attention: Kenneth M. Crane

                           If to Societe Generale:

                           Societe Generale
                           c/o Societe Generale Securities Corp.
                           1221 Avenue of the Americas
                           6th Floor
                           New York, NY 10020
                           Telecopy: (212) 278-5467
                           Attention: Guillaume Pollet
<PAGE>

                           with a copy to:

                           Dorsey & Whitney LLP
                           250 Park Avenue
                           New York, NY 10177
                           Telecopy: (212) 953-7201
                           Attention: Eric Maki

                           If to Sheperd Investments International, Ltd.:

                           Shepherd Investments International, Ltd.
                           c/o Staro Asset Management, LLC
                           1500 West Market Street
                           Mequon, WI 53092
                           Telecopy: (414) 241-7704
                           Attention: Brian Davidson

                           with a copy to:

                           Schulte Roth & Zabel LLP
                           900 3rd Avenue
                           New York, NY 10022
                           Telecopy: (212) 593-5955
                           Attention: Ele Klein

                           If to Stark International:

                           Stark International
                           c/o Staro Asset Management, LLC
                           1500 West Market Street
                           Mequon, WI 53092
                           Telecopy: (414) 241-7704
                           Attention: Brian Davidson
<PAGE>

                           with a copy to:

                           Schulte Roth & Zabel LLP
                           900 3rd Avenue
                           New York, NY 10022
                           Telecopy: (212) 593-5955
                           Attention: Ele Klein

If to any other Purchaser, to such address set forth under such Purchaser's name
on the  signature  page  hereto  executed  by such  Purchaser.  Each party shall
provide notice to the other parties of any change in address.

         VIII.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their  successors  and assigns.  Neither
the Company nor any  Purchaser  shall  assign  this  Agreement  or any rights or
obligations   hereunder   without  the  prior  written  consent  of  the  other.
Notwithstanding  the  foregoing,  each  Purchaser  may  assign  its  rights  and
obligations  hereunder to any of its "affiliates," as that term is defined under
the Securities Act, without the consent of the Company so long as such affiliate
is an  accredited  investor  (within  the  meaning  of  Regulation  D under  the
Securities  Act) and  agrees  in  writing  to be bound by this  Agreement.  This
provision  shall not limit each  Purchaser's  right to transfer  the  Securities
pursuant to the terms of this  Agreement  or to assign such  Purchaser's  rights
hereunder to any such transferee.

         VIII.8 Third Party  Beneficiaries.  This  Agreement is intended for the
benefit of the parties  hereto and their  respective  permitted  successors  and
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other person.

         VIII.9 Survival.  The representations and warranties of the Company and
the  agreements  and  covenants  set forth in Articles III, IV, V and VIII shall
survive the closing hereunder  notwithstanding  any due diligence  investigation
conducted by or on behalf of Purchaser. The Company agrees to indemnify and hold
harmless  each  Purchaser  and  each of each  Purchaser's  officers,  directors,
employees,  partners,  agents  and  affiliates  for loss or damage  arising as a
result of or related to any  breach or alleged  breach by the  Company of any of
its  representations  or covenants set forth herein,  including  advancement  of
expenses  as they  are  incurred.  The  representations  and  warranties  of the
Purchasers  pursuant to Article II of this  Agreement  shall survive the Closing
hereunder and each Purchaser  shall  indemnify and hold harmless the Company and
each of its officers, directors,  employees, partners, agents and affiliates for
any  loss or  damage  arising  as a result  of the  breach  of such  Purchaser's
representations and warranties as set forth in Article II.
<PAGE>

         VIII.10 Public  Filings;  Publicity.  As soon as practicable  following
Closing,   the  Company  shall  issue  a  press  release  with  respect  to  the
transactions  contemplated hereby. The Company and each Purchaser shall have the
right to approve before issuance any press releases, SEC or NYSE filings, or any
other public  statements with respect to the  transactions  contemplated  hereby
(which  approval  shall not be  unreasonably  withheld  or  delayed);  provided,
however,  that the Company shall be entitled,  without the prior approval of any
Purchaser,  to make any press release or SEC,  NASDAQ,  NASD or exchange filings
with  respect  to  such  transactions  as is  required  by  applicable  law  and
regulations  (although the Company shall make all reasonable  efforts to consult
with each  Purchaser  in  connection  with any such press  release  prior to its
release and shall provide each Purchaser with a copy thereof).

         VIII.11 Further  Assurances.  Each party shall do and perform, or cause
to be done and  performed,  all such further acts and things,  and shall execute
and deliver all such other agreements, certificates,  instruments and documents,
as the other party may  reasonably  request in order to carry out the intent and
accomplish  the  purposes  of  this  Agreement  and  the   consummation  of  the
transactions contemplated hereby.

         VIII.12  Remedies.  No provision of this  Agreement  providing  for any
remedy to a Purchaser  shall limit any remedy which would otherwise be available
to such Purchaser at law or in equity. Nothing in this Agreement shall limit any
rights a Purchaser may have with any applicable federal or state securities laws
with respect to the investment contemplated hereby.

         VIII.13  Termination.  In the  event  that the  Closing  shall not have
occurred on or before August 29, 1997, unless the parties agree otherwise,  this
Agreement shall terminate at the close of business on such date.

                                      * * *

<PAGE>

         IN WITNESS  WHEREOF,  the  undersigned  Purchasers and the Company have
caused this Agreement to be duly executed as of the date first above written.

PURCHASER:  Stark International


Purchaser  elects to have 9.9%  limitation  applied to its holdings of shares of
Common Stock: [X]



AGGREGATE NUMBER OF PREFERRED SHARES: 400
                                     -----

By: /s/ Michael A. Roth
   ----------------------------
     Its:
         ----------------------
LASERSIGHT INCORPORATED:



By: /s/ Michael R. Farris
   ----------------------------
    Michael R. Farris
    President and Chief Executive Officer

<PAGE>


         IN WITNESS  WHEREOF,  the  undersigned  Purchasers and the Company have
caused this Agreement to be duly executed as of the date first above written.

PURCHASER:  Shepherd Investments International, Ltd.


Purchaser  elects to have 9.9%  limitation  applied to its holdings of shares of
Common Stock: [X]



AGGREGATE NUMBER OF PREFERRED SHARES: 400
                                     -----

By: /s/ Michael A. Roth
   ----------------------------
     Its:
         ----------------------
LASERSIGHT INCORPORATED:



By: /s/ Michael R. Farris
   ----------------------------
    Michael R. Farris
    President and Chief Executive Officer

<PAGE>


         IN WITNESS  WHEREOF,  the  undersigned  Purchasers and the Company have
caused this Agreement to be duly executed as of the date first above written.

PURCHASER:  Societe Generale


Purchaser  elects to have 9.9%  limitation  applied to its holdings of shares of
Common Stock: [X]



AGGREGATE NUMBER OF PREFERRED SHARES: 300
                                     -----

By: /s/ Giullaume Pollet
   ----------------------------
     Its: First Vice President
         ----------------------
LASERSIGHT INCORPORATED:



By: /s/ Michael R. Farris
   ----------------------------
    Michael R. Farris
    President and Chief Executive Officer

<PAGE>


         IN WITNESS  WHEREOF,  the  undersigned  Purchasers and the Company have
caused this Agreement to be duly executed as of the date first above written.

PURCHASER:  CC Investments, LDC


Purchaser  elects to have 9.9%  limitation  applied to its holdings of shares of
Common Stock: [X]



AGGREGATE NUMBER OF PREFERRED SHARES: 500
                                     -----

By: /s/ John Ziegelman
   ----------------------------
     Its:  Director
         ----------------------
LASERSIGHT INCORPORATED:



By: /s/ Michael R. Farris
   ----------------------------
    Michael R. Farris
    President and Chief Executive Officer