Document:

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                                                                  Exhibit 10(47)

                  COMMON STOCK AND WARRANTS PURCHASE AGREEMENT

                           Dated as of March 31, 2000

                                      among

                            VIRTUAL COMMUNITIES, INC.

                                       and

                       THE PURCHASERS LISTED ON EXHIBIT A
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                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I Purchase and Sale of Stock                                        225
ARTICLE II Representations and Warranties                                   226
   Section 2.1    Representations and Warranties of the Company             226
      Section 2.2   Representations and Warranties of the Purchasers
ARTICLE III Covenants                                                       243
   Section 3.1    Securities Compliance.                                    243
   Section 3.2    Registration and Listing                                  244
   Section 3.3    Inspection Rights                                         244
   Section 3.4    Compliance with Laws                                      244
   Section 3.5    Keeping of Records and Books of Account                   245
   Section 3.6    Reporting Requirements                                    245
   Section 3.7    Amendments                                                245
   Section 3.8    Other Agreements                                          245
   Section 3.9    Distributions                                             245
   Section 3.10   Intentionally Omitted.                                    245
   Section 3.11   Intentionally Omitted.                                    245
   Section 3.12   Intentionally Omitted.                                    246
   Section 3.13   Subsequent Financing                                      246
   Section 3.14   Reservation of Shares                                     246
   Section 3.15   Transfer Agent Instructions                               246
ARTICLE IV Conditions                                                       247
      Section 4.1 Conditions Precedent to the Obligation of the Company
      to Sell the Shares at Closing                                         247
      Section 4.2 Conditions Precedent to the Obligation of the Purchasers
      to Purchase the Shares at the Closing                                 248
ARTICLE V Registration Rights                                               251
ARTICLE VI Stock Certificate Legend                                         251
   Section 6.1    Legend                                                    251
ARTICLE VII Termination                                                     252
   Section 7.1    Termination by Mutual Consent                             252
   Section 7.2    Other Termination                                         252
   Section 7.3    Termination of Closing                                    252
   Section 7.4    Effect of Termination                                     252
ARTICLE VIII Indemnification                                                253
   Section 8.1    General Indemnity                                         253
   Section 8.2    Indemnification Procedure                                 253
ARTICLE IX Miscellaneous                                                    254
   Section 9.1    Fees and Expenses                                         254
   Section 9.2    Specific Enforcement, Consent to Jurisdiction.            254
   Section 9.3    Entire Agreement; Amendment                               255
   Section 9.4    Notices                                                   256
   Section 9.5    Waivers                                                   257
   Section 9.6    Headings                                                  257
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   Section 9.7    Successors and Assigns                                    257
   Section 9.8    No Third Party Beneficiaries                              257
   Section 9.9    Governing Law                                             257
   Section 9.10   Survival                                                  257
   Section 9.11   Counterparts                                              257
   Section 9.12   Publicity                                                 257
   Section 9.13   Severability                                              257
   Section 9.14   Further Assurances                                        258
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                  COMMON STOCK AND WARRANTS PURCHASE AGREEMENT

      This COMMON STOCK AND WARRANTS PURCHASE AGREEMENT (the "Agreement") is
dated as of March 31, 2000, by and among Virtual Communities, Inc., a
corporation organized under the laws of the State of Delaware (the "Company")
(NASDAQ: "VCIX"), and each of the Purchasers whose names are set forth on
Exhibit A hereto (individually, a "Purchaser" and collectively, the
"Purchasers").

      WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Purchasers
and the Purchasers shall purchase up to $3,000,000 of the Company's common
stock, .$01 par value per share (the "Common Stock"), and warrants to purchase
shares of Common Stock (singularly a "Warrant" and collectively, the
"Warrants"), in substantially the form attached hereto as Exhibit B; and;

      WHEREAS, such purchase and sale will be made in reliance upon the
provisions of Section 4(2) and Rule 901 of Regulation S ("Regulation S") of the
United States Securities Act of 1933 as amended, and regulations promulgated
thereunder (the "Securities Act"), or upon such other exemption from the
registration requirements of the Securities Act as may be available with respect
to any or all of the purchases of Common Stock and Warrants to be made
hereunder.

      The parties hereto agree as follows:

      Purchase and Sale of Stock

      QQQQ. Purchase and Sale of Common Shares. Upon the following terms and
            subject to the conditions contained herein, the Company shall issue
            and sell to the Purchasers and each of the Purchasers, severally and
            not jointly shall purchase from the Company 517,800 shares of Common
            Stock (the "Common Shares"), at a price per share equal to $5.79375.
            The aggregate price of the Common Shares shall be $3,000,000.

      RRRR. The Shares. The Company has authorized and has reserved and
            covenants to continue to reserve, free of preemptive rights and
            other similar contractual rights of stockholders, a sufficient
            number of its authorized but unissued shares of its Common Stock, to
            effect the issuance of the Common Shares and exercise of the
            Warrants. Any shares of Common Stock issuable upon exercise of the
            Warrants (and such shares when issued) are herein referred to as the
            "Warrant Shares". The Common Shares and the Warrant Shares are
            sometimes collectively referred to as the "Shares".

      SSSS. Purchase Prices, Execution and Closing. In consideration of and in
            express reliance upon the representations, warranties, covenants,
            terms and conditions of this Agreement, the Company agrees to issue
            and sell to the Purchasers and the Purchasers, severally but not
            jointly, agree to purchase the Common Shares
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      and Warrants exercisable for that number of Warrant Shares set forth
      opposite their respective names on Exhibit A. The aggregate purchase price
      of the Common Shares and the Warrants being acquired by each Purchaser is
      set forth opposite such Purchaser's name on Exhibit A (for each such
      Purchasers, a "Purchase Price", and collectively referred to as the
      "Purchase Prices"). The closing of the purchase and sale of the Common
      Shares and Warrants (the "Closing") to be acquired by the Purchasers from
      the Company shall take place at the offices of Parker Chapin LLP, The
      Chrysler Building, 405 Lexington Avenue, New York, New York 10174 at 10:00
      a.m. E.S.T. on (i) the date on which the last to be fulfilled or waived of
      the conditions set forth in Article IV hereof and applicable to the
      Closing shall be fulfilled or waived in accordance herewith or (ii) such
      other time and place or on such date as the Purchasers and the Company may
      agree upon (the " Closing Date").

Escrow. On or before the Closing Date, (a) the Company shall execute and deliver
     to the escrow agent (the "Escrow Agent") identified in the Escrow Agreement
     attached hereto as Exhibit C (the "Escrow Agreement") all applicable
     agreements, documents, instruments and writings required pursuant to
     Section 4.2 herein (collectively, the "Closing Documents"), to be delivered
     by the Company including, without limitation, certificates for the number
     of Common Shares set forth opposite each Purchaser's name on Exhibit A, as
     applicable, registered in such Purchaser's name and such Purchaser's
     Warrants and (b) each of the Purchasers shall pay by wire transfer of
     immediately available funds into escrow in accordance with the Escrow
     Agreement such Purchaser's Purchase Price, as applicable, and execute and
     deliver all applicable agreements, documents, instruments and writings
     required pursuant to Section 4.1, to be delivered by such Purchaser. In
     regard to the Closing, the Escrow Agent shall give notice (by telephone or
     other means) (an "Escrow Agent Notice") to the parties hereto when the
     Escrow Agent has received all of the Closing Documents and wire transfer
     the funds constituting the Purchase Prices and deliver the other Closing
     Documents to the Company pursuant to the terms of the Escrow Agreement. As
     soon thereafter as is practicable on the Closing Date, the Escrow Agent
     shall deliver the Company's Closing Documents to the Purchasers, including
     applicable certificates for the Common Shares and the Warrants.

      TTTT. Warrants. The Warrants shall be divided into separate Warrants and
            shall be designated "A" Warrant and "B" Warrant. The initial
            aggregate number of shares of Common Stock issuable upon exercise of
            the A Warrants and B Warrants shall be equal to 129,450 and 500,000,
            respectively. Each of the A Warrants shall be exercisable for three
            (3) years from the Closing Date and each of the B Warrants shall be
            exercisable until four (4) months from the Effectiveness Date (as
            defined in Section 3.2 hereof).

      Representations and Warranties

      UUUU. Representations and Warranties of the Company. In order to induce
            the Purchasers to enter into this Agreement and to purchase the
            Shares, the Company hereby, makes the following representations and
            warranties to the Purchasers,
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            except as set forth in the Company's disclosure schedule delivered
            with this Agreement:

            1.    Organization, Good Standing and Power. The Company is a
                  corporation duly incorporated, validly existing and in good
                  standing under the laws of the State of Delaware and has the
                  requisite corporate power to own, lease and operate its
                  properties and assets and to conduct its business as it is now
                  being conducted and to enter into this Agreement and to
                  perform its obligations hereunder. The Company does not have
                  any subsidiaries or own securities of any kind in any other
                  entity, except as set forth in Schedule 2.1(g) hereto. The
                  Company and each subsidiary is duly qualified as a foreign
                  corporation to do business and is in good standing in every
                  jurisdiction in which the nature of the business conducted or
                  property owned by it makes such qualification necessary except
                  for any jurisdiction(s) (alone or in the aggregate) in which
                  the failure to be so qualified will not have a Material
                  Adverse Effect (as defined hereinafter) on the Company's
                  financial condition. For the purposes of this Agreement,
                  "Material Adverse Effect" means any adverse effect on the
                  business, operations, properties, prospects, assets or
                  financial condition of the Company or its subsidiaries and
                  which is material to such entity or other entities controlling
                  or controlled by such entity or which is likely to materially
                  hinder the performance by the Company of its obligation
                  hereunder and under the other Transaction Documents (as
                  defined in Section 2.1(b) hereof).

            2.    Authorization; Enforcement. The Company has the requisite
                  corporate power and authority to enter into and perform this
                  Agreement, the Escrow Agreement, the Registration Rights
                  Agreement attached hereto as Exhibit D (the "Registration
                  Rights Agreement"), the Transfer Agent Instructions (as
                  defined in Section 3.14 hereof) and the Warrants
                  (collectively, the "Transaction Documents") and to issue and
                  sell the Shares in accordance with the terms hereof and the
                  Warrants. The execution, delivery and performance of the
                  Transaction Documents by the Company and the consummation by
                  it of the transactions contemplated hereby and thereby have
                  been duly and validly authorized by all necessary corporate
                  action, and no further consent or authorization of the Company
                  or its Board of Directors or stockholders is required. This
                  Agreement has been duly executed and delivered by the Company.
                  The Registration Rights Agreement will have been duly executed
                  and delivered by the Company on or before the Closing Date.
                  Each of the Transaction Documents constitutes, or shall
                  constitute when executed and delivered, a valid and binding
                  obligation of the Company enforceable against the Company in
                  accordance with its terms, except as such enforceability may
                  be limited by applicable bankruptcy,
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                  insolvency, reorganization, moratorium, liquidation,
                  conservatorship, receivership or similar laws relating to, or
                  affecting generally the enforcement of, creditor's rights and
                  remedies or by other equitable principles of general
                  application.

            3.    Capitalization. The authorized capital stock of the Company
                  and the shares thereof currently issued and outstanding as of
                  March 31, 2000 are set forth on Schedule 2.1(c) hereto. All of
                  the outstanding shares of the Company's Common Stock and any
                  other security of the Company have been duly and validly
                  authorized. Except as set forth in this Agreement and the
                  Registration Rights Agreement and as set forth on Schedule
                  2.1(c) hereto, no shares of Common Stock or any other
                  securities issued by the Company are entitled to preemptive
                  rights or registration rights and there are no outstanding
                  options, warrants, scrip, rights to subscribe to, call or
                  commitments of any character whatsoever relating to, or
                  securities or rights convertible into, any shares of capital
                  stock of the Company. Furthermore, except as set forth in this
                  Agreement and the Registration Rights Agreement and as set
                  forth on Schedule 2.1(c), there are no contracts, commitments,
                  understandings, or arrangements by which the Company is or may
                  become bound to issue additional shares of the capital stock
                  of the Company or options, securities or rights convertible
                  into shares of capital stock of the Company. Except for
                  customary transfer restrictions contained in agreements
                  entered into by the Company in order to sell restricted
                  securities or as provided on Schedule 2.1 (c) hereto, the
                  Company is not a party to or bound by any agreement or
                  understanding granting registration or anti-dilution rights to
                  any person with respect to any of its equity or debt
                  securities. The Company is not a party to, and it has no
                  knowledge of, any agreement or understanding restricting the
                  voting or transfer of any shares of the capital stock of the
                  Company. Except as set forth on Schedule 2.1(c) hereto, the
                  offer and sale of all capital stock, convertible securities,
                  rights, warrants, or options of the Company issued prior to
                  the Closing complied with all applicable federal and state
                  securities laws, and no holder of such securities has a right
                  of rescission or claim for damages with respect thereto which
                  could have a Material Adverse Effect. The Company has
                  furnished or made available to the Purchasers true and correct
                  copies of the Company's Articles of Incorporation as in effect
                  on the date hereof (the "Articles"), and the Company's Bylaws
                  as in effect on the date hereof (the "Bylaws").

            4.    Issuance of Shares. The Common Shares to be issued at the
                  Closing have been duly authorized by all necessary corporate
                  action and, when paid for or issued in accordance with the
                  terms hereof, the Common Shares shall be validly issued and
                  outstanding, fully paid
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                  and nonassessable and entitled to all applicable rights and
                  preferences set forth in the Articles. When the Warrant Shares
                  are issued in accordance with the terms of this Agreement and
                  as set forth in the Warrants, such shares will be duly
                  authorized by all necessary corporate action and validly
                  issued and outstanding, fully paid and non-assessable, and the
                  holders shall be entitled to all rights accorded to a holder
                  of Common Stock.

            5.    No Conflicts. The execution, delivery and performance of the
                  Transaction Documents by the Company and the consummation by
                  the Company of the transactions contemplated herein and
                  therein do not and will not (i) violate any provision of the
                  Company's Articles or Bylaws, (ii) 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, mortgage, deed of trust,
                  indenture, note, bond, license, lease agreement, instrument or
                  obligation to which the Company is a party or by which any of
                  its respective properties or assets are bound, (iii) create or
                  impose a lien, mortgage, security interest, charge or
                  encumbrance of any nature whatsoever on any property of the
                  Company under any agreement or any commitment to which the
                  Company is a party or by which the Company is bound or by
                  which any of its respective properties or assets are bound, or
                  (iv) result in a violation of any federal, state, local or
                  foreign statute, rule, regulation, order, judgment or decree
                  (including 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 are bound or affected, except, in all cases other
                  than violations pursuant to clause (i) above, for such
                  conflicts, defaults, terminations, amendments, acceleration,
                  cancellations and violations as would not, individually or in
                  the aggregate, have a Material Adverse Effect. The business of
                  the Company and its subsidiaries is not being conducted in
                  violation of any laws, ordinances or regulations of any
                  governmental entity, except for possible violations which
                  singularly or in the aggregate do not and will not have a
                  Material Adverse Effect. The Company is not required under
                  federal, state or local law, rule or regulation to obtain any
                  consent, authorization or order of, or make any filing or
                  registration with, any court or governmental agency in order
                  for it to execute, deliver or perform any of its obligations
                  under the Transaction Documents, or issue and sell the Common
                  Shares and the Warrant Shares in accordance with the terms
                  hereof or thereof (other than any filings which may be
                  required to be made by the Company with the Commission or
                  state securities administrators subsequent to a Closing, and
                  any registration statement which may be filed pursuant
                  hereto); provided that, for purposes of the representation
                  made in this
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                  sentence, the Company is assuming and relying upon the
                  accuracy of the relevant representations and agreements of the
                  Purchasers herein.

            6.    Commission Documents, Financial Statements. The Company has
                  provided to the Purchasers prior to the date hereof copies of
                  its annual report on Form 10-KSB for the fiscal year ended
                  December 31, 1998, its quarterly reports for the fiscal
                  quarters ended March 31, 1999, June 30, 1999, September 30,
                  1999 and its Form SB-2, as amended (the "Form SB-2), filed
                  January 14, 2000 (all such documents are collectively referred
                  to herein as the "SEC Documents"). The Company has not
                  provided to the Purchasers any material non-public information
                  or other information which, according to applicable law, rule
                  or regulation, should have been disclosed publicly by the
                  Company but which has not been so disclosed, other than with
                  respect to the transactions contemplated by this Agreement.
                  The financial statements of the Company furnished to the
                  Purchasers comply as to form in all material respects with
                  applicable accounting requirements and the published rules and
                  regulations of the Commission or other applicable rules and
                  regulations with respect thereto. Such financial statements
                  have been prepared in accordance with generally accepted
                  accounting principles ("GAAP") applied on a consistent basis
                  during the periods involved (except (i) as may be otherwise
                  indicated in such financial statements or the notes thereto or
                  (ii) in the case of unaudited interim statements, to the
                  extent they may not include footnotes or may be condensed or
                  summary statements), and fairly present in all material
                  respects the financial position of the Company and its
                  subsidiaries as of the dates thereof and the results of
                  operations and cash flows for the periods then ended (subject,
                  in the case of unaudited statements, to normal year-end audit
                  adjustments).

            7.    Subsidiaries. Schedule 2.1(g) hereto sets forth each
                  subsidiary of the Company showing the jurisdiction of its
                  incorporation or organization and showing the percentage of
                  the Company's ownership of the outstanding stock or other
                  interests of such subsidiary. For the purposes of this
                  Agreement, "subsidiary" shall mean any corporation or other
                  entity of which at least a majority of the securities or other
                  ownership interest having ordinary voting power (absolutely or
                  contingently) for the election of directors or other persons
                  performing similar functions are at the time owned directly or
                  indirectly by the Company and/or any of its other
                  subsidiaries. All of the outstanding shares of capital stock
                  of each subsidiary have been duly authorized and validly
                  issued, and are fully paid and non-assessable. Except as
                  disclosed on Schedule 2.1(g) there are no outstanding
                  preemptive, conversion or other rights, options, warrants or
                  agreements granted or issued by or binding upon any subsidiary
                  for the purchase or
<PAGE>

                  acquisition of any shares of capital stock of any subsidiary
                  or any other securities convertible into, exchangeable for or
                  evidencing the rights to subscribe for any shares of such
                  capital stock. Neither the Company nor any subsidiary is
                  subject to any obligation (contingent or otherwise) to
                  repurchase or otherwise acquire or retire any shares of the
                  capital stock of any subsidiary or any convertible securities,
                  rights, warrants or options of the type described in the
                  preceding sentence. Neither the Company nor any subsidiary is
                  party to, nor has any knowledge of, any agreement restricting
                  the voting or transfer of any shares of the capital stock of
                  any subsidiary.

            8.    No Material Adverse Change. Since September 30, 1999, the date
                  through which the most recent report of the Company has been
                  prepared and filed with the Commission (a copy of which is
                  included in the Commission Documents) the Company has not
                  experienced or suffered any Material Adverse Effect, except as
                  disclosed on Schedule 2.1(h) hereto.

            9.    No Undisclosed Liabilities. Except as disclosed on Schedule
                  2.1(i) hereto, neither the Company nor any of its subsidiaries
                  has any liabilities, obligations, claims or losses (whether
                  liquidated or unliquidated, secured or unsecured, absolute,
                  accrued, contingent or otherwise) other than those incurred in
                  the ordinary course of the Company's or its subsidiaries
                  respective businesses since September 30, 1999, and which,
                  individually or in the aggregate, do not or would not have a
                  Material Adverse Effect.

            10.   No Undisclosed Events or Circumstances. No event or
                  circumstance has occurred or exists with respect to the
                  Company or its subsidiaries or their respective businesses,
                  properties, prospects, operations or financial condition,
                  which, under applicable law, rule or regulation, requires
                  public disclosure or announcement by the Company but which has
                  not been so publicly announced or disclosed.

            11.   Indebtedness. Schedule 2.1(k) hereto sets forth as of the date
                  hereof all outstanding secured and unsecured Indebtedness of
                  the Company or any subsidiary, or for which the Company or any
                  subsidiary has commitments. For the purposes of this
                  Agreement, "Indebtedness" shall mean (a) any liabilities for
                  borrowed money or amounts owed in excess of $25,000 (other
                  than trade accounts payable incurred in the ordinary course of
                  business), (b) all guaranties, endorsements and other
                  contingent obligations in respect of Indebtedness of others,
                  whether or not the same are or should be reflected in the
                  Company's balance sheet (or the notes thereto), except
                  guaranties by endorsement of negotiable instruments for
                  deposit or collection or similar transactions in the ordinary
                  course of business; and (c) the present
<PAGE>

                  value of any lease payments in excess of $25,000 due under
                  leases required to be capitalized in accordance with GAAP.
                  Except as disclosed on Schedule 2.1(k), neither the Company
                  nor any subsidiary is in default with respect to any
                  Indebtedness.

            12.   Title to Assets. Each of the Company and its subsidiaries has
                  good and marketable title to all of its real and personal
                  property, free of any mortgages, pledges, charges, liens,
                  security interests or other encumbrances, except for those
                  indicated on Schedule 2.1(l) hereto or such that, individually
                  or in the aggregate, do not cause a Material Adverse Effect on
                  the Company's financial condition or operating results. Except
                  as described on Schedule 2.1(l), all said leases of the
                  Company and each of its subsidiaries are valid and subsisting
                  and in full force and effect.

            13.   Actions Pending. There is no action, suit, claim,
                  investigation or proceeding pending or, to the knowledge of
                  the Company, threatened against the Company or any subsidiary
                  which questions the validity of this Agreement or the
                  transactions contemplated hereby or any action taken or to be
                  taken pursuant hereto or thereto. There is no action, suit,
                  claim, investigation or proceeding pending or, to the
                  knowledge of the Company, threatened, against or involving the
                  Company, any subsidiary or any of their respective properties
                  or assets, except as set forth on Schedule 2.1(m) hereto.
                  There are no outstanding orders, judgments, injunctions,
                  awards or decrees of any court, arbitrator or governmental or
                  regulatory body against the Company or any subsidiary or any
                  officers or directors of the Company or subsidiary in their
                  capacities as such.

            14.   Compliance with Law. The business of the Company and the
                  subsidiaries has been and is presently being conducted in
                  accordance with all applicable federal, state and local
                  governmental laws, rules, regulations and ordinances, except
                  as set forth on Schedule 2.1(n) hereto or such that,
                  individually or in the aggregate, the noncompliance therewith
                  would not have a Material Adverse Effect. The Company and each
                  of its subsidiaries have all franchises, permits, licenses,
                  consents and other governmental or regulatory authorizations
                  and approvals necessary for the conduct of its business as now
                  being conducted by it unless the failure to possess such
                  franchises, permits, licenses, consents and other governmental
                  or regulatory authorizations and approvals, individually or in
                  the aggregate, could not reasonably be expected to have a
                  Material Adverse Effect.

            15.   Taxes. Except as set forth on Schedule 2.1(o) hereto, the
                  Company and each of the subsidiaries has accurately prepared
                  and filed all
<PAGE>

                  federal, state and other tax returns required by law to be
                  filed by it, has paid or made provisions for the payment of
                  all taxes shown to be due and all additional assessments, and
                  adequate provisions have been and are reflected in the
                  financial statements of the Company and the subsidiaries for
                  all current taxes and other charges to which the Company or
                  any subsidiary is subject and which are not currently due and
                  payable. Except as disclosed on Schedule 2.1(o) hereto, none
                  of the federal income tax returns of the Company or any
                  subsidiary have been audited by the Internal Revenue Service.
                  The Company has no knowledge of any additional assessments,
                  adjustments or contingent tax liability (whether federal or
                  state) of any nature whatsoever, whether pending or threatened
                  against the Company or any subsidiary for any period, nor of
                  any basis for any such assessment, adjustment or contingency.

            16.   Certain Fees. The Company has not employed any broker or
                  finder or incurred any liability for any brokerage or
                  investment banking fees, commissions, finders' or structuring
                  fees, financial advisory fees or other similar fees in
                  connection with the Transaction Documents, except as set forth
                  on Schedule 2.1(p) hereto. All those entities listed on
                  Schedule 2.1(p) hereto are broker/dealers (i) registered and
                  in good standing with the National Association of Securities
                  Dealers, Inc. and (ii) registered pursuant to Section 15 of
                  the Securities Exchange Act of 1934, as amended (the "Exchange
                  Act").

            17.   Disclosure. To the best of the Company's knowledge, neither
                  this Agreement or the Schedules hereto nor any other
                  documents, certificates or instruments furnished to the
                  Purchasers by or on behalf of the Company or any subsidiary in
                  connection with the transactions contemplated by this
                  Agreement or any of the other Transaction Document contain or
                  will contain any untrue statement of a material fact or omit
                  to state a material fact necessary in order to make the
                  statements made herein or therein, in the light of the
                  circumstances under which they were made herein or therein,
                  not misleading.

            18.   Operation of Business. The Company and each of the
                  subsidiaries owns or possesses all patents, trademarks, domain
                  names (whether or not registered) and any patentable
                  improvements or copyrightable derivative works thereof,
                  websites and intellectual property rights relating thereto,
                  service marks, trade names, copyrights, licenses and
                  authorizations, including (but not limited to) those set forth
                  on Schedule 2.1(r) hereto, and all rights with respect to the
                  foregoing, which are necessary for the conduct of its business
                  as now conducted without any conflict with the rights of
                  others except as disclosed on Schedule 2.1(r).
<PAGE>

            19.   Environmental Compliance. Except as disclosed on Schedule
                  2.1(s) hereto, the Company and each of its subsidiaries have
                  obtained all material approvals, authorization, certificates,
                  consents, licenses, orders and permits or other similar
                  authorizations of all governmental authorities, or from any
                  other person, that are required under any Environmental Laws.
                  Schedule 2.1(s) hereto sets forth all material permits,
                  licenses and other authorizations issued under any
                  Environmental Laws to the Company or its subsidiaries.
                  "Environmental Laws" shall mean all applicable laws relating
                  to the protection of the environment including, without
                  limitation, all requirements pertaining to reporting,
                  licensing, permitting, controlling, investigating or
                  remediating emissions, discharges, releases or threatened
                  releases of hazardous substances, chemical substances,
                  pollutants, contaminants or toxic substances, materials or
                  wastes, whether solid, liquid or gaseous in nature, into the
                  air, surface water, groundwater or land, or relating to the
                  manufacture, processing, distribution, use, treatment,
                  storage, disposal, transport or handling of hazardous
                  substances, chemical substances, pollutants, contaminants or
                  toxic substances, material or wastes, whether solid, liquid or
                  gaseous in nature. Except as set forth on Schedule 2.1(s)
                  hereto, the Company has all necessary governmental approvals
                  required under all Environmental Laws and used in its business
                  or in the business of any of its subsidiaries. The Company and
                  each of its subsidiaries are also in compliance with all other
                  limitations, restrictions, conditions, standards,
                  requirements, schedules and timetables required or imposed
                  under all Environmental Laws. Except for such instances as
                  would not individually or in the aggregate have a Material
                  Adverse Effect, there are no past or present events,
                  conditions, circumstances, incidents, actions or omissions
                  relating to or in any way affecting the Company or its
                  subsidiaries that violate or may violate any Environmental Law
                  after any of the Closings or that may give rise to any
                  environmental liability, or otherwise form the basis of any
                  claim, action, demand, suit, proceeding, hearing, study or
                  investigation (i) under any Environmental Law, or (ii) based
                  on or related to the manufacture, processing, distribution,
                  use, treatment, storage (including without limitation
                  underground storage tanks), disposal, transport or handling,
                  or the emission, discharge, release or threatened release of
                  any hazardous substance. "Environmental Liabilities" means all
                  liabilities of a person (whether such liabilities are owed by
                  such person to governmental authorities, third parties or
                  otherwise) whether currently in existence or arising hereafter
                  which arise under or relate to any Environmental Law.

            20.   Books and Record Internal Accounting Controls. The records and
                  documents of the Company and its subsidiaries accurately
                  reflect in
<PAGE>

                  all material respects the information relating to the business
                  of the Company and the subsidiaries, the location and
                  collection of their assets, and the nature of all transactions
                  giving rise to the obligations or accounts receivable of the
                  Company or any subsidiary. The Company and each of its
                  subsidiaries maintain a system of internal accounting controls
                  sufficient, in the judgment of the Company's board of
                  directors, to provide reasonable assurance that (i)
                  transactions are executed in accordance with management's
                  general or specific authorizations, (ii) transactions are
                  recorded as necessary to permit preparation of financial
                  statements in conformity with generally accepted accounting
                  principles and to maintain asset accountability, (iii) access
                  to assets is permitted only in accordance with management's
                  general or specific authorization and (iv) the recorded
                  accountability for assets is compared with the existing assets
                  at reasonable intervals and appropriate actions is taken with
                  respect to any differences.

            21.   Material Agreements. Except as set forth in the Commission
                  Documents or on Schedule 2.1(u) hereto, neither the Company
                  nor any subsidiary is a party to any written or oral contract,
                  instrument, agreement, commitment, obligation, plan or
                  arrangement, a copy of which would be required to be filed
                  with the Commission as an exhibit to a registration statement
                  on Form S-1 or applicable form (collectively, "Material
                  Agreements") if the Company or any subsidiary were registering
                  securities under the Securities Act. Except as set forth on
                  Schedule 2.1(u) hereto, the Company and each of its
                  subsidiaries has in all material respects performed all the
                  obligations required to be performed by them to date under the
                  foregoing agreements, have received no notice of default and,
                  to the best of the Company's knowledge are not in default
                  under any Material Agreement now in effect, the result of
                  which could cause a Material Adverse Effect. No written or
                  oral contract, instrument, agreement, commitment, obligation,
                  plan or arrangement of the Company or of any subsidiary limits
                  or shall limit the payment of dividends on the Company's
                  Common Stock.

            22.   Transactions with Affiliates. Except as set forth on Schedule
                  2.1(v) hereto, there are no loans, leases, agreements,
                  contracts, royalty agreements, management contracts or
                  arrangements or other continuing transactions exceeding
                  $100,000 between (a) the Company, any subsidiary or any of
                  their respective customers or suppliers on the one hand, and
                  (b) on the other hand, any officer, employee, consultant or
                  director of the Company, or any of its subsidiaries, or any
                  person owning any capital stock of the Company or any
                  subsidiary or any member of the immediate family of such
                  officer, employee, consultant, director or stockholder or any
                  corporation or other entity controlled
<PAGE>

                  by such officer, employee, consultant, director or
                  stockholder, or a member of the immediate family of such
                  officer, employee, consultant, director or stockholder.

            23.   Securities Act of 1933. The Company has complied and will
                  comply with all applicable federal and state securities laws
                  in connection with the offer, issuance and sale of the Common
                  Shares and the Warrants hereunder. Neither the Company nor
                  anyone acting on its behalf, directly or indirectly, has or
                  will sell, offer to sell or solicit offers to buy any of the
                  Shares, or similar securities to, or solicit offers with
                  respect thereto from, or enter into any preliminary
                  conversations or negotiations relating thereto with, any
                  person, or has taken or will take any action so as to bring
                  the issuance and sale of any of the Shares under the
                  registration provisions of the Securities Act and any other
                  applicable federal and state securities laws. Neither the
                  Company nor any of its affiliates, nor any person acting on
                  its or their behalf, has engaged in any form of general
                  solicitation or general advertising (within the meaning of
                  Regulation D under the Securities Act) in connection with any
                  of the Shares.

            24.   Governmental Approvals. Except as set forth on Schedule 2.1(x)
                  hereto, and except for the filing of any notice prior or
                  subsequent to the Closing that may be required under
                  applicable state or federal securities laws (which if
                  required, shall be filed on a timely basis), including, but
                  not limited to, the filing of a registration statement or
                  statements pursuant to the Registration Rights Agreement, no
                  authorization, consent, approval, license exemption of, filing
                  or registration with any court or governmental department,
                  commission, board, bureau, agency or instrumentality, domestic
                  or foreign, is or will be necessary for, or in connection
                  with, the execution or delivery of the Common Shares, or for
                  the performance by the Company of its obligations under the
                  Transaction Documents.

            25.   Employees. Neither the Company nor any subsidiary has any
                  collective bargaining arrangements or agreements covering any
                  of its employees, except as set forth on Schedule 2.1(y)
                  hereto. Except as set forth on Schedule 2.1(y) hereto, neither
                  the Company nor any subsidiary has any employment contract,
                  agreement regarding proprietary information, non-competition
                  agreement, non-solicitation agreement, confidentiality
                  agreement, or any other similar contract or restrictive
                  covenant, relating to the right of any officer, employee or
                  consultant to be employed or engaged by the Company or such
                  subsidiary. Since September 30, 1999, no officer, consultant
                  or key employee of the Company or any subsidiary whose
                  termination, either individually or in the aggregate, could
                  have a Material Adverse Effect, has terminated or, to the
                  knowledge of the Company, has any present
<PAGE>

                  intention of terminating his or her employment or engagement
                  with the Company or any subsidiary.

            26.   Absence of Certain Developments. Except as provided in
                  Schedule 2.1(z) hereto, since September 30, 1999, neither the
                  Company nor any subsidiary has:

                  (a)   issued any stock, bonds or other corporate securities or
                        any rights, options or warrants with respect thereto;

                  (b)   borrowed any amount or incurred or become subject to any
                        liabilities (absolute or contingent) except current
                        liabilities incurred in the ordinary course of business
                        which are comparable in nature and amount to the current
                        liabilities incurred in the ordinary course of business
                        during the comparable portion of its prior fiscal year,
                        as adjusted to reflect the current nature and volume of
                        the Company's or such subsidiary's business;

                  (c)   discharged or satisfied any lien or encumbrance or paid
                        any obligation or liability (absolute or contingent),
                        other than current liabilities paid in the ordinary
                        course of business;

                  (d)   declared or made any payment or distribution of cash or
                        other property to stockholders with respect to its
                        stock, or purchased or redeemed, or made any agreements
                        so to purchase or redeem, any shares of its capital
                        stock;

                  (e)   sold, assigned or transferred any other tangible assets,
                        or canceled any debts or claims, except in the ordinary
                        course of business;

                  (f)   sold, assigned or transferred any patent rights,
                        trademarks, trade names, copyrights, trade secrets or
                        other intangible assets or intellectual property rights,
                        or disclosed any proprietary confidential information to
                        any person except to customers in the ordinary course of
                        business or to the Purchasers or their representatives;

                  (g)   suffered any substantial losses or waived any rights of
                        material value, whether or not in the ordinary course of
                        business, or suffered the loss of any material amount of
                        prospective business;

                  (h)   made any changes in employee compensation except in the
                        ordinary course of business and consistent with past
                        practices;
<PAGE>

                  (i)   made capital expenditures or commitments therefor that
                        aggregate in excess of $100,000;

                  (j)   entered into any other transaction other than in the
                        ordinary course of business, or entered into any other
                        material transaction, whether or not in the ordinary
                        course of business;

                  (k)   made charitable contributions or pledges in excess of
                        $25,000;

                  (l)   suffered any material damage, destruction or casualty
                        loss, whether or not covered by insurance;

                  (m)   experienced any material problems with labor or
                        management in connection with the terms and conditions
                        of their employment;

                  (n)   effected any two (2) or more events of the foregoing
                        kind which in the aggregate would be material to the
                        Company or its subsidiaries; or

                  (o)   entered into an agreement, written or otherwise, to take
                        any of the foregoing actions.

            27.   Use of Proceeds. The proceeds from the sale of the Common
                  Shares and the Warrants will be used by the Company for
                  working capital and general corporate purposes.

            28.   Public Utility Holding Company Act and Investment Company Act
                  Status. The Company is not a "holding company" or a "public
                  utility company" as such terms are defined in the Public
                  Utility Holding Company Act of 1935, as amended. The Company
                  is not, and as a result of and immediately upon any Closing
                  will not be, an "investment company" or a company "controlled"
                  by an "investment company," within the meaning of the
                  Investment Company Act of 1940, as amended.

            29.   ERISA. No liability to the Pension Benefit Guaranty
                  Corporation has been incurred with respect to any Plan by the
                  Company or any of its subsidiaries which is or would be
                  materially adverse to the Company and its subsidiaries. The
                  execution, delivery and performance of this Agreement and the
                  other Transaction Documents and the issue and sale of the
                  Common Shares and the Warrants will not involve any
                  transaction which is subject to the prohibitions of Section
                  406 of ERISA or in connection with which a tax could be
                  imposed pursuant to Section 4975 of the Internal Revenue Code
                  of 1986, as amended,
<PAGE>

                  provided that, if any of the Purchasers, or any person or
                  entity that owns a beneficial interest in any of the
                  Purchasers, is an "employee pension benefit plan" (within the
                  meaning of Section 3(2) of ERISA) with respect to which the
                  Company is a "party in interest" (within the meaning of
                  Section 3(14) of ERISA), the requirements of Sections
                  407(d)(5) and 408(e) of ERISA, if applicable, are met. As used
                  in this Section 2.1(ac), the term "Plan" shall mean an
                  "employee pension benefit plan" (as defined in Section 3 of
                  ERISA) which is or has been established or maintained, or to
                  which contributions are or have been made, by the Company or
                  any subsidiary or by any trade or business, whether or not
                  incorporated, which, together with the Company or any
                  subsidiary, is under common control, as described in Section
                  414(b) or (c) of the Code.

            30.   Dilutive Effect. The Company understands and acknowledges that
                  the number of the Warrant Shares issuable upon exercise of the
                  Warrants will increase in certain circumstances. The Company
                  further acknowledges that its obligations to issue the Warrant
                  Shares upon the exercise of the Warrants in accordance with
                  this Agreement and the Warrants, is, in each case, absolute
                  and unconditional regardless of the dilutive effect that such
                  issuance may have on the ownership interest of other
                  stockholders of the Company.

            31.   No "Directed Selling Efforts". In connection with the offer
                  and sale of the Common Shares, the Warrants and the Warrant
                  Shares, no distributor or any affiliates or any person acting
                  on behalf of the Company or any affiliate of the Company or
                  any distributor has engaged in any "directed selling efforts"
                  (as such term is defined in Rule 902(c) of Regulation S) nor
                  conducted any general solicitation relating to the offer to
                  persons residing within the United States or to "U.S. Persons"
                  (as such term is defined in Rule 902(o) of Regulation S).

      VVVV. Representations and Warranties of the Purchasers Each of the
            Purchasers hereby makes the following representations and warranties
            to the Company with respect solely to itself and not with respect to
            any other Purchaser:

            1.    Organization and Standing of the Purchasers. If the Purchaser
                  is an entity, such Purchaser is a corporation, limited
                  liability company or partnership duly incorporated or
                  organized, validly existing and in good standing under the
                  laws of the jurisdiction of its incorporation or organization,
                  and such Purchaser was not formed for the specific purpose of
                  acquiring the Shares.

            2.    Authorization and Power. The Purchaser has the requisite power
                  and authority to enter into and perform this Agreement, the
                  Registration
<PAGE>

                  Rights Agreement and the Escrow Agreement and to purchase the
                  Common Shares and the Warrants being sold to it hereunder. The
                  execution, delivery and performance of this Agreement, the
                  Registration Rights Agreement, the Escrow Agreement and the
                  documents contemplated hereby by such Purchaser and the
                  consummation by it of the transactions contemplated hereby and
                  thereby have been duly authorized by all necessary corporate,
                  limited liability company or partnership action, as applicable
                  (if the Purchaser is an entity), and no further consent or
                  authorization of such Purchaser or its Board of Directors,
                  stockholders, members, managers or partners, as the case may
                  be, is required. Each of this Agreement, the Registration
                  Rights Agreement and the Escrow Agreement will have been duly
                  executed and delivered by the Purchasers on the Closing Date.
                  Each of this Agreement, the Registration Rights Agreement and
                  the Escrow Agreement constitutes, or shall constitute when
                  executed and delivered, a valid and binding obligation of the
                  Purchaser enforceable against the Purchaser in accordance with
                  its terms, except as such enforceability may be limited by
                  applicable bankruptcy, insolvency, reorganization, moratorium,
                  liquidation, conservatorship, or similar laws relating to, or
                  affecting generally the enforcement of, creditor's rights,
                  remedies or by other equitable principles of general
                  application.

            3.    No Conflicts. The execution, delivery and performance of this
                  Agreement, the Registration Rights Agreement, the Escrow
                  Agreement and the documents contemplated hereby and thereby
                  and the consummation by such Purchaser of the transactions
                  contemplated hereby and thereby or relating hereto do not and
                  will not (i) result in a violation of such Purchaser's charter
                  documents, bylaws, partnership agreement, operating agreement
                  or other organizational documents, or (ii) conflict with,
                  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 such Purchaser is a party, or result in a violation of
                  any law, rule, or regulation, or any order, judgment or decree
                  of any court or governmental agency applicable to such
                  Purchaser or its properties (except for such conflicts,
                  defaults and violations as would not, individually or in the
                  aggregate, have a material adverse effect on such Purchaser).
                  Such Purchaser is not required to obtain any consent,
                  authorization or order of, or make any filing or registration
                  with, any court or governmental agency in order for it to
                  execute, deliver or perform any of its obligations under this
                  Agreement, the Registration Rights Agreement, the Escrow
                  Agreement or the documents contemplated hereby and thereby or
                  to purchase the Common Shares and the Warrants in accordance
                  with
<PAGE>

                  the terms hereof, provided that for purposes of the
                  representation made in this sentence, such Purchaser is
                  assuming and relying upon the accuracy of the relevant
                  representations and agreements of the Company herein.

            4.    Acquisition for Investment. Such Purchaser is purchasing the
                  Common Shares and the Warrants solely for its own account for
                  the purpose of investment and not with a view to or for sale
                  in connection with distribution. Such Purchaser does not have
                  a present intention to sell the Common Shares or the Warrants,
                  nor a present arrangement (whether or not legally binding) or
                  intention to effect any distribution of the Common Shares or
                  the Warrants to or through any person or entity; provided,
                  however, that by making the representations herein and subject
                  to Section 2.2(f) below, such Purchaser does not agree to hold
                  the Common Shares or the Warrants for any minimum or other
                  specific term and reserves the right to dispose of the Common
                  Shares or the Warrants at any time in accordance with federal
                  securities laws applicable to such disposition. Such Purchaser
                  acknowledges that it is able to bear the financial risks
                  associated with an investment in the Common Shares or the
                  Warrants and that it has been given full access to such
                  records of the Company and the subsidiaries and to the
                  officers of the Company and the subsidiaries as it has deemed
                  necessary or appropriate to conduct its due diligence
                  investigation.

            5.    Non-U.S. Person. Such Purchaser is not a "U.S. Person" (as
                  defined in Rule 902(o) of Regulation S) and is not acquiring
                  any of the Common Shares, the Warrants or the Warrant Shares
                  for the account or benefit of any U.S. Person. The documents
                  effecting the purchase and sale of the Common Shares and the
                  Warrants has been executed by such Purchaser outside the
                  "United States" (as defined in Rule 902(p) of Regulation S).

            6.    Offshore Transaction. The Common Shares and the Warrants were
                  not offered to such Purchaser in the United States and at the
                  time of execution of this Agreement and the time of any offer
                  to such Purchaser to purchase the Common Shares and the
                  Warrants, such Purchaser was physically outside of the United
                  States. The offer leading to the sale evidenced hereby was
                  made in an "offshore transaction" (as defined in Rule 902(h)
                  of Regulation S).

            7.    Accredited Purchasers. Such Purchaser is an "accredited
                  investor" as defined in Regulation D promulgated under the
                  Securities Act and is a resident of the jurisdiction indicated
                  on Exhibit A hereto. Purchaser has such knowledge and
                  experience in financial and
<PAGE>

                  business matters that Purchaser is capable of evaluating the
                  merits and risks of Purchaser's investment in the Company.

            8.    Rule 144. Such Purchaser understands that the Shares and
                  Warrants must be held indefinitely unless such Shares and
                  Warrants are registered under the Securities Act or an
                  exemption from registration is available. Such Purchaser
                  acknowledges that such Purchaser is familiar with Rule 144 of
                  the rules and regulations of the Commission, as amended,
                  promulgated pursuant to the Securities Act ("Rule 144"), and
                  that such Purchaser has been advised that Rule 144 permits
                  resales only under certain circumstances. Such Purchaser
                  understands that to the extent that Rule 144 is not available,
                  such Purchaser will be unable to sell any Shares and the
                  Warrants without either registration under the Securities Act
                  or the existence of another exemption from such registration
                  requirement.

            9.    Transfer of Shares. Such Purchaser will not sell, offer for
                  sale, transfer or otherwise convey the Common Shares, the
                  Warrants or the Warrant Share to a U.S. Person or for the
                  account or benefit of a U.S. Person unless in accordance with
                  the provisions of Regulation S, pursuant to registration of
                  the Common Shares, the Warrants or the Warrant Shares under
                  the Securities Act or pursuant to an exemption from
                  registration.

            10.   No Broker-Dealer Affiliation. None of the Purchasers is a
                  broker-dealer registered with the Commission or an affiliate
                  (as such term is defined in Rule 144(a) promulgated under the
                  Securities Act) of a broker-dealer registered with the
                  Commission.

            11.   General. Such Purchaser understands that the Shares are being
                  offered and sold in reliance on a transactional exemption from
                  the registration requirement of federal and state securities
                  laws and the Company is relying upon the truth and accuracy of
                  the representations, warranties, agreements, acknowledgments
                  and understandings of such Purchaser set forth herein in order
                  to determine the applicability of such exemptions and the
                  suitability of such Purchaser to acquire the Shares. Purchaser
                  understands that no United States federal or state agency or
                  any government or governmental agency has passed upon or made
                  any recommendation or endorsement of the Common Shares and the
                  Warrants.

            12.   Opportunities for Additional Information. Such Purchaser
                  acknowledges that such Purchaser has had the opportunity to
                  ask questions of and receive answers from, or obtain
                  additional information from, the executive officers of the
                  Company concerning the financial and other affairs of the
                  Company, and to the extent
<PAGE>

                  deemed necessary in light of such Purchaser's personal
                  knowledge of the Company's affairs, such Purchaser has asked
                  such questions and received answers to the full satisfaction
                  of such Purchaser, and such Purchaser desires to invest in the
                  Company.

            13.   No General Solicitation. Such Purchaser acknowledges that the
                  Common Shares and Warrants were not offered to such Purchaser
                  by means of any form of general or public solicitation or
                  general advertising, or publicly disseminated advertisements
                  or sales literature, including (i) any advertisement, article,
                  notice or other communication published in any newspaper,
                  magazine, or similar media, or broadcast over television or
                  radio, or (ii) any seminar or meeting to which such Purchaser
                  was invited by any of the foregoing means of communications.

            14.   No Commissions or Similar Fees. In connection with the
                  purchase of the Common Shares and Warrants by such Purchaser,
                  such Purchaser has not and will not pay, and has no knowledge
                  of the payment of, any commission or other direct or indirect
                  remuneration to any person or entity for soliciting or
                  otherwise coordinating the purchase of such securities, except
                  to such persons or entities as are duly licensed and/or
                  registered to engage in securities offering and selling
                  activities (or are exempt from such licensing and/or
                  registration requirements) under applicable federal laws and
                  the laws of the state(s) in which such activities have taken
                  place in connection with the transaction contemplated by this
                  agreement.

            15.   Reliance by the Company. Purchaser understands fully the
                  meaning and legal consequences of the provisions herein, and
                  agrees to indemnify and hold harmless the Company, and each
                  other person, if any subject to liability because of such
                  person's connection with the Company, against all actions,
                  claims, losses, damages and liabilities arising out of or
                  based upon any false representation or warranty herein, or any
                  breach by the undersigned of any provision hereof, and to
                  reimburse the Company and each such other person for any legal
                  and other expenses incurred by the Company and each such other
                  person in connection with investigating, defending, and, if
                  appropriate, settling any action, claim, loss, damage or
                  liability.

      Covenants

The Company covenants with each of the Purchasers, which covenants are for the
benefit of each of the Purchasers and their permitted assignees (as defined
herein) as follows:

      WWWW. Securities Compliance.
<PAGE>

            1.    The Company shall notify the Commission in accordance with
                  their rules and regulations of the transactions contemplated
                  by any of the Transaction Documents, as may be required, and
                  shall take all other necessary action and proceedings as may
                  be required and permitted by applicable law, rule and
                  regulation, for the legal and valid issuance of the Common
                  Shares and the Warrant Shares to the Purchasers or subsequent
                  holders.

            2.    The Company is relying upon the truth and accuracy of the
                  representations, warranties, agreements, acknowledgments and
                  understandings of such Purchasers set forth herein in order to
                  determine the applicability of federal and state securities
                  laws exemptions and the suitability of such Purchasers to
                  acquire the Shares and the Warrants.

      XXXX. Registration and Listing. The Company will cause a registration
            statement registering the Common Shares and the Warrant Shares to be
            filed no later than forty-five (45) days after the Closing Date and
            cause the registration statement to be declared effective within (i)
            ninety (90) days after the Closing Date or (ii) five (5) business
            days of the date on which the Commission informs the Company that it
            may request the acceleration of the effectiveness of the
            registration statement, whichever date is the earlier (the
            "Effectiveness Date"), will comply in all respects with its
            reporting and filing obligations under the Exchange Act, will comply
            with all requirements related to any registration statement filed
            pursuant to this Agreement or the Registration Rights Agreement, and
            will not take any action or file any document (whether or not
            permitted by the Securities Act or the rules promulgated thereunder)
            to terminate or suspend such registration or to terminate or suspend
            its reporting and filing obligations under the Exchange Act or
            Securities Act, except as permitted herein. The Company will take
            all action necessary to continue the listing or trading of its
            Common Stock on the Nasdaq SmallCap Market.

      YYYY. Inspection Rights. The Company shall permit, during normal business
            hours and upon reasonable request and reasonable notice, each
            Purchaser or any employees, agents or representatives thereof, so
            long as such Purchaser shall be obligated hereunder to purchase the
            Common Shares or shall own Common Shares which, in the aggregate,
            represent more than 2% of the total combined voting power of all
            voting securities then outstanding, to examine and make reasonable
            copies of and extracts from the records and books of account of, and
            visit and inspect the properties, assets, operations and business of
            the Company and any subsidiary, and to discuss the affairs, finances
            and accounts of the Company and any subsidiary with any of its
            officers, consultants, directors, and key employees.

      ZZZZ. Compliance with Laws. The Company shall comply, and cause each
            subsidiary to comply, with all applicable laws, rules, regulations
            and orders, noncompliance with which could have a Material Adverse
            Effect.
<PAGE>

       AAAAA. Keeping of Records and Books of Account. The Company shall keep
              and cause each subsidiary to keep adequate records and books of
              account, in which complete entries will be made in accordance with
              GAAP consistently applied, reflecting all financial transactions
              of the Company and its subsidiaries, and in which, for each fiscal
              year, all proper reserves for depreciation, depletion,
              obsolescence, amortization, taxes, bad debts and other purposes in
              connection with its business shall be made.

       BBBBB. Reporting Requirements The Company shall furnish the following, if
              and when applicable, to each Purchaser so long as such Purchaser
              shall be obligated hereunder to purchase the Common Shares or
              shall own Common Shares which, in the aggregate, represent more
              than 2% of the total combined voting power of all voting
              securities then outstanding:

              1.     Reports filed with the Commission on Form 10-QSB, as soon
                     as available, and in any event within fifteen (15) days
                     after filing such report with the Commission;

              2.     Annual Reports filed with the Commission on Form 10-KSB, as
                     soon as available, and in any event within ninety (90) days
                     after the end of each fiscal year of the Company; and

              3.     Copies of all notices and information, including without
                     limitation notices and proxy statements in connection with
                     any meetings, that are provided to holders of shares of
                     Common Stock, contemporaneously with the delivery of such
                     notices or information to such holders of Common Stock.

       CCCCC. Amendments. The Company shall not amend or waive any provision of
              the Articles or Bylaws of the Company, or the Registration Rights
              Agreement in any way that would adversely affect the liquidation
              preferences, dividends rights, conversion rights, voting rights or
              redemption rights of the holders of the Common Shares or the
              Warrant Shares.

       DDDDD. Other Agreements The Company shall not enter into any agreement in
              which the terms of such agreement would restrict or impair the
              right or ability to perform of the Company or any subsidiary under
              any Transaction Document.

       EEEEE. Distributions. So long as any Warrants remain outstanding, the
              Company agrees that it shall not (i) declare or pay any dividends
              or make any distributions to any holder(s) of Common Stock or (ii)
              purchase or otherwise acquire for value, directly or indirectly,
              any Common Stock or other equity security of the Company.

       FFFFF. Intentionally Omitted.

       GGGGG. Intentionally Omitted.
<PAGE>

       HHHHH. Intentionally Omitted.

       IIIII. Subsequent Financing. During the ninety (90) day period
              immediately following the Effectiveness Date, the Company
              covenants and agrees that it will not, without the prior written
              consent of the Purchasers, enter into any subsequent offer or sale
              to, or exchange with (or other type of distribution to), any third
              party (a "Subsequent Financing"), of Common Stock or any
              securities convertible or exchangeable into Common Stock,
              including debt securities (collectively, the "Financing
              Securities"). Notwithstanding the foregoing, a Subsequent
              Financing shall not include any transaction involving the
              Company's (i) issuance of any Financing Securities (other than for
              cash) in connection with a merger and/or acquisition,
              consolidation, sale or disposition of all or substantially all of
              the Company's assets, (ii) exchange of capital stock for assets,
              (iii) public offering at market, or (iv) issuance of Common Stock
              or the issuance of options to purchase Common Stock as such is
              related to any employee stock ownership plan.

       JJJJJ. Reservation of Shares. So long as any of the Common Shares or
              Warrants remain outstanding, the Company shall take all action
              necessary to at all times have authorized, and reserved for the
              purpose of issuance, no less than 100% of the aggregate number of
              shares of Common Stock needed to provide for the issuance of the
              Common Shares and the Warrant Shares.

       KKKKK. Transfer Agent Instructions. The Company shall issue irrevocable
              instructions to its transfer agent, and any subsequent transfer
              agent, to issue certificates, registered in the name of each
              Purchaser or its respective nominee(s), for the Common Shares and
              the Warrant Shares in such amounts as specified from time to time
              by each Purchaser to the Company upon issuance of the Common
              Shares or exercise of the Warrants in the form of Exhibit E
              attached hereto (the "Irrevocable Transfer Agent Instructions").
              Prior to registration of the Common Shares and the Warrant Shares
              under the Securities Act, all such certificates shall bear the
              restrictive legend specified in Section 6.1 of this Agreement. The
              Company warrants that no instruction other than the Irrevocable
              Transfer Agent Instructions referred to in this Section 3.15 will
              be given by the Company to its transfer agent and that the Shares
              shall otherwise be freely transferable on the books and records of
              the Company as and to the extent provided in this Agreement and
              the Registration Rights Agreement. Nothing in this Section 3.15
              shall affect in any way each Purchaser's obligations and
              agreements set forth in Section 6.1 to comply with all applicable
              prospectus delivery requirements, if any, upon resale of the
              Shares. If a Purchaser provides the Company with an opinion of
              counsel, in a generally acceptable form, to the effect that a
              public sale, assignment or transfer of the Shares may be made
              without registration under the Securities Act or the Purchaser
              provides the Company with reasonable assurances that the Shares
              can be sold pursuant to Rule 144 without any restriction as to the
              number of securities acquired as of a particular date that can
              then be immediately sold, the Company shall permit the transfer,
              and, in the case of the Common Shares and the Warrant Shares,
              promptly instruct its transfer agent to issue one (1) or more
              certificates in such name and in such denominations as specified
              by such
<PAGE>

              Purchaser and without any restrictive legend. The Company
              acknowledges that a breach by it of its obligations under this
              Section 3.15 will cause irreparable harm to the Purchasers 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 Section 3.15 will
              be inadequate and agrees, in the event of a breach or threatened
              breach by the Company of the provisions of this Section 3.15, that
              the Purchasers shall be entitled, in addition to all other
              available remedies, to an order and/or 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.

       Conditions
       LLLLL. Conditions Precedent to the Obligation of the Company to Sell the
              Shares at Closing. The obligation hereunder of the Company to
              issue and sell the Common Shares and Warrants to the Purchasers at
              the Closing is subject to the satisfaction or waiver, at or before
              the Closing, of each of the conditions set forth below. These
              conditions are for the Company's sole benefit and may be waived by
              the Company at any time in its sole discretion.
<PAGE>

              1.     Accuracy of Each Purchaser's Representations and
                     Warranties. The representations and warranties of each
                     Purchaser shall be true and correct in all material
                     respects as of the date when made and as of the Closing
                     Date as though made at that time, except for
                     representations and warranties that are expressly made as
                     of a particular date, which shall be true and correct in
                     all material respects as of such date.

              2.     Performance by the Purchasers. Each Purchaser shall have
                     performed, satisfied and complied in all material respects
                     with all covenants, agreements and conditions required by
                     this Agreement to be performed, satisfied or complied with
                     by such Purchaser at or prior to the Closing, including
                     having paid by wire transfer of funds into escrow in
                     accordance with this Agreement and the Escrow Agreement the
                     Purchase Price set forth opposite such Purchaser's name on
                     Exhibit A under the heading "Purchase Prices"; such
                     Purchaser shall have executed and delivered this Agreement,
                     the Registration Rights Agreement and the Escrow Agreement
                     to the Escrow Agent on behalf of the Company. The Escrow
                     Agent shall have performed, satisfied and complied in all
                     material respects with all covenants, agreements and
                     conditions required by this Agreement and the Escrow
                     Agreement to be performed, satisfied or complied with by
                     the Escrow Agent at or prior to the Closing, including
                     delivery of all of the Purchaser's Closing Documents to the
                     Company.

              3.     No Injunction. 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 which
                     prohibits the consummation of any of the transactions
                     contemplated by this Agreement.

       MMMMM. Conditions Precedent to the Obligation of the Purchasers to
              Purchase the Shares at the Closing. The obligation hereunder of
              each Purchaser to acquire and pay for the applicable Common Shares
              and Warrants at the Closing is subject to the satisfaction or
              waiver, at or before the Closing, of each of the conditions set
              forth below. These conditions are for each Purchaser's sole
              benefit and may be waived by such Purchaser at any time in its
              sole discretion.

              1.     Accuracy of the Company's Representations and Warranties.
                     Each of the representations and warranties of the Company
                     shall be true and correct in all material respects as of
                     the date when made and as of the Closing Date as though
                     made at that time (except for representations and
                     warranties that speak as of a particular date), which shall
                     be true and correct in all material respects as of such
                     date.

              2.     Performance by the Company. The Company shall have
                     performed, satisfied and complied in all material respects
                     with all covenants,
<PAGE>

                     agreements and conditions required by this Agreement to be
                     performed, satisfied or complied with by the Company at or
                     prior to the Closing.

              3.     No Suspension, Etc. From the date hereof to the Closing
                     Date, trading in the Company's Common Stock shall not have
                     been suspended by the Commission, and, at any time prior to
                     the Closing Date, trading in securities generally as
                     reported by Bloomberg Financial Markets ("Bloomberg") shall
                     not have been suspended or limited, or minimum prices shall
                     not have been established on securities whose trades are
                     reported by Bloomberg, or on the New York Stock Exchange,
                     nor shall a banking moratorium have been declared either by
                     the United States, or New York State authorities, nor shall
                     there have occurred any material outbreak or escalation of
                     hostilities or other national or international calamity or
                     crisis of such magnitude in its effect on, or any material
                     adverse change in any financial market which, in each case,
                     in the judgment of such Purchaser, makes it impracticable
                     or inadvisable to purchase the Common Shares.

              4.     No Injunction. 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 which
                     prohibits the consummation of any of the transactions
                     contemplated by this Agreement.

              5.     No Proceedings or Litigation. No action, suit or proceeding
                     before any arbitrator or any governmental authority shall
                     have been commenced, and no investigation by any
                     governmental authority shall have been threatened, against
                     the Company, or any of the officers, directors or
                     affiliates of the Company seeking to restrain, prevent or
                     change the transactions contemplated by this Agreement, or
                     seeking damages in connection with such transactions.

              6.     Opinion of Counsel, Etc. At the Closing, the Purchasers
                     shall have received an opinion of counsel to the Company,
                     dated the date of such Closing, in the form of Exhibit F
                     hereto, and the such other certificates and documents as
                     the Purchaser or its counsel shall reasonably require
                     incident to the Closing.

              7.     Registration Rights Agreement. Prior to the Closing, the
                     Company shall have executed and delivered the Registration
                     Rights Agreement to the Escrow Agent on behalf of each
                     Purchaser.

              8.     Stock and Warrant Certificates. The Company shall have
                     executed and delivered to the Escrow Agent on behalf of
                     each Purchaser, the
<PAGE>

                     certificates (in such denominations as such Purchaser shall
                     request) for the Common Shares and the Warrants being
                     purchased by such Purchaser at the Closing.

              9.     Resolutions. Prior to the Closing, the Board of Directors
                     of the Company shall have adopted resolutions consistent
                     with Section 2.1(b) above in a form reasonably acceptable
                     to each Purchaser (the "Resolutions").

              10.    Reservation of Shares. As of the Closing Date, the Company
                     shall have reserved out of its authorized and unissued
                     Common Stock, solely for the purpose of effecting the
                     issuance of the Common Shares and the exercise of the
                     Warrants, a number of shares of Common Stock equal to at
                     least 100% of the shares of Common Stock which would be
                     issuable upon issuance of the Common Shares and upon
                     exercise of the Warrants following the Closing (after
                     giving effect to the Common Shares and Warrants to be
                     issued on the Closing Date and assuming all such Common
                     Shares and Warrants were fully issuable and exercisable, as
                     applicable, on such date regardless of any limitation on
                     the timing or amount of such issuances or exercises).

              11.    Transfer Agent Instructions. As of the Closing Date, the
                     Irrevocable Transfer Agent Instructions, in the form of
                     Exhibit E attached hereto, shall have been delivered to and
                     acknowledged in writing by the Company's transfer agent.

              12.    Secretary's Certificate. At the Closing, the Company shall
                     have delivered to the Escrow Agent on behalf of each
                     Purchaser a secretary's certificate, dated as of such
                     Closing Date, as to (i) the Resolutions, (ii) the Articles
                     and (iii) the Bylaws, each as in effect at the Closing, and
                     (iv) the authority and incumbency of the officers of the
                     Company executing the Transaction Documents and any other
                     documents required to be executed or delivered in
                     connection therewith.

              13.    Escrow Agreement. Prior to the Closing, the Company shall
                     have executed and delivered the Escrow Agreement to the
                     Escrow Agent on behalf of each Purchaser.

              14.    Officer's Certificate. At the Closing, the Company shall
                     have delivered to such Purchaser a certificate of an
                     executive officer of the Company, dated as of the Closing
                     Date, confirming the accuracy of the Company's
                     representations, warranties and covenants as of the Closing
                     Date and confirming the compliance by the Company with the
                     conditions precedent set forth in this Section 4.2 as of
                     the Closing Date.
<PAGE>

       Registration Rights
At the Closing, the Company and each of the Purchasers shall enter into a
Registration Rights Agreement in the form attached hereto as Exhibit D (the
"Registration Rights Agreement").

       Stock Certificate Legend
       NNNNN. Legend. Each certificate representing the Common Shares, the
              Warrants, and the securities issued upon exercise thereof, as
              applicable and appropriate, shall be stamped or otherwise
              imprinted with a legend in substantially the following form (in
              addition to any legend required by applicable federal, provincial
              or state securities or "blue sky" laws):

       THE SECURITIES REPRESENTED BY THIS CERTIFICATE (THE "SECURITIES") HAVE
       NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
       "SECURITIES ACT") OR STATE SECURITIES LAWS AND MAY NOT BE SOLD,
       TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED OR OTHERWISE DISPOSED OF
       UNLESS IN ACCORDANCE WITH REGULATION S OF THE ACT, REGISTERED UNDER THE
       ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR VIRTUAL COMMUNITIES,
       INC. (THE "COMPANY") SHALL HAVE RECEIVED AN OPINION IN FORM, SCOPE AND
       SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY, OF COUNSEL, WHO IS
       REASONABLY ACCEPTABLE TO THE COMPANY THAT REGISTRATION OF SUCH SECURITIES
       UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE FEDERAL
       AND STATE SECURITIES LAWS IS NOT REQUIRED.

       The Company agrees to reissue certificates representing the Shares or the
Warrants, without the legend set forth above if at such time, prior to making
any transfer of any Shares or the Warrants such holder thereof shall give
written notice to the Company describing the manner and terms of such transfer
and removal as the Company may reasonably request and such holder otherwise
complies with the terms of the Transaction Documents. The legend set forth above
shall be removed and the Company shall issue a certificate without such legend
to the holder of any Shares or Warrants upon which it is stamped if, unless
otherwise required by federal or state securities laws, (a) the sale of such
Shares or Warrants is registered under the Securities Act (including
registration pursuant to Rule 416 thereunder) as contemplated by the
Registration Rights Agreement (b) such holder provides the Company with an
opinion of counsel, in form, substance and scope customary for opinions of
counsel in comparable transactions, to the effect that a sale or transfer of
such Shares or Warrants may be made without registration under the Securities
Act; or (c) such holder provides the Company with reasonable assurances that
such Shares or Warrants can be sold under Rule 144(k). Each Purchaser agrees
that it will only sell Shares or Warrants, including those represented by a
certificate(s) from which the legend has been removed, pursuant to an effective
registration statement, under an exemption from the registration requirements of
the Securities Act or in accordance with Rule 144(k). In
<PAGE>

the event the above legend is removed from any Shares or Warrants and the
effectiveness of a registration statement covering such Shares or Warrants is
suspended or the Company determines that a supplement or amendment thereto is
required by applicable securities laws, then upon reasonable advance notice to
such Purchaser the Company may require that the above legend be placed on any
such Shares or Warrants that cannot then be sold pursuant to an effective
registration statement, under an exemption from the registration requirements of
the Securities Act or under Rule 144(k) and such Purchaser shall cooperate in
the replacement of such legend. Such legend shall thereafter be removed when
such Shares or Warrants may again be sold pursuant to an effective registration
statement, under an exemption from the registration requirements of the
Securities Act or under Rule 144(k). The restrictions on transfer contained in
Section 6.1 shall be in addition to, and not by way of limitation of, any other
restrictions on transfer contained in any other section of this Agreement.

       Termination
       OOOOO. Termination by Mutual Consent. This Agreement may be terminated at
              any time prior to any Closing by the mutual written consent of the
              Company and the Purchasers.

       PPPPP. Other Termination. This Agreement may be terminated by the action
              of the Board of Directors of the Company or by any one or more of
              the Purchasers at any time if the Closing shall not have been
              consummated by the Closing Date, as long as the failure to so
              consummate is not the fault of the terminating party.

       QQQQQ. Termination of Closing. If the Closing has not occurred on or
              prior to the Closing Date, those sections and provisions relating
              to the Closing in this Agreement may be terminated by the action
              of the Board of Directors of the Company or by any one or more of
              the Purchasers as long as the failure to consummate the Closing is
              not the fault of the terminating party.

       RRRRR. Effect of Termination. In the event of termination by the Company
              or any one or more of the Purchasers of this Agreement or any part
              hereof, written notice thereof shall forthwith be given to the
              other party and the transactions contemplated by this Agreement
              and the Registration Rights Agreement shall be terminated without
              further action by either party. If this Agreement is terminated as
              provided in Section 7.1 or 7.2 herein, this Agreement shall become
              void and of no further force and effect, except for Sections 9.1
              and 9.2, and Article VIII herein. Nothing in this Section 7.4
              shall be deemed to release the Company or any Purchaser from any
              liability for any breach under this Agreement or the Registration
              Rights Agreement, or to impair the rights of the Company and the
              Purchasers to compel specific performance by the other party of
              its obligations under this Agreement and the Registration Rights
              Agreement.
<PAGE>

       Indemnification
       SSSSS. General Indemnity. The Company agrees to indemnify and hold
              harmless the Purchasers (and their respective directors, officers,
              affiliates, agents, successors and assigns) from and against any
              and all losses, liabilities, deficiencies, costs, damages and
              expenses (including, without limitation, reasonable attorney's
              fees, charges and disbursements) incurred by the Purchasers as a
              result of any inaccuracy in or breach of the representations,
              warranties or covenants made by the Company herein. Each Purchaser
              severally but not jointly agrees to indemnify and hold harmless
              the Company and its directors, officers, affiliates, agents,
              successors and assigns from and against any and all losses,
              liabilities, deficiencies, costs, damages and expenses (including,
              without limitation, reasonable attorneys fees, charges and
              disbursements) incurred by the Company as result of any inaccuracy
              in or breach of the representations, warranties or covenants made
              by such Purchaser herein.

       TTTTT. Indemnification Procedure. Any party entitled to indemnification
              under this Article VIII (an "indemnified party") will give written
              notice to the indemnifying party of any matters giving rise to a
              claim for indemnification; provided, that the failure of any party
              entitled to indemnification hereunder to give notice as provided
              herein shall not relieve the indemnifying party of its obligations
              under this Article VIII except to the extent that the indemnifying
              party is actually prejudiced by such failure to give notice. In
              case any action, proceeding or claim is brought against an
              indemnified party in respect of which indemnification is sought
              hereunder, the indemnifying party shall be entitled to participate
              in and, unless in the reasonable judgment of the indemnified party
              a conflict of interest between it and the indemnifying party may
              exist with respect of such action, proceeding or claim, to assume
              the defense thereof with counsel reasonably satisfactory to the
              indemnified party. In the event that the indemnifying party
              advises an indemnified party that it will contest such a claim for
              indemnification hereunder, or fails, within thirty (30) days of
              receipt of any indemnification notice to notify, in writing, such
              person of its election to defend, settle or compromise, at its
              sole cost and expense, any action, proceeding or claim (or
              discontinues its defense at any time after it commences such
              defense), then the indemnified party may, at its option, defend,
              settle or otherwise compromise or pay such action or claim. In any
              event, unless and until the indemnifying party elects in writing
              to assume and does so assume the defense of any such claim,
              proceeding or action, the indemnified party's costs and expenses
              arising out of the defense, settlement or compromise of any such
              action, claim or proceeding shall be losses subject to
              indemnification hereunder. The indemnified party shall cooperate
              fully with the indemnifying party in connection with any
              negotiation or defense of any such action or claim by the
              indemnifying party and shall furnish to the indemnifying party all
              information reasonably available to the indemnified party which
              relates to such action or claim. The indemnifying party shall keep
              the indemnified party fully apprised at all times as to the status
              of the defense or any settlement negotiations with respect
              thereto. If the indemnifying party elects to defend any
<PAGE>

              such action or claim, then the indemnified party shall be entitled
              to participate in such defense with counsel of its choice at its
              sole cost and expense. The indemnifying party shall not be liable
              for any settlement of any action, claim or proceeding effected
              without its prior written consent. Notwithstanding anything in
              this Article VIII to the contrary, the indemnifying party shall
              not, without the indemnified party's prior written consent, settle
              or compromise any claim or consent to entry of any judgment in
              respect thereof which imposes any future obligation on the
              indemnified party or which does not include, as an unconditional
              term thereof, the giving by the claimant or the plaintiff to the
              indemnified party of a release from all liability in respect of
              such claim. The indemnification required by this Article VIII
              shall be made by periodic payments of the amount thereof during
              the course of investigation or defense, as and when bills are
              received or expense, loss, damage or liability is incurred, so
              long as the indemnified party irrevocably agrees to refund such
              moneys if it is ultimately determined by a court of competent
              jurisdiction that such party was not entitled to indemnification.
              The indemnity agreements contained herein shall be in addition to
              (a) any cause of action or similar rights of the indemnified party
              against the indemnifying party or others, and (b) any liabilities
              the indemnifying party may be subject to pursuant to the law.

       Miscellaneous
       UUUUU. Fees and Expenses. Each party shall pay the fees and expenses of
              its advisors, counsel, accountants and other experts, if any, and
              all other expenses, incurred by such party incident to the
              negotiation, preparation, execution, delivery and performance of
              this Agreement, provided that the Company shall pay $35,000, at
              the Closing, from the aggregate Purchase Prices, to pay for all
              attorneys fees and expenses (exclusive of disbursements and
              out-of-pocket expenses) incurred by the Purchasers in connection
              with the preparation, negotiation, execution and delivery of this
              Agreement, the other Transaction Documents and the consummation of
              the transactions contemplated hereunder and thereunder. In
              addition, the Company shall pay all reasonable fees and expenses
              incurred by the Purchasers in connection with any amendments,
              modifications or waivers of this Agreement or any of the other
              Transaction Documents, or incurred in connection with the
              enforcement of this Agreement or any of the other Transaction
              Documents, including, without limitation, all reasonable attorneys
              fees and expenses. The Company shall pay all stamp or other
              similar taxes and duties levied in connection with issuance of the
              Shares pursuant hereto.

       VVVVV. Specific Enforcement, Consent to Jurisdiction.

              1.     The remedies provided in this Agreement and the
                     Registration Rights Agreement shall be cumulative and in
                     addition to all other remedies available under this
                     Agreement and the Registration Rights Agreement, at law or
                     in equity (including a decree of specific
<PAGE>

                     performance and/or other injunctive relief), no remedy
                     contained herein shall be deemed a waiver of compliance
                     with the provisions giving rise to such remedy and nothing
                     herein shall limit a Purchaser's right to pursue actual
                     damages for any failure by the Company to comply with the
                     terms of this Agreement or the Registration Rights
                     Agreement. Amounts set forth or provided for herein and
                     therein with respect to payments, conversion and the like
                     (and the computation thereof) shall be the amounts to be
                     received by the Purchasers thereof and shall not, except as
                     expressly provided herein, be subject to any other
                     obligation of the Company (or the performance thereof). The
                     Company acknowledges that a breach by it of its obligations
                     hereunder and thereunder will cause irreparable harm to the
                     holders of the Common Shares and Warrants that the remedy
                     at law for any such breach may be inadequate. The Company
                     therefore agrees that, in the event of any such breach or
                     threatened breach, the holders of the Common Shares and
                     Warrants shall be entitled, in addition to all other
                     available remedies, to an injunction restraining any
                     breach, without the necessity of showing economic loss and
                     without any bond or other security being required.

              2.     Each of the Company and the Purchasers (i) hereby
                     irrevocably submits to the jurisdiction of the United
                     States District Court sitting in the Southern District of
                     New York and the courts of the State of New York located in
                     New York county for the purposes of any suit, action or
                     proceeding arising out of or relating to this Agreement or
                     any of the other Transaction Documents or the transactions
                     contemplated hereunder or thereunder and (ii) hereby
                     waives, and agrees not to assert in any such suit, action
                     or proceeding, any claim that it is not personally subject
                     to the jurisdiction of such court, that the suit, action or
                     proceeding is brought in an inconvenient forum or that the
                     venue of the suit, action or proceeding is improper. Each
                     of the Company and the Purchasers consents to process being
                     served in any such suit, action or proceeding by mailing a
                     copy thereof to such party at the address in effect for
                     notices to it under this Agreement and agrees that such
                     service shall constitute good and sufficient service of
                     process and notice thereof. Nothing in this Section 9.2
                     shall affect or limit any right to serve process in any
                     other manner permitted by law.

       WWWWW. Entire Agreement; Amendment. This Agreement contains the entire
              understanding and agreement of the parties with respect to the
              matters covered hereby and, except as specifically set forth
              herein or in the Transaction Documents, neither the Company nor
              any of the Purchasers makes any representations, warranty,
              covenant or undertaking with respect to such matters, and they
              supersede all prior understandings and agreements with respect to
              said subject matter, all of which are merged herein. No provision
              of this Agreement may be waived or amended other than by a written
              instrument signed by the
<PAGE>

              Company and the Purchasers of at least two-thirds (2/3) of the
              Common Shares then outstanding, and no provision hereof may be
              waived other than by a written instrument signed by the party
              against whom enforcement of any such amendment or waiver is
              sought. No such amendment shall be effective to the extent that it
              applies to less than all of the holders of the Common Shares then
              outstanding. No consideration shall be offered or paid to any
              person to amend or consent to a waiver or modification of any
              provision of any of the Transaction Documents unless the same
              consideration is also offered to all of the parties to the
              Transaction Documents or holders of Common Shares, as the case may
              be.

       XXXXX. Notices. Any notice, demand, request, waiver or other
              communication required or permitted to be given hereunder shall be
              in writing and shall be effective (a) upon hand delivery by telex
              (with correct answer back received), telecopy or facsimile at the
              address or number designated below (if delivered on a business day
              during normal business hours where such notice is to be received),
              or the first business day following such delivery (if delivered
              other than on a business day during normal business hours where
              such notice is to be received) or (b) on the second business day
              following the date of mailing by express courier service, fully
              prepaid, addressed to such address, or upon actual receipt of such
              mailing, whichever shall first occur. The addresses for such
              communications shall be:

If to the Company:        Virtual Communities, Inc.
                          589 8th Avenue, 7th Floor
                          New York, NY  10018
                          Attn.: Avi Moskowitz
                          Tel.: (212) 931-8600
                          Fax:  (212) 214-0550

                          with copies to:

                          Wuersch & Gering LLP
                          11 Hanover Square, 21st Floor
                          New York, NY 10005
                          Attn:  Travis Gering, Esq.
                          Telephone No.:  (212) 509-5050
                          Facsimile No.:  (212) 509-9559

If to any Purchaser:
                          At the address of such Purchaser as set forth on
                          Exhibit A to this Agreement, with copies as
                          specified in writing by such Purchaser and with copies
                          to:

                          with copies to:

                          Parker Chapin LLP
                          The Chrysler Building
                          405 Lexington Avenue
<PAGE>

                          New York, New York 10174
                          Attn: Christopher S. Auguste, Esq.
                          Tel.: (212) 704-6000
                          Fax: (212) 704-6288

Any party hereto may from time to time change its address for notices by giving
at least ten (10) days written notice of such changed address to the other party
hereto.

       YYYYY. Waivers. No waiver by either party of any default with respect to
              any provision, condition or requirement of this Agreement shall be
              deemed to be a continuing waiver in the future or a waiver of any
              other provisions, condition or requirement hereof, nor shall any
              delay or omission of any party to exercise any right hereunder in
              any manner impair the exercise of any such right accruing to it
              thereafter.

       ZZZZZ. Headings. The article, section and subsection headings in this
              Agreement are for convenience only and shall not constitute a part
              of this Agreement for any other purpose and shall not be deemed to
              limit or affect any of the provisions hereof.

        AAAAAA. Successors and Assigns. This Agreement shall be binding upon and
                inure to the benefit of the parties and their successors and
                assigns. After each Closing, the assignment by a party to this
                Agreement of any rights hereunder shall not affect the
                obligations of such party under this Agreement.

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

        CCCCCC. Governing Law. This Agreement shall be governed by and construed
                in accordance with the internal laws of the State of New York,
                without giving effect to the choice of law provisions. This
                Agreement shall not be interpreted or construed with any
                presumption against the party causing this Agreement to be
                drafted.

        DDDDDD. Survival. The representations and warranties of the Company and
                the Purchasers contained in: (i) Sections 2.1(o) and (s) shall
                survive indefinitely and (ii)those contained in Article II, with
                the exception of Sections 2.1(o) and (s), shall survive the
                execution and delivery hereof and the applicable Closing until
                the date three (3) years from the Closing Date; and (iii) the
                agreements and covenants set forth in Articles I, III, V, VII,
                VIII and IX of this Agreement shall survive the execution and
                delivery hereof and any Closing hereunder, as applicable, until
                the Purchasers in the aggregate beneficially own (determined in
                accordance with Rule 13d-3 under the Exchange Act) less than 2%
                of the total combined voting power of all voting securities then
                outstanding, provided, that Sections 3.1, 3.2, 3.4, 3.7, 3.8,
                3.9, 3.10 and 3.12 shall not expire until the Registration
                Statement required by Section 2 of the Registration Rights
                Agreement is no longer required to be effective under the terms
                and conditions of Registration Rights Agreement.
<PAGE>

        EEEEEE. Counterparts. This Agreement may be executed in any number of
                counterparts, all of which taken together shall constitute one
                and the same instrument and shall become effective when
                counterparts have been signed by each party and delivered to the
                other parties hereto, it being understood that all parties need
                not sign the same counterpart. In the event any signature is
                delivered by facsimile transmission, the party using such means
                of delivery shall cause four (4) additional executed signature
                pages to be physically delivered to the other parties within
                five (5) days of the execution and delivery hereof.

        FFFFFF. Publicity. The Company agrees that it will not disclose, and
                will not include in any public announcement, the name of the
                Purchasers, unless and until such disclosure is required by law
                or applicable regulation, and then only to the extent of such
                requirement. In addition to the foregoing, any disclosure of the
                name of the Purchasers shall be subject to review and comment by
                the Purchasers prior to disclosure.

        GGGGGG. Severability. The provisions of this Agreement and the
                Registration Rights Agreement are severable and, in the event
                that any court of competent jurisdiction shall determine that
                any one or more of the provisions or part of the provisions
                contained in this Agreement or the Registration Rights Agreement
                shall, for any reason, be held to be invalid, illegal or
                unenforceable in any respect, such invalidity, illegality or
                unenforceability shall not affect any other provision or part of
                a provision of this Agreement or the Registration Rights
                Agreement shall be reformed and construed as if such invalid or
                illegal or unenforceable provision, or part of such provision,
                had never been contained herein, so that such provisions would
                be valid, legal and enforceable to the maximum extent possible.

        HHHHHH. Further Assurances. From and after the date of this Agreement,
                upon the request of any Purchaser or the Company, each of the
                Company and the Purchasers shall execute and deliver such
                instruments, documents and other writings as may be reasonably
                necessary or desirable to confirm and carry out and to
                effectuate fully the intent and purposes of this Agreement, the
                Common Shares, the Warrants, the Warrant Shares, and the
                Registration Rights Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorize officer as of the date first above
written.

                                            VIRTUAL COMMUNITIES, INC.

                                            By:
                                                --------------------------------

                                                         Name:
                                                         Title:

                                            MAGELLAN INTERNATIONAL, LTD.

                                            By:
                                                --------------------------------

                                                         Name:
                                                         Title:

                                            ASPEN INTERNATIONAL, LTD.
<PAGE>

                                            By:
                                                --------------------------------

                                                                  Name:
                                                                  Title:

                                            ACQUA WELLINGTON VALUE FUND,  LTD.

                                            By:
                                                --------------------------------

                                                Name:  Anthony L.M. Inder Rieden
                                                Title:

                                            THE CUTTYHUNK FUND LIMITED

                                            By:
                                               ---------------------------------
<PAGE>

                                                         Name:

                                                         Title:

                                EXHIBIT A to the
                  COMMON STOCK AND WARRANTS PURCHASE AGREEMENT

                            VIRTUAL COMMUNITIES, INC.

                                   Number of Common Shares
List of Purchasers                 and Warrants                 Purchase Price
------------------                 -----------------------      --------------

Magellan International, Ltd.       Common Shares: 86,300        $500,000
Charlotte House                    Warrants:
Charlotte Street                      A:  21,575
Nassau, Bahamas                       B:  63,333
Tel. no.: 242-323-8884
Fax no.: 242-323-7918
Attn: Anthony L.M. Inder Rieden

Aspen International, Ltd.          Common Shares: 86,300        $500,000
Charlotte House                    Warrants:
Charlotte Street                      A:  21,575:
Nassau, Bahamas                       B:  63,333
Tel. no.: 242-323-8884
Fax no.: 242-323-7918
Attn: Anthony L.M. Inder Rieden

Acqua Wellington Value Fund Ltd.   Common Shares: 86,300        $500,000
c/o MeesPierson Fund Services      Warrants:
  (Bahamas) Limited                   A:  21,575
Montague Sterling Centre              B:  63,333
P.O. Box SS-6238
East Bay Street
Nassau, Bahamas
Tel. no.: 242-394-2700
Fax no.: 242-394-8348
Attn:  Anthony L.M. Inder Rieden
<PAGE>

The Cuttyhunk Fund Limited         Common Shares:  258,900      $1,500,000
c/o Optima Fund Management         Warrants:
1285 Avenue of Americas               A:  64,725
New York, NY 10019                    B:  250,000
Tel. no.: 212-484-3040
Fax no.: 212-484-3001
Attn:  Geoffrey Lewis<PAGE>

                                                                  Exhibit 10(48)

                                FORM OF B WARRANT

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE EXERCISED BY OR ON
BEHALF OF ANY U.S. PERSON, OR SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS IN ACCORDANCE WITH REGULATION S OF
THE ACT, REGISTERED UNDER THAT ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
VIRTUAL COMMUNITIES, INC. (THE "COMPANY") SHALL HAVE RECEIVED AN OPINION, IN
FORM, SCOPE AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY, OF COUNSEL WHO
IS REASONABLY ACCEPTABLE TO THE COMPANY THAT REGISTRATION OF SUCH SECURITIES
UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE FEDERAL AND
STATE SECURITIES LAWS IS NOT REQUIRED.

                              WARRANT B TO PURCHASE

                             SHARES OF COMMON STOCK

                                       OF

                            VIRTUAL COMMUNITIES, INC.

No.: W-__                                                Number of Shares: _____
Date of Issuance:  April __, 2000

     FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Virtual Communities, Inc., a Delaware corporation (together with
its successors and assigns, the "Issuer"), hereby certifies that
___________________ or its registered assigns is entitled to subscribe for and
purchase, during the period specified in this Warrant, up to _____ shares
(subject to adjustment as hereinafter provided) of the duly authorized, validly
issued, fully paid and non-assessable Common Stock of the Issuer, at an exercise
price per share equal to the Warrant Price then in effect, subject, however, to
the provisions and upon the terms and conditions hereinafter set forth.
Capitalized terms used in this Warrant and not otherwise defined herein shall
have the respective meanings specified in Section 9 hereof.
<PAGE>

Term. The right to subscribe for and purchase shares of Warrant Stock
      represented hereby shall commence on the Original Issue Date and shall
      expire at 5:00 p.m., eastern time, on the four (4) month anniversary date
      of the Effectiveness Date (such period being the "Term").

Method of Exercise Payment; Issuance of New Warrant; Transfer and Exchange.

        IIIIII. Time of Exercise. The purchase rights represented by this
                Warrant may be exercised in whole or in part at any time and
                from time to time during the Term.

        JJJJJJ. Method of Exercise. The Holder hereof may exercise this Warrant,
                in whole or in part, by the surrender of this Warrant (with the
                exercise form attached hereto duly executed) at the principal
                office of the Issuer, and by the payment to the Issuer of an
                amount of consideration therefor equal to the Warrant Price in
                effect on the date of such exercise multiplied by the number of
                shares of Warrant Stock with respect to which this Warrant is
                then being exercised, payable at such Holder's election by
                certified or official bank check

        KKKKKK. Issuance of Stock Certificates. In the event of any exercise of
                the rights represented by this Warrant in accordance with and
                subject to the terms and conditions hereof, 1. certificates for
                the shares of Warrant Stock so purchased shall be dated the date
                of such exercise and delivered to the Holder hereof within a
                reasonable time, not exceeding three (3) Trading Days after such
                exercise, and the Holder hereof shall be deemed for all purposes
                to be the Holder of the shares of Warrant Stock so purchased as
                of the date of such exercise, and 2. unless this Warrant has
                expired, a new Warrant representing the number of shares of
                Warrant Stock, if any, with respect to which this Warrant shall
                not then have been exercised (less any amount thereof which
                shall have been canceled in payment or partial payment of the
                Warrant Price as hereinabove provided) shall also be issued to
                the Holder hereof at the Issuer's expense within such time.

        LLLLLL. Transferability of Warrant. Subject to Section 2(e), this
                Warrant may be transferred by a Holder without the consent of
                the Issuer. If transferred pursuant to this subsection and
                subject to the provisions of subsection (e) of this Section 2,
                this Warrant may be transferred on the books of the Issuer by
                the Holder hereof in person or by duly authorized attorney, upon
                surrender of this Warrant at the principal office of the Issuer,
                properly endorsed (by the Holder executing an assignment in the
                form attached hereto) and upon payment of any necessary transfer
                tax imposed upon such transfer. This Warrant is exchangeable at
                the principal office of the Issuer for Warrants for the purchase
                of the same aggregate number of shares of Warrant Stock, each
                new Warrant to represent the right to purchase such number of
                shares of Warrant Stock as the Holder hereof shall designate at
                the time of such exchange. All Warrants issued on transfers or
                exchanges shall be dated the Original Issue Date and shall be
                identical with this Warrant except as to the number of shares of
                Warrant Stock issuable pursuant hereto.

        MMMMMM. Compliance with Securities Laws.

                1.      The Holder of this Warrant, by acceptance hereof,
                        acknowledges that this Warrant or the shares of Warrant
                        Stock to be issued upon exercise hereof are being
                        acquired solely for the Holder's own account and not as
                        a nominee for any other party, and for investment, and
                        that the Holder will not offer, sell or otherwise
                        dispose of this Warrant or any shares of
<PAGE>

                        Warrant Stock to be issued upon exercise hereof except
                        pursuant to an effective registration statement, or an
                        exemption from registration, under the Securities Act
                        and any applicable state securities laws.

                2.      Except as provided in paragraph (iii) below, this
                        Warrant and all certificates representing shares of
                        Warrant Stock issued upon exercise hereof shall be
                        stamped or imprinted with a legend in substantially the
                        following form:

                THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON
                EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
                ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR STATE
                SECURITIES LAWS AND MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY
                U.S. PERSON, OR SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
                HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS IN ACCORDANCE WITH
                REGULATION S OF THE ACT, REGISTERED UNDER THAT ACT AND UNDER
                APPLICABLE STATE SECURITIES LAWS OR VIRTUAL COMMUNITIES, INC.
                (THE "COMPANY") SHALL HAVE RECEIVED AN OPINION, IN FORM, SCOPE
                AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY, OF COUNSEL
                WHO IS REASONABLY ACCEPTABLE TO THE COMPANY THAT REGISTRATION OF
                SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
                PROVISIONS OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS IS
                NOT REQUIRED.

                3.      The restrictions imposed by this subsection (e) upon the
                        transfer of this Warrant or the shares of Warrant Stock
                        to be purchased upon exercise hereof shall terminate (A)
                        when such securities shall have been resold pursuant to
                        being effectively registered under the Securities Act,
                        (B) upon the Issuer's receipt of an opinion of counsel,
                        in form and substance reasonably satisfactory to the
                        Issuer, addressed to the Issuer to the effect that such
                        restrictions are no longer required to ensure compliance
                        with the Securities Act and state securities laws or (C)
                        upon the Issuer's receipt of other evidence reasonably
                        satisfactory to the Issuer that such registration and
                        qualification under state securities laws is not
                        required. Whenever such restrictions shall cease and
                        terminate as to any such securities, the Holder thereof
                        shall be entitled to receive from the Issuer (or its
                        transfer agent and registrar), without expense (other
                        than applicable transfer taxes, if any), new Warrants
                        (or, in the case of shares of Warrant Stock, new stock
                        certificates) of like tenor not bearing the applicable
                        legend required by paragraph (ii) above relating to the
                        Securities Act and applicable state securities laws.

        NNNNNN. Continuing Rights of Holder. The Issuer will, at the time of or
                at any time after each exercise of this Warrant, upon the
                request of the Holder hereof, acknowledge in writing the extent,
                if any, of its continuing obligation to afford to such Holder
                all rights
<PAGE>

                to which such Holder shall continue to be entitled after such
                exercise in accordance with the terms of this Warrant; provided
                that if any such Holder shall fail to make any such request, the
                failure shall not affect the continuing obligation of the Issuer
                to afford such rights to such Holder.

Stock Fully Paid: Reservation and Listing of Shares: Covenants.

        OOOOOO. Stock Fully Paid. The Issuer represents, warrants, covenants and
                agrees that all shares of Warrant Stock which may be issued upon
                the exercise of this Warrant or otherwise hereunder will, upon
                issuance, be duly authorized, validly issued, fully paid and
                non-assessable and free from all taxes and liens, security
                interest, charges and encumbrances of any nature whatsoever
                created by or through the Issuer. The Issuer further represents,
                warrants, covenants and agrees that during the period within
                which this Warrant may be exercised, the Issuer will at all
                times have authorized and reserved for the purpose of the issue
                upon exercise of this Warrant a sufficient number of shares of
                Common Stock to provide for the exercise of this Warrant.

     (v) Reservation. If any shares of Common Stock required to be reserved for
issuance upon exercise of this Warrant or as otherwise provided hereunder
require registration or qualification with any governmental authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible at its expense to
cause such shares to be duly registered or qualified. If the Issuer shall list
any shares of Common Stock on any securities exchange or market it will, at its
expense, list thereon, maintain and increase when necessary such listing, of,
all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under
the applicable securities exchange rules, all unissued shares of Warrant Stock
which are at any time issuable hereunder, so long as any shares of Common Stock
shall be so listed. The Issuer will also so list on each securities exchange or
market, and will maintain such listing of, any other securities which the Holder
of this Warrant shall be entitled to receive upon the exercise of this Warrant
if at the time any securities of the same class shall be listed on such
securities exchange or market by the Issuer.

     (w) Covenants. The Issuer shall not by any action including, without
limitation, amending the Certificate of Incorporation or the by-laws of the
Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms or provisions of
this Warrant, but will at all times in good faith carry out all such terms or
provisions and take all such actions as may be necessary or appropriate to
protect the rights of the Holder hereof against dilution (to the extent
specifically provided herein) or impairment. Without limiting the generality of
the foregoing, the Issuer will (i) not permit the par value, if any, of its
Common Stock to exceed the then effective Warrant Price, (ii) not amend or
modify any provision of the Certificate of Incorporation or by-laws of the
Issuer in any manner that would adversely affect in any way the powers,
preferences or relative participating, optional or other special rights of the
Common Stock or which would adversely affect the rights of the Holders of the
Warrants, (iii) take all such action as may be reasonably necessary in order
that the Issuer may validly and legally issue fully paid and nonassessable
shares of Common Stock, free and clear of any liens, security interests,
charges, claims, encumbrances and restrictions (other than as provided herein)
upon the exercise of this Warrant, and (iv) obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Issuer to perform its obligations
under this Warrant.
<PAGE>

     (x) Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership of and the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of such
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Common Stock.

     (y) Rights and Obligations under the Registration Rights Agreement. The
shares of Warrant Stock are entitled to the benefits and subject to the terms of
the Registration Rights Agreement dated as of even date herewith between the
Issuer and the Holders listed on the signature pages thereof (as amended from
time to time, the "Registration Rights Agreement"). The Issuer shall keep or
cause to be kept a copy of the Registration Rights Agreement, and any amendments
thereto, at its chief executive office and shall furnish, without charge, copies
thereof to the Holder upon request.

Adjustment of Warrant Price and Warrant Share Number. The number and kind of
     Securities purchasable upon the exercise of this Warrant and the Warrant
     Price shall be subject to adjustment from time to time upon the happening
     of certain events as follows:

     (z)  Recapitalization, Reorganization, Reclassification, Consolidation,
          Merger or Sale.

          1.   In case the Issuer after the Original Issue Date shall do any of
               the following (each, a "Triggering Event"): (a) consolidate with
               or merge into any other Person and the Issuer shall not be the
               continuing or surviving Person of such consolidation or merger,
               or (b) permit any other Person to consolidate with or merge into
               the Issuer and the Issuer shall be the continuing or surviving
               Person but, in connection with such consolidation or merger, any
               Capital Stock of the Issuer shall be changed into or exchanged
               for Securities of any other Person or cash or any other property,
               or (c) transfer all or substantially all of its properties or
               assets to any other Person, or (d) effect a capital
               reorganization or reclassification of its Capital Stock, then,
               and in the case of each such Triggering Event, proper provision
               shall be made so that, upon the basis and the terms and in the
               manner provided in this Warrant, the Holder of this Warrant shall
               be entitled, at the option of such Holder, (x) upon the exercise
               hereof at any time after the consummation of such Triggering
               Event, to the extent this Warrant is not exercised prior to such
               Triggering Event, to receive at the Warrant Price in effect at
               the time immediately prior to the consummation of such Triggering
               Event in lieu of the Common Stock issuable upon such exercise of
               this Warrant prior to such Triggering Event, the Securities, cash
               and property to which such Holder would have been entitled upon
               the consummation of such Triggering Event if such Holder had
               exercised the rights represented by this Warrant immediately
               prior thereto, subject to adjustments (subsequent to such
               corporate action) as nearly equivalent as possible to the
               adjustments provided for in Section 4 hereof or (y) to sell this
               Warrant (or, at such Holder's election, a portion hereof)
               concurrently with the Triggering Event to the Person continuing
               after or surviving such Triggering Event, or to the Issuer (if
               Issuer is the continuing or surviving Person) at a sales price
               equal to the amount of cash, property and/or Securities to which
               a holder of the number of shares of Common Stock
<PAGE>

               which would otherwise have been delivered upon the exercise of
               this Warrant would have been entitled upon the effective date or
               closing of any such Triggering Event (the "Event Consideration"),
               less the amount or portion of such Event Consideration having a
               fair value equal to the aggregate Warrant Price applicable to
               this Warrant or the portion hereof so sold.

          2.   Notwithstanding anything contained in this Warrant to the
               contrary, the Issuer will not effect any Triggering Event unless,
               prior to the consummation thereof, each Person (other than the
               Issuer) which may be required to deliver any Securities, cash or
               property upon the exercise of this Warrant as provided herein
               shall assume, by written instrument delivered to, and reasonably
               satisfactory to, the Holder of this Warrant, (A) the obligations
               of the Issuer under this Warrant (and if the Issuer shall survive
               the consummation of such Triggering Event, such assumption shall
               be in addition to, and shall not release the Issuer from, any
               continuing obligations of the Issuer under this Warrant) and (B)
               the obligation to deliver to such Holder such shares of
               Securities, cash or property as, in accordance with the foregoing
               provisions of this subsection (a), such Holder shall be entitled
               to receive, and such Person shall have similarly delivered to
               such Holder an opinion of counsel for such Person, which counsel
               shall be reasonably satisfactory to such Holder, stating that
               this Warrant shall thereafter continue in full force and effect
               and the terms hereof (including, without limitation, all of the
               provisions of this subsection (a)) shall be applicable to the
               Securities, cash or property which such Person may be required to
               deliver upon any exercise of this Warrant or the exercise of any
               rights pursuant hereto.

          3.   If with respect to any Triggering Event, the Holder of this
               Warrant has exercised its right as provided in clause (y) of
               subparagraph (i) of this subsection (a) to sell this Warrant or a
               portion thereof, the Issuer agrees that as a condition to the
               consummation of any such Triggering Event the Issuer shall secure
               such right of Holder to sell this Warrant to the Person
               continuing after or surviving such Triggering Event and the
               Issuer shall not effect any such Triggering Event unless upon or
               prior to the consummation thereof the amounts of cash, property
               and/or Securities required under such clause (y) are delivered to
               the Holder of this Warrant. The obligation of the Issuer to
               secure such right of the Holder to sell this Warrant shall be
               subject to such Holder's cooperation with the Issuer, including,
               without limitation, the giving of reasonable and customary
               representations and warranties to the purchaser in connection
               with any such sale. Prior notice of any Triggering Event shall be
               given to the Holder of this Warrant in accordance with Section 13
               hereof.

     (aa) Subdivision or Combination of Shares. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common
Stock, (i) in case of subdivision of shares, the Warrant Price shall be
proportionately reduced (as at the effective date of such subdivision or, if the
Issuer shall take a record of holders of its Common Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of
<PAGE>

shares of Common Stock outstanding as a result of such subdivision, or (ii) in
the case of a combination of shares, the Warrant Price shall be proportionately
increased (as at the effective date of such combination or, if the Issuer shall
take a record of holders of its Common Stock for the purpose of so combining, as
at the applicable record date, whichever is earlier) to reflect the reduction in
the total number of shares of Common Stock outstanding as a result of such
combination.

     (bb) Certain Dividends and Distributions. If the Issuer, at any time while
this Warrant is outstanding, shall:

          4.   Stock Dividends. Pay a dividend in, or make any other
               distribution to its stockholders (without consideration therefor)
               of, shares of Common Stock, the Warrant Price shall be adjusted,
               as at the date the Issuer shall take a record of the holders of
               the Issuer's Capital Stock for the purpose of receiving such
               dividend or other distribution (or if no such record is taken, as
               at the date of such payment or other distribution), to that price
               determined by multiplying the Warrant Price in effect immediately
               prior to such record date (or if no such record is taken, then
               immediately prior to such payment or other distribution), by a
               fraction (1) the numerator of which shall be the total number of
               shares of Common Stock outstanding immediately prior to such
               dividend or distribution, and (2) the denominator of which shall
               be the total number of shares of Common Stock outstanding
               immediately after such dividend or distribution (plus in the
               event that the Issuer paid cash for fractional shares, the number
               of additional shares which would have been outstanding had the
               Issuer issued fractional shares in connection with said
               dividends); or

          5.   Other Dividends. Pay a dividend on, or make any distribution of
               its assets upon or with respect to (including, but not limited
               to, a distribution of its property as a dividend in liquidation
               or partial liquidation or by way of return of capital), the
               Common Stock (other than as described in clause (i) of this
               subsection (c)), or in the event that the Company shall offer
               options or rights to subscribe for shares of Common Stock, or
               issue any Common Stock Equivalents, to all of its holders of
               Common Stock, then on the record date for such payment,
               distribution or offer or, in the absence of a record date, on the
               date of such payment, distribution or offer, the Holder shall
               receive what the Holder would have received had it exercised this
               Warrant in full immediately prior to the record date of such
               payment, distribution or offer or, in the absence of a record
               date, immediately prior to the date of such payment, distribution
               or offer.

PPPPPP.  Intentionally Omitted.

QQQQQQ.  Intentionally Omitted.

RRRRRR.  Intentionally Omitted.

SSSSSS.  Intentionally Omitted.
<PAGE>

     (cc) Other Action Affecting Common Stock. In case after the Original Issue
Date the Issuer shall take any action affecting its Common Stock, other than an
action described in any of the foregoing subsections (a) through (c) of this
Section 4, inclusive, and the failure to make any adjustment would not fairly
protect the purchase rights represented by this Warrant in accordance with the
essential intent and principle of this Section 4, then the Warrant Price shall
be adjusted in such manner and at such time as the Board may in good faith
determine to be equitable in the circumstances.

     (dd) Other Adjustments of Warrant Price. If on the three (3) month
anniversary date of the Effectiveness Date, the Per Share Market Value of the
Common Stock is less than the Purchase Price of the Common Stock, then,
notwithstanding any redemption of this Warrant pursuant to Section 8 hereof, the
Warrant Price shall be adjusted to $.01 per share with respect to the number of
shares of Warrant Stock determined by multiplying the number of Purchased Shares
by a fraction:

               a)   the numerator of which shall be equal to the difference of
                    (x) the Purchase Price minus (y) the Per Share Market Value
                    then in effect, and

               b)   the denominator of which shall be equal to the Per Share
                    Market Value then in effect.

     (ee) Adjustment of Warrant Share Number. Upon each adjustment in the
Warrant Price pursuant to any of the foregoing provisions of this Section 4
(other than pursuant to subsection (i) of this Section 4), the Warrant Share
Number shall be adjusted, to the nearest one hundredth of a whole share, to the
product obtained by multiplying the Warrant Share Number immediately prior to
such adjustment in the Warrant Price by a fraction, the numerator of which shall
be the Warrant Price immediately before giving effect to such adjustment and the
denominator of which shall be the Warrant Price immediately after giving effect
to such adjustment. If the Issuer shall be in default under any provision
contained in Section 3 of this Warrant so that shares issued at the Warrant
Price adjusted in accordance with this Section 4 would not be validly issued,
the adjustment of the Warrant Share Number provided for in the foregoing
sentence shall nonetheless be made and the Holder of this Warrant shall be
entitled to purchase such greater number of shares at the lowest price at which
such shares may then be validly issued under applicable law. Such exercise shall
not constitute a waiver of any claim arising against the Issuer by reason of its
default under Section 3 of this Warrant.

     (ff) Form of Warrant after Adjustments. The form of this Warrant need not
be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.

Notice of Adjustments. Whenever the Warrant Price or Warrant Share Number shall
     be adjusted pursuant to Section 4 hereof (for purposes of this Section 5,
     each an "adjustment"), the Issuer shall cause its Chief Financial Officer
     to prepare and execute a certificate setting forth, in reasonable detail,
     the event requiring the adjustment, the amount of the adjustment, the
     method by which such adjustment was calculated (including a description of
     the basis on which the Board made any determination hereunder), and the
     Warrant Price and Warrant Share Number after giving effect to such
     adjustment, and shall cause copies of such certificate to be delivered to
     the Holder of this Warrant promptly after each adjustment. Any dispute
     between the Issuer and the Holder of this Warrant with respect to the
     matters set forth in such certificate may at the option of the Holder of
     this Warrant be submitted to one of the national accounting firms currently
     known as the "big five" selected by the Holder, provided that the Issuer
     shall have ten (10) days after receipt of notice from such Holder of its
     selection of such firm to object thereto, in which case such Holder shall
     select another such firm and the Issuer shall have no such right of
<PAGE>

     objection. The firm selected by the Holder of this Warrant as provided in
     the preceding sentence shall be instructed to deliver a written opinion as
     to such matters to the Issuer and such Holder within thirty (30) days after
     submission to it of such dispute. Such opinion shall be final and binding
     on the parties hereto. The fees and expenses of such accounting firm shall
     be paid by the Issuer.

Fractional Shares. No fractional shares of Warrant Stock will be issued in
     connection with and exercise hereof, but in lieu of such fractional shares,
     the Issuer shall make a cash payment therefor equal in amount to the
     product of the applicable fraction multiplied by the Per Share Market Value
     then in effect.

Intentionally Omitted.

Redemption. On or after the Original Issue Date, the Issuer may redeem all or a
     portion of this Warrant which is outstanding upon five (5) days prior
     written notice (the "Redemption Notice") at a price per share of Warrant
     Stock equal to $0.75 (the "Redemption Price"); provided; however, that
     beginning on the three (3) month anniversary date of the Effectiveness
     Date, the Redemption Price shall be reduced by $0.25 for the first month
     and by $.05 for each month thereafter. Notwithstanding anything to the
     contrary contained herein, the minimum Redemption Price shall be equal to
     $0.25 per share. The Redemption Notice shall state the date of redemption
     which date shall be the sixth (6th) day after the Issuer has delivered the
     Redemption Notice (the "Redemption Date"), the Redemption Price and the
     number of shares of Warrant Stock to be redeemed by the Company. The Issuer
     shall not send a Redemption Notice unless it has good and clear funds for a
     minimum of the amount it intends to redeem in a bank account controlled by
     the Issuer. The Issuer shall deliver the Redemption Price to each Holder
     within three (3) business days after the Issuer has delivered the
     Redemption Notice against receipt. If the Issuer fails to pay the
     Redemption Price by the sixth (6th) business day after the Issuer has
     delivered the Redemption Notice, the redemption will be declared null and
     void and the Issuer shall lose its right to serve a Redemption Notice in
     the future.

Definitions. For the purposes of this Warrant, the following terms have the
     following meanings:

"A Warrants" means the non-callable A Warrants issued in connection with the
sale and issuance of Common Stock pursuant to the Purchase Agreement.

"Additional Shares of Common Stock" means all shares of Common Stock issued by
the Issuer after the Original Issue Date, and all shares of Other Common, if
any, issued by the Issuer after the Original Issue Date, except the Warrant
Stock and the shares of Common Stock issued upon exercise of the A Warrants and
the Callable Warrants.

"Board" shall mean the Board of Directors of the Issuer.

"Callable Warrants" means the callable warrant issued in connection with the
sale and issuance of Common Stock pursuant to the Purchase Agreement.

"Capital Stock" means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or limited) in
any Person which is a partnership, (iii) all membership interests or limited
liability company interests in any limited liability company, and (iv) all
equity or ownership interests in any Person of any other type.

"Certificate of Incorporation" means the Certificate of Incorporation, as
amended, of the Issuer as in effect on the Original Issue Date, and as hereafter
from time to time amended, modified, supplemented or restated in accordance with
the terms hereof and thereof and pursuant to applicable law.

"Common Stock" means the Common Stock, $.01 par value, of the Issuer and any
other Capital Stock into which such stock may hereafter be changed.

"Common Stock Equivalent" means any Convertible Security or warrant, option or
other right to subscribe for or purchase any Additional Shares of Common Stock
or any Convertible Security.
<PAGE>

"Convertible Securities" means evidences of Indebtedness, shares of Capital
Stock or other Securities which are or may be at any time convertible into or
exchangeable for Additional Shares of Common Stock. The term "Convertible
Security" means one of the Convertible Securities.

"Effectiveness Date" means the date of effectiveness of the Registration
Statement (as defined in the Registration Rights Agreement) filed pursuant to
the Registration Rights Agreement.

"Governmental Authority" means any governmental, regulatory or self-regulatory
entity, department, body, official, authority, commission, board, agency or
instrumentality, whether federal, state or local, and whether domestic or
foreign.

"Holders" mean the Persons who shall from time to time own any Warrant. The term
"Holder" means one of the Holders.

"Independent Appraiser" means a nationally recognized or major regional
investment banking firm or firm of independent certified public accountants of
recognized standing (which may be the firm that regularly examines the financial
statements of the Issuer) that is regularly engaged in the business of
appraising the Capital Stock or assets of corporations or other entities as
going concerns, and which is not affiliated with either the Issuer or the Holder
of any Warrant.

"Issuer" means Virtual Communities, Inc., a Delaware corporation, and its
successors.

"Majority Holders" means at any time the Holders of Warrants exercisable for a
majority of the shares of Warrant Stock issuable under the Warrants at the time
outstanding.

"Original Issue Date" means April __, 2000.

"Other Common" means any other Capital Stock of the Issuer of any class which
shall be authorized at any time after the date of this Warrant (other than
Common Stock) and which shall have the right to participate in the distribution
of earnings and assets of the Issuer without limitation as to amount.

"OTC Bulletin Board" means the over-the-counter electronic bulletin board.

"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.

"Per Share Market Value" means on any particular date (a) the closing bid price
per share of the Common Stock on such date the Nasdaq SmallCap Market, Nasdaq
National Market or other registered national stock exchange on which the Common
Stock is then listed or if there is no such price on such date, then the closing
bid price on such exchange or quotation system on the date nearest preceding
such date, or (b) if the Common Stock is not listed then on the Nasdaq SmallCap
Market, Nasdaq National Market or any registered national stock exchange, the
closing bid price for a share of Common Stock in the over-the-counter market, as
reported by NASDAQ or in the National Quotation Bureau Incorporated or similar
organization or agency succeeding to its functions of reporting prices) at the
close of business on such date, or (c) if the Common Stock is not then reported
by NASDAQ the National Quotation Bureau Incorporated (or similar organization or
agency succeeding to its functions of
<PAGE>

reporting prices), then the average of the "Pink Sheet" quotes for the relevant
conversion period, as determined in good faith by the holder, or (d) if the
Common Stock is not then publicly traded the fair market value of a share of
Common Stock as determined by an Independent Appraiser selected in good faith by
the Majority Holders; provided, however, that the Issuer, after receipt of the
determination by such Independent Appraiser, shall have the right to select an
additional Independent Appraiser, in which case, the fair market value shall be
equal to the average of the determinations by each such Independent Appraiser;
and provided, further that all determinations of the Per Share Market Value
shall be appropriately adjusted for any stock dividends, stock splits or other
similar transactions during such period. The determination of fair market value
by an Independent Appraiser shall be based upon the fair market value of the
Issuer determined on a going concern basis as between a willing buyer and a
willing seller and taking into account all relevant factors determinative of
value, and shall be final and binding on all parties. In determining the fair
market value of any shares of Common Stock, no consideration shall be given to
any restrictions on transfer of the Common Stock imposed by agreement or by
federal or state securities laws, or to the existence or absence of, or any
limitations on, voting rights.

"Purchase Agreement" means the Common Stock and Warrants Purchase Agreement
dated as of March 31, 2000 among the Issuer and the investors a party thereto.

"Purchase Price" means $5.79375 per share.

"Purchased Shares" means the total number of shares of Common Stock purchased by
the initial Holder of this Warrant pursuant to the Purchase Agreement.

"Registration Rights Agreement" has the meaning specified in Section 3(e)
hereof.

"Redemption Date" has the meaning specified in Section 8 hereof.

"Redemption Notice" has the meaning specified in Section 8 hereof.

"Redemption Price" has the meaning specified in Section 8 hereof.

"Securities" means any debt or equity securities of the Issuer, whether now or
hereafter authorized, any instrument convertible into or exchangeable for
Securities or a Security, and any option, warrant or other right to purchase or
acquire any Security. "Security" means one of the Securities.

"Securities Act" means the Securities Act of 1933, as amended, or any similar
federal statute then in effect.

"Subsidiary" means any corporation at least 50% of whose outstanding Voting
Stock shall at the time be owned directly or indirectly by the Issuer or by one
or more of its Subsidiaries, or by the Issuer and one or more of its
Subsidiaries.

"Term" has the meaning specified in Section 1 hereof.

"Trading Day" means (a) a day on which the Common Stock is traded on the Nasdaq
SmallCap Market, Nasdaq National Market or other registered national stock
exchange on which the Common Stock has been listed, or (b) if the Common Stock
is not listed on the Nasdaq SmallCap Market, Nasdaq National Market or other
registered national stock exchange on which the Common Stock has been listed, a
day on which the Common Stock is quoted in the over-the-counter market, as
<PAGE>

reported by the OTC Bulletin Board, or (c) if the Common Stock is not quoted on
the OTC Bulletin Board, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its functions of
reporting prices); provided, however, that in the event that the Common Stock is
not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading Day
shall mean any day except Saturday, Sunday and any day which shall be a legal
holiday or a day on which banking institutions in the State of New York are
authorized or required by law or other government action to close.

"Voting Stock", as applied to the Capital Stock of any corporation, means
Capital Stock of any class or classes (however designated) having ordinary
voting power for the election of a majority of the members of the Board of
Directors (or other governing body) of such corporation, other than Capital
Stock having such power only by reason of the happening of a contingency.

"VWAP" shall mean the daily volume weighted average price (based on a Trading
Day from 9:30 a.m. to 4:00 p.m., E.S.T.) of the Company on the Nasdaq SmallCap
Market (or any successor thereto) as reported by Bloomberg Financial LP using
the AQR function.

"Warrants" means the B Warrants issued in connection with the sale and issuance
of Common Stock pursuant to the Purchase Agreement, including, without
limitation, this Warrant, and any other warrants of like tenor issued in
substitution or exchange for any thereof pursuant to the provisions of Section
2(c), 2(d) or 2(e) hereof or of any of such other Warrants.

"Warrant Price" means $14.875 per share, as such price may be adjusted from time
to time as shall result from the adjustments specified in Section 4 hereof.

"Warrant Share Number" means at any time the aggregate number of shares of
Warrant Stock which may at such time be purchased upon exercise of this Warrant,
after giving effect to all prior adjustments and increases to such number made
or required to be made under the terms hereof.

"Warrant Stock" means Common Stock issuable upon exercise of any Warrant or
Warrants or otherwise issuable pursuant to any Warrant or Warrants.

Other Notices.  In case at any time:

               c)   the Issuer shall make any distributions to the holders of
                    Common Stock; or

               d)   the Issuer shall authorize the granting to all holders of
                    its Common Stock of rights to subscribe for or purchase any
                    shares of Capital Stock of any class or of any Common Stock
                    Equivalents or Convertible Securities or other rights; or

               e)   there shall be any reclassification of the Capital Stock of
                    the Issuer; or

               f)   there shall be any capital reorganization by the Issuer; or

               g)   there shall be any (i) consolidation or merger involving the
                    Issuer or (ii) sale, transfer or other disposition of all or
                    substantially all of the
<PAGE>

                    Issuer's property, assets or business (except a merger or
                    other reorganization in which the Issuer shall be the
                    surviving corporation and its shares of Capital Stock shall
                    continue to be outstanding and unchanged and except a
                    consolidation, merger, sale, transfer or other disposition
                    involving a wholly-owned Subsidiary); or

               h)   there shall be a voluntary or involuntary dissolution,
                    liquidation or winding-up of the Issuer or any partial
                    liquidation of the Issuer or distribution to holders of
                    Common Stock;

then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights, or shall be entitled to exchange their certificates for Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding-up, as the case may be. Such notice shall be given at least twenty
(20) days prior to the action in question and not less than twenty (20) days
prior to the record date or the date on which the Issuer's transfer books are
closed in respect thereto. The Issuer shall give to the Holder notice of all
meetings and actions by written consent of its stockholders, at the same time in
the same manner as notice of any meetings of stockholders is required to be
given to stockholders who do not waive such notice (or, if such actions require
no notice, then two (2) Trading Days written notice thereof describing the
matters upon which action is to be taken). The Holder shall have the right to
send two representatives selected by it to each meeting, who shall be permitted
to attend, but not vote at, such meeting and any adjournments thereof. This
Warrant entitles the Holder to receive copies of all financial and other
information distributed or required to be distributed to the holders of the
Common Stock.

Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant
     may be amended, or compliance therewith may be waived (either generally or
     in a particular instance and either retroactively or prospectively), by a
     written instrument or written instruments executed by the Issuer and the
     Majority Holders; provided, however, that no such amendment or waiver shall
     reduce the Warrant Share Number, increase the Warrant Price, shorten the
     period during which this Warrant may be exercised or modify any provision
     of this Section 11 without the consent of the Holder of this Warrant.

Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
     WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES
     OF CONFLICTS OF LAW. THIS WARRANT SHALL NOT BE INTERPRETED OR CONSTRUED
     WITH ANY PRESUMPTION AGAINST THE PARTY CAUSING THIS WARRANT TO BE DRAFTED.

Notices. Any and all notices or other communications or deliveries required or
     permitted to be provided hereunder shall be in writing and shall be deemed
     given and effective on the earlier of (i) the date of transmission, if such
     notice or communication is delivered via facsimile at the facsimile
     telephone number specified for notice prior to 5:00 p.m., eastern standard
     time, on a Trading Day, (ii) the Trading Day after the date of
     transmission, if such notice or communication is delivered via facsimile at
     the facsimile telephone number specified for notice later than 5:00 p.m.,
     eastern standard time, on any date and earlier than 11:59 p.m., eastern
     standard time, on such date, (iii) the Trading Day following the date of
     mailing, if sent by nationally recognized overnight courier service or (iv)
     actual receipt by the party to whom such notice is required to be given.
     The addresses for such communications shall be with respect to the Holder
     of this Warrant or of Warrant Stock issued pursuant hereto, addressed to
     such Holder at its last known address or facsimile number appearing on the
     books of the Issuer maintained for such purposes, or with respect to the
     Issuer, addressed to:

                  Virtual Communities, Inc.
                  589 Eighth Avenue,  7th Floor
<PAGE>

                  New York, New York  10018
                  Facsimile Number:  (212) 214-0550
                  Attention: Avi Moskowitz

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other parties hereto
by such notice. Copies of notices to the Issuer shall be sent to Wuersch &
Gering LLP, 11 Hanover Square, 21st Floor, New York, New York, Attention: Travis
Gering, Esq., Facsimile no.(212) 509-9559. Copies of notices to the Holder shall
be sent to (a) Parker Chapin LLP, 405 Lexington Avenue, New York, New York
10174, Attention: Christopher S. Auguste, Esq., Facsimile no.: (212) 704-6288.

Warrant Agent. The Issuer may, by written notice to each Holder of this Warrant,
     appoint an agent having an office in New York, New York for the purpose of
     issuing shares of Warrant Stock on the exercise of this Warrant pursuant to
     subsection (b) of Section 2 hereof, exchanging this Warrant pursuant to
     subsection (d) of Section 2 hereof or replacing this Warrant pursuant to
     subsection (d) of Section 3 hereof, or any of the foregoing, and thereafter
     any such issuance, exchange or replacement, as the case may be, shall be
     made at such office by such agent.

Remedies. The Issuer stipulates that the remedies at law of the Holder of this
     Warrant in the event of any default or threatened default by the Issuer in
     the performance of or compliance with any of the terms of this Warrant are
     not and will not be adequate and that, to the fullest extent permitted by
     law, such terms may be specifically enforced by a decree for the specific
     performance of any agreement contained herein or by an injunction against a
     violation of any of the terms hereof or otherwise.

Successors and Assigns. This Warrant and the rights evidenced hereby shall inure
     to the benefit of and be binding upon the successors and assigns of the
     Issuer, the Holder hereof and (to the extent provided herein) the Holders
     of Warrant Stock issued pursuant hereto, and shall be enforceable by any
     such party.

Modification and Severability. If, in any action before any court or agency
     legally empowered to enforce any provision contained herein, any provision
     hereof is found to be unenforceable, then such provision shall be deemed
     modified to the extent necessary to make it enforceable by such court or
     agency. If any such provision is not enforceable as set forth in the
     preceding sentence, the unenforceability of such provision shall not affect
     the other provisions of this Warrant, but this Warrant shall be construed
     as if such unenforceable provision had never been contained herein.

Headings. The headings of the Sections of this Warrant are for convenience of
     reference only and shall not, for any purpose, be deemed a part of this
     Warrant.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year
first above written.

                                       VIRTUAL COMMUNITIES, INC.

                                       By:
                                          --------------------------------------
                                          Name:
                                          Title:
<PAGE>

                                  EXERCISE FORM

[NAME OF ISSUER]

The undersigned _______________, pursuant to the provisions of the within
Warrant, hereby elects to purchase _____ shares of Common Stock of
___________________ covered by the within Warrant.
Dated: _________________            Signature __________________________________
                                           Address  ____________________________
                                                    ____________________________

                                   ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Warrant and all rights evidenced thereby and does
irrevocably constitute and appoint _____________, attorney, to transfer the said
Warrant on the books of the within named corporation.

Dated: _________________            Signature __________________________________
                                           Address  ____________________________
                                                    ____________________________

                               PARTIAL ASSIGNMENT

FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the right to purchase _________ shares of Warrant Stock
evidenced by the within Warrant together with all rights therein, and does
irrevocably constitute and appoint ___________________, attorney, to transfer
that part of the said Warrant on the books of the within named corporation.

Dated: _________________            Signature __________________________________
                                           Address  ____________________________
                                                    ____________________________

                           FOR USE BY THE ISSUER ONLY:

This Warrant No. W-A- cancelled (or transferred or exchanged) this _____ day of
___________, _____, shares of Common Stock issued therefor in the name of
_______________, Warrant No. W-A- issued for ____ shares of Common Stock in the
name of _______________.

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