Document:

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EXHIBIT 4.02
                                APO HEALTH, INC.
                 2003 PROFESSIONAL/CONSULTANT STOCK COMPENSATION PLAN

1. Purpose The purpose of this Plan is to provide compensation in the form of
Common Stock of the Company to eligible consultants that have previously
rendered services or that will render services during the term of this 2003
Professional/Consultant Stock Compensation Plan (hereinafter referred to as the
Plan.)

2.  Administration
(a) This Plan shall be administered by the Board of Directors who may from time
to time issue orders or adopt resolutions, not inconstant with the provisions of
this Plan, to interpret the provisions and supervise the administration of this
Plan. The CEO shall make initial determinations as to which consultants,
professionals or advisors will be considered to receive shares under this Plan,
in addition, will provide a list to the Board of Directors. All final
determinations shall be by the affirmative vote of a majority of the members of
the Board of Directors at a meeting called for such purpose, or reduced to
writing and signed by a majority of the members of the Board. Subject to the
Corporation's Bylaws, all decisions made by the Directors in selecting eligible
consultants (hereinafter referred to as Consultants), establishing the number of
shares, and construing the provisions of this Plan shall be final, conclusive
and binding on all persons including the Corporation, shareholders, employees
and Consultants.

(b) The Board of Directors may from time to time appoint a Consultants Plan
Committee, consisting of at least one Director and one officer, none of whom
shall be eligible to participate in the Plan while members of the Committee. The
Board of Directors may delegate to such Committee power to select the particular
Consultants that are to receive shares, and to determine the number of shares to
be allocated to each such Consultant.

(c) If the SEC Rules and or regulations relating to the issuance of Common Stock
under a Form S-8 should change during the terms of this Plan, the Board of
Directors shall have the power to alter this Plan to conform to such changes.

3.  Eligibility

(a)  Shares shall be granted only to Professionals and Consultants that are
within  that  class  for  which  Form S-8 is applicable.

(b)  No individual or entity shall be granted more than 500,000 shares of
unrestricted Common Stock under this Plan.

4.  Shares Subject to the Plan

The total number of shares of Common Stock to be subject to this Plan is
2,750,000. The shares subject to the Plan will be registered with the SEC on or
about March 13, 2003 in a Form S-8 Registration.

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5.  Death of Consultant

If a Consultant dies while he is a Consultant of the Corporation or of any
subsidiary, or within 90 days after such termination, the shares, to the extent
that the Consultant was to be issued shares under the plan, may be issued to his
personal representative or the person or persons to whom his rights under the
plan  shall  pass  by  his  will  or  by  the  applicable  laws  of  descent and
distribution.

6.  Termination of Consultant, retirement or disability

If a Consultant shall cease to be retained by the Corporation for any reason
(including retirement and disability) other than death after he shall have
continuously been so retained for his specified term, he may, but only within
the three-month period immediately following such termination, request his
pro-rata number of shares for his services already rendered.

7.  Termination of the Plan

This Plan shall terminate one year after its adoption by the Board of Directors.
At such time, any shares that remain unsold shall be removed from registration
by  means of a post-effective  amendment to the Form  S-8.

8.  Effective Date of the Plan

This Plan shall become effective upon its adoption by the Board of Directors.

                            CERTIFICATION OF ADOPTION
                           (By the Board of Directors)

The undersigned, being the CEO and Chairman of the Board of Directors of APO
Health, Inc.  hereby certify that the foregoing Plan was adopted by a unanimous
vote of the Board of Directors on February 7, 2003.

                            /S/ Jan Stahl
                            ---------------------------------
                            Dr.  Jan Stahl, CEO

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                                                                 EXECUTION COPY

                         COMMON STOCK PURCHASE AGREEMENT

         COMMON STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of March 7,
2003 by and between  ISECURETRAC CORP., a Delaware  corporation (the "Company"),
and FUSION  CAPITAL  FUND II, LLC, an Illinois  limited  liability  company (the
"Buyer").  Capitalized  terms used herein and not otherwise  defined  herein are
defined in Section 10 hereof.

                                    WHEREAS:

         Subject to the terms and  conditions set forth in this  Agreement,  the
Company  wishes  to sell to the  Buyer,  and the  Buyer  wishes  to buy from the
Company,  up to Six Million Dollars  ($6,000,000) of the Company's common stock,
par value $0.001 per share (the "Common  Stock").  The shares of Common Stock to
be purchased hereunder are referred to herein as the "Purchase Shares."

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

         1.       PURCHASE OF COMMON STOCK.

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

         (a) Commencement of Purchases of Common Stock. The purchase and sale of
             -----------------------------------------
Common Stock  hereunder  shall  commence  (the  "Commencement")  within five (5)
Trading Days following the date of satisfaction (or waiver) of the conditions to
the  Commencement  set forth in Sections 6 and 7 below (or such later date as is
mutually agreed to by the Company and Buyer) (the date of such Commencement, the
"Commencement Date").

         (b) Buyer's Purchase Rights and  Obligations.  Subject to the Company's
             -----------------------------------------
right to suspend  purchases  under  Section  1(d)(ii)  hereof,  the Buyer  shall
purchase  shares of Common Stock on each Trading Day during each Monthly  Period
equal to the Daily  Purchase  Amount  (as  defined in  Section  1(c)(i))  at the
Purchase Price.  Within one (1) Trading Day of receipt of Purchase  Shares,  the
Buyer  shall pay to the  Company an amount  equal to the  Purchase  Amount  with
respect to such Purchase Shares as full payment for the purchase of the Purchase
Shares so  received.  The  Company  shall not issue any  fraction  of a share of
Common Stock upon any purchase.  All shares of Common Stock (including fractions
thereof)  issuable upon a purchase under this Agreement  shall be aggregated for
purposes of  determining  whether the purchase would result in the issuance of a
fraction of a share of Common Stock. If, after the  aforementioned  aggregation,
the  issuance  would  result in the  issuance of a fraction of a share of Common
Stock,  the Company  shall round such  fraction of a share of Common Stock up or
down to the nearest whole share. All payments made under this Agreement shall be
made in lawful money of the United  States of America by check or wire  transfer
of immediately  available  funds to such account as the Company may from time to
time  designate by written  notice in  accordance  with the  provisions  of this
Agreement.  Whenever  any  amount  expressed  to be  due by the  terms  of  this
Agreement is due on any day that is not a Trading Day, the same shall instead be
due on the next succeeding day which is a Trading Day.

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         (c) The Daily Purchase Amount;  Company's Right to Decrease or Increase
         -----------------------------------------------------------------------
the Daily Purchase Amount.
--------------------------

                  (i) The  Daily  Purchase  Amount.  As  used  herein  the  term
                      ----------------------------
         "Original  Daily  Purchase  Amount"  shall  mean Ten  Thousand  Dollars
         ($10,000)  per Trading  Day. As used herein,  the term "Daily  Purchase
         Amount" shall mean initially Ten Thousand Dollars ($10,000) per Trading
         Day,  which  amount may be  increased  or  decreased  from time to time
         pursuant to this Section 1(c).

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

                   (iii) Company's Right to Increase the Daily Purchase  Amount.
                         ------------------------------------------------------
         The Company shall have the right (but not the  obligation)  to increase
         the amount of the Daily  Purchase  Amount in accordance  with the terms
         and  conditions  set  forth in this  Section  1(c)(iii)  by  delivering
         written  notice  to the  Buyer  stating  the new  amount  of the  Daily
         Purchase Amount (a "Daily Purchase  Amount Increase  Notice").  A Daily
         Purchase  Amount  Increase  Notice shall be effective  five (5) Trading
         Days after  receipt by the Buyer.  The  Company  shall  always have the
         right at any time to increase the amount of the Daily  Purchase  Amount
         up to the Original Daily Purchase Amount.  With respect to increases in
         the Daily Purchase Amount above the Original Daily Purchase Amount,  as
         the market price for the Common Stock  increases the Company shall have
         the right from time to time to increase  the Daily  Purchase  Amount as
         follows.  For every  $0.25  increase  in  Threshold  Price  above $0.75
         (subject   to   equitable    adjustment    for   any    reorganization,
         recapitalization,  non-cash  dividend,  stock  split or  other  similar
         transaction),  the Company  shall have the right to increase  the Daily
         Purchase Amount by up to an additional $2,000 in excess of the Original
         Daily Purchase Amount.  "Threshold Price" for purposes hereof means the
         lowest Sale Price of the Common Stock  during the five (5)  consecutive
         Trading  Days  immediately  prior to the  submission  to the Buyer of a
         Daily Purchase Amount Increase Notice (subject to equitable  adjustment
         for any  reorganization,  recapitalization,  non-cash  dividend,  stock
         split or other  similar  transaction).  For example,  if the  Threshold
         Price is $1.00,  the Company shall have the right to increase the Daily
         Purchase  Amount to up to $12,000 in the  aggregate.  If the  Threshold
         Price is $1.50,  the Company shall have the right to increase the Daily
         Purchase Amount to up to $16,000 in the aggregate.  Any increase in the
         amount of the Daily Purchase  Amount shall continue in effect until the
         delivery  to the  Buyer of a Daily  Purchase  Amount  Decrease  Notice.
         However,  if at any time  during any  Trading Day the Sale Price of the
         Common Stock is below the applicable  Threshold Price, such increase in
         the Daily Purchase Amount shall be void and the Buyer's  obligations to

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         buy Purchase Shares hereunder in excess of the applicable maximum Daily
         Purchase  Amount shall be  terminated.  Thereafter,  the Company  shall
         again  have the right to  increase  the  amount  of the Daily  Purchase
         Amount as set forth herein by delivery of a new Daily  Purchase  Amount
         Increase Notice only if the Sale Price of the Common Stock is above the
         applicable Threshold Price on each of five (5) consecutive Trading Days
         immediately prior to such new Daily Purchase Amount Increase Notice.

         (d) Limitations on Purchases.
             -------------------------

                  (i) Limitation on Beneficial Ownership.  The Company shall not
                      -----------------------------------
         effect any sale under this  Agreement  and the Buyer shall not have the
         right to purchase  shares of Common  Stock under this  Agreement to the
         extent that after giving  effect to such  purchase  the Buyer  together
         with its  affiliates  would  beneficially  own in excess of 4.9% of the
         outstanding  shares of the Common Stock  following such  purchase.  For
         purposes  hereof,  the  number of shares of Common  Stock  beneficially
         owned by the Buyer and its  affiliates or acquired by the Buyer and its
         affiliates,  as the case may be, shall  include the number of shares of
         Common  Stock  issuable  in  connection  with  a  purchase  under  this
         Agreement  with respect to which the  determination  is being made, but
         shall  exclude  the  number of shares of Common  Stock  which  would be
         issuable  upon (1) a purchase of the remaining  Available  Amount which
         has not been submitted for purchase,  and (2) exercise or conversion of
         the unexercised or unconverted  portion of any other  securities of the
         Company  (including,  without  limitation,  any warrants)  subject to a
         limitation  on  conversion  or  exercise  analogous  to the  limitation
         contained herein beneficially owned by the Buyer and its affiliates. If
         the 4.9%  limitation  is ever reached the Company shall have the option
         to increase such  limitation  to 9.9% by delivery of written  notice to
         the Buyer.  Thereafter,  if the 9.9%  limitation  is ever  reached this
         shall not affect or limit the Buyer's  obligation to purchase the Daily
         Purchase Amount as otherwise provided in this Agreement.  Specifically,
         even though the Buyer may not receive additional shares of Common Stock
         in the event that the 9.9%  limitation  is ever  reached,  the Buyer is
         still obligated to pay to the Company the Daily Purchase Amount on each
         Trading Day as otherwise obligated under this Agreement,  e.g. no Event
         of Default (as defined in Section 9 hereof) has occurred, nor any event
         which,  after  notice  and/or  lapse of time,  would become an Event of
         Default.  Under such  circumstances,  the Buyer would have the right to
         acquire  additional  shares of Common  Stock in the future only at such
         time  as  its  ownership   subsequently   become  less  than  the  9.9%
         limitation.  For purposes of this Section, in determining the number of
         outstanding  shares of Common Stock the Buyer may rely on the number of
         outstanding  shares of Common Stock as  reflected in (1) the  Company's
         most  recent  Form 10-Q or Form  10-K,  as the case may be,  (2) a more
         recent  public  announcement  by the  Company or (3) any other  written
         communication  by the Company or its Transfer  Agent  setting forth the
         number  of  shares of Common  Stock  outstanding.  Upon the  reasonable
         written or oral  request  of the  Buyer,  the  Company  shall  promptly
         confirm  orally  and in  writing  to the Buyer the  number of shares of
         Common Stock then  outstanding.  In any case, the number of outstanding
         shares of Common Stock shall be  determined  after giving effect to any
         purchases  under this Agreement by the Buyer since the date as of which
         such number of outstanding shares of Common Stock was reported.  Except
         as otherwise  set forth herein,  for purposes of this Section  1(d)(i),
         beneficial  ownership  shall be determined  in accordance  with Section
         13(d) of the Securities Exchange Act of 1934, as amended.

                  (ii) Company's Right to Suspend Purchases. The Company may, at
                       -------------------------------------
         any time, give written notice (a "Purchase  Suspension  Notice") to the
         Buyer  suspending  purchases of Purchase Shares by the Buyer under this
         Agreement.  The Purchase  Suspension Notice shall be effective only for
         purchases  that have a Purchase  Date later  than one (1)  Trading  Day
         after  receipt of the  Purchase  Suspension  Notice by the  Buyer.  Any

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

                  (iii) Purchase  Price Floor.  The Company shall not affect any
                        ----------------------
         sales under this  Agreement  and the Buyer shall not have the right nor
         the obligation to purchase any Purchase  Shares under this Agreement on
         any Trading Day where the Purchase  Price for any purchases of Purchase
         Shares would be less than the Floor Price.

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

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

         2.       BUYER'S REPRESENTATIONS AND WARRANTIES.

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

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

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

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

         (d)  Information.  The  Buyer  has been  furnished  with all  materials
              -----------
relating to the business,  finances and  operations of the Company and materials
relating  to the offer  and sale of the  Securities  that  have been  reasonably
requested by the Buyer,  including,  without  limitation,  the SEC Documents (as

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defined in Section 3(f) hereof).  The Buyer  understands  that its investment in
the Securities involves a high degree of risk. The Buyer (i) is able to bear the
economic risk of an investment in the  Securities  including a total loss,  (ii)
has such knowledge and  experience in financial and business  matters that it is
capable of  evaluating  the merits and risks of the proposed  investment  in the
Securities  and (iii) has had an  opportunity  to ask  questions  of and receive
answers from the officers of the Company concerning the financial  condition and
business of the  Company  and others  matters  related to an  investment  in the
Securities.  Neither such  inquiries nor any other due diligence  investigations
conducted by the Buyer or its representatives  shall modify, amend or affect the
Buyer's right to rely on the Company's  representations and warranties contained
in Section 3 below. The Buyer has sought such  accounting,  legal and tax advice
as it has  considered  necessary to make an informed  investment  decision  with
respect to its acquisition of the Securities.

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

         (f) Transfer or Resale.  The Buyer  understands that except as provided
             -------------------
in the Registration  Rights  Agreement (as defined in Section 4(a) hereof):  (i)
the Securities have not been and are not being  registered under the 1933 Act or
any state securities  laws, and may not be offered for sale,  sold,  assigned or
transferred  unless (A) subsequently  registered  thereunder or (B) an exemption
exists  permitting such Securities to be sold,  assigned or transferred  without
such registration;  (ii) any sale of the Securities made in reliance on Rule 144
may be made only in accordance  with the terms of Rule 144 and further,  if Rule
144 is not applicable, any resale of the Securities under circumstances in which
the seller (or the person  through whom the sale is made) may be deemed to be an
underwriter  (as that term is  defined in the 1933 Act) may  require  compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder;  and (iii) neither the Company nor any other person is under any
obligation to register the Securities under the 1933 Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder.

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

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

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

                                       8
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         3.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

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

         (a) Organization and Qualification.  The Company and its "Subsidiaries"
             ------------------------------
(which for  purposes of this  Agreement  means any entity in which the  Company,
directly or indirectly, owns 50% or more of the voting stock or capital stock or
other similar  equity  interests)  are  corporations  duly organized and validly
existing in good standing under the laws of the  jurisdiction  in which they are
incorporated,  and have the requisite corporate power and authority to own their
properties  and to carry on their business as now being  conducted.  Each of the
Company and its  Subsidiaries  is duly qualified as a foreign  corporation to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business  conducted by it makes such qualification
necessary,  except to the extent  that the failure to be so  qualified  or be in
good  standing  could not  reasonably  be  expected  to have a Material  Adverse
Effect. As used in this Agreement,  "Material Adverse Effect" means any material
adverse  effect on any of: (i) the  business,  properties,  assets,  operations,
results  of   operations   or  financial   condition  of  the  Company  and  its
Subsidiaries,  if any, taken as a whole, or (ii) the authority or ability of the
Company to perform its obligations  under the Transaction  Documents (as defined
in Section 3(b) hereof).  The Company has no Subsidiaries except as set forth on
Schedule 3(a).

         (b)  Authorization;  Enforcement;  Validity.  (i) The  Company  has the
              ---------------------------------------
requisite   corporate  power  and  authority  to  enter  into  and  perform  its
obligations under this Agreement,  the Registration Rights Agreement and each of
the other agreements  entered into by the parties on the  Commencement  Date and
attached hereto as exhibits to this Agreement  (collectively,  the  "Transaction
Documents"), and to issue the Securities in accordance with the terms hereof and
thereof,  (ii) the  execution and delivery of the  Transaction  Documents by the
Company and the consummation by it of the transactions  contemplated  hereby and
thereby, including without limitation, the issuance of the Commitment Shares and
the  reservation  for issuance and the issuance of the Purchase  Shares issuable
under  this  Agreement,  have been duly  authorized  by the  Company's  Board of
Directors and no further  consent or  authorization  is required by the Company,
its Board of Directors or its  shareholders,  (iii) this Agreement has been, and
each other Transaction Document shall be on the Commencement Date, duly executed
and delivered by the Company and (iv) this Agreement constitutes, and each other
Transaction  Document  upon  its  execution  on  behalf  of the  Company,  shall
constitute, the valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except as such enforceability may be
limited by general  principles of equity or applicable  bankruptcy,  insolvency,
reorganization,   moratorium,  liquidation  or  similar  laws  relating  to,  or
affecting  generally,  the  enforcement of creditors'  rights and remedies.  The
Board of Directors of the Company has approved  the  resolutions  (the  "Signing
Resolutions")  substantially  in the form as set forth as Exhibit  D-1  attached
hereto to authorize this Agreement and the transactions contemplated hereby. The
Signing  Resolutions  are  valid,  in full  forth and  effect  and have not been
modified or  supplemented in any respect other than by the resolutions set forth
in Exhibit D-2 attached hereto regarding the registration  statement referred to
in Section 4 hereof.  The Company has  delivered to the Buyer a true and correct
copy of a unanimous written consent adopting the Signing Resolutions executed by
all of the members of the Board of Directors of the Company.  No other approvals
or consents of the Company's Board of Directors and/or shareholders is necessary
under  applicable  laws and the Company's  Certificate of  Incorporation  and/or
Bylaws to authorize the  execution and delivery of this  Agreement or any of the
transactions contemplated hereby, including, but not limited to, the issuance of
the Commitment Shares and the issuance of the Purchase Shares.

                                       9
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         (c) Capitalization. As of the date hereof, the authorized capital stock
             --------------
of the Company consists of (i) 50,000,000 shares of Common Stock, of which as of
the date hereof,  36,426,720  shares are issued and  outstanding,  no shares are
held as treasury shares,  8,150,000 shares are reserved for issuance pursuant to
the  Company's  stock option plans of which only  approximately  554,167  shares
remain  available  for future  grants and  1,532,722  shares  are  issuable  and
reserved for issuance  pursuant to securities  (other than stock options  issued
pursuant to the Company's stock option plans)  exercisable or exchangeable  for,
or convertible  into,  shares of Common Stock and (ii) 10,000 shares of Series A
Preferred Stock, $0.01 par value with a $1,000 per share liquidation preference,
of which as of the date hereof 8,483 shares are issued and outstanding and 3,500
shares of Series B  Preferred  Stock,  $0.01 par value  with a $1,000  per share
liquidation preference, of which as of the date hereof 300 shares are issued and
outstanding. All of such outstanding shares have been, or upon issuance will be,
validly  issued and are fully paid and  nonassessable.  Except as  disclosed  in
Schedule  3(c),  (i) no shares of the  Company's  capital  stock are  subject to
preemptive  rights or any  other  similar  rights  or any liens or  encumbrances
suffered  or  permitted  by the  Company,  (ii)  there are no  outstanding  debt
securities,  (iii) there are no outstanding options,  warrants, scrip, rights to
subscribe to, calls or commitments of any character  whatsoever  relating to, or
securities  or rights  convertible  into,  any  shares of  capital  stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements  by which the Company or any of its  Subsidiaries  is or may become
bound to issue  additional  shares of capital stock of the Company or any of its
Subsidiaries  or options,  warrants,  scrip,  rights to  subscribe  to, calls or
commitments  of any  character  whatsoever  relating to, or securities or rights
convertible  into,  any  shares of  capital  stock of the  Company or any of its
Subsidiaries,  (iv) there are no  agreements  or  arrangements  under  which the
Company or any of its  Subsidiaries  is obligated to register the sale of any of
their securities under the 1933 Act (except the Registration  Rights Agreement),
(v) there are no outstanding  securities or instruments of the Company or any of
its Subsidiaries which contain any redemption or similar  provisions,  and there
are no  contracts,  commitments,  understandings  or  arrangements  by which the
Company or any of its  Subsidiaries  is or may become bound to redeem a security
of the  Company  or any of its  Subsidiaries,  (vi) there are no  securities  or
instruments  containing   anti-dilution  or  similar  provisions  that  will  be
triggered by the issuance of the  Securities as described in this  Agreement and
(vii) the Company does not have any stock appreciation rights or "phantom stock"
plans or agreements or any similar plan or agreement.  The Company has furnished
to  the  Buyer  true  and  correct  copies  of  the  Company's   Certificate  of
Incorporation,  as amended and as in effect on the date hereof (the "Certificate
of  Incorporation"),  and the Company's By-laws,  as amended and as in effect on
the date hereof (the  "By-laws"),  and summaries of the terms of all  securities
convertible  into or  exercisable  for Common  Stock,  if any, and copies of any
documents  containing  the  material  rights of the  holders  thereof in respect
thereto.

         (d)  Issuance  of  Securities.  The  Commitment  Shares  have been duly
              -------------------------
authorized  and,  upon  issuance  in  accordance  with  the  terms  hereof,  the
Commitment Shares shall be (i) validly issued, fully paid and non-assessable and
(ii) free from all taxes,  liens and charges with respect to the issue  thereof.
10,000,000  shares of Common  Stock have been duly  authorized  and reserved for
issuance upon purchase under this Agreement.  Upon issuance and payment therefor
in  accordance  with the terms and  conditions of this  Agreement,  the Purchase
Shares shall be validly issued,  fully paid and  nonassessable and free from all
taxes,  liens and charges  with respect to the issue  thereof,  with the holders
being entitled to all rights accorded to a holder of Common Stock.

         (e) No Conflicts.  Except as disclosed in Schedule 3(e), the execution,
             -------------
delivery and  performance  of the  Transaction  Documents by the Company and the
consummation by the Company of the transactions  contemplated hereby and thereby
(including, without limitation, the reservation for issuance and issuance of the

                                       10
<PAGE>

Purchase  Shares)  will not (i)  result in a  violation  of the  Certificate  of
Incorporation,  any Certificate of  Designations,  Preferences and Rights of any
outstanding  series of  preferred  stock of the  Company or the  By-laws or (ii)
conflict  with,  or constitute a default (or an event which with notice or lapse
of time or both would become a default)  under,  or give to others any rights of
termination,   amendment,   acceleration  or  cancellation  of,  any  agreement,
indenture or  instrument  to which the Company or any of its  Subsidiaries  is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree  (including  federal and state  securities  laws and  regulations and the
rules and regulations of the Principal  Market  applicable to the Company or any
of its  Subsidiaries) or by which any property or asset of the Company or any of
its Subsidiaries is bound or affected, except in the case of conflicts, defaults
and  violations  under clause (ii),  which could not  reasonably  be expected to
result in a Material  Adverse  Effect.  Except as  disclosed  in Schedule  3(e),
neither the Company nor its  Subsidiaries  is in  violation of any term of or in
default under its Certificate of Incorporation,  any Certificate of Designation,
Preferences  and  Rights of any  outstanding  series of  preferred  stock of the
Company or By-laws or their  organizational  charter or  by-laws,  respectively.
Except as  disclosed  in  Schedule  3(e),  neither  the  Company  nor any of its
Subsidiaries  is in violation of any term of or is in default under any material
contract, agreement, mortgage,  indebtedness,  indenture,  instrument, judgment,
decree or order or any statute,  rule or regulation applicable to the Company or
its  Subsidiaries,  except for possible  conflicts,  defaults,  terminations  or
amendments  which could not  reasonably  be expected to have a Material  Adverse
Effect. The business of the Company and its Subsidiaries is not being conducted,
and shall not be conducted,  in violation of any law,  ordinance,  regulation of
any governmental entity, except for possible violations, the sanctions for which
either individually or in the aggregate could not reasonably be expected to have
a Material Adverse Effect. Except as specifically contemplated by this Agreement
and as required  under the 1933 Act or applicable  state  securities  laws,  the
Company is not  required to obtain any  consent,  authorization  or order of, or
make any filing or registration  with, any court or  governmental  agency or any
regulatory  or  self-regulatory  agency in order for it to  execute,  deliver or
perform  any  of its  obligations  under  or  contemplated  by  the  Transaction
Documents in accordance with the terms hereof or thereof. Except as disclosed in
Schedule 3(e), all consents,  authorizations,  orders, filings and registrations
which the Company is required to obtain pursuant to the preceding sentence shall
be obtained or effected on or prior to the Commencement  Date.  Except as listed
in Schedule  3(e),  since  January 1, 2002,  the Company  has not  received  nor
delivered any notices or  correspondence  from or to the Principal  Market.  The
Principal  Market  has not  commenced  any  delisting  proceedings  against  the
Company.

         (f)  SEC  Documents;  Financial  Statements.  Except  as  disclosed  in
              ---------------------------------------
Schedule 3(f), since January 1, 2002,, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the "1934 Act") (all of the foregoing  filed prior to the date
hereof and all exhibits included therein and financial  statements and schedules
thereto and  documents  incorporated  by  reference  therein  being  hereinafter
referred to as the "SEC  Documents").  As of their  respective  dates (except as
they have been correctly  amended),  the SEC Documents  complied in all material
respects with the  requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents,  and none of the
SEC Documents, at the time they were filed with the SEC (except as they may have
been properly  amended),  contained  any untrue  statement of a material fact or
omitted to state a material fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they were made, not  misleading.  As of their  respective  dates (except as they
have been properly amended), the financial statements of the Company included in
the SEC Documents  complied as to form in all material  respects with applicable
accounting  requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with

                                       11
<PAGE>

generally  accepted  accounting  principles,  consistently  applied,  during the
periods  involved  (except (i) as may be otherwise  indicated in such  financial
statements  or the  notes  thereto  or (ii) in the  case  of  unaudited  interim
statements,  to the extent they may exclude  footnotes  or may be  condensed  or
summary  statements)  and fairly present in all material  respects the financial
position  of  the  Company  as of the  dates  thereof  and  the  results  of its
operations  and cash flows for the periods then ended  (subject,  in the case of
unaudited statements, to normal year-end audit adjustments). Except as listed in
Schedule  3(f), the Company has received no notices or  correspondence  from the
SEC since January 1, 2002. The SEC has not commenced any enforcement proceedings
against the Company or any of its subsidiaries.

         (g) Absence of Certain  Changes.  Except as disclosed in Schedule 3(g),
             ----------------------------
since  September  30,  2002,  there has been no material  adverse  change in the
business, properties,  operations,  financial condition or results of operations
of the Company or its  Subsidiaries.  The  Company has not taken any steps,  and
does not currently expect to take any steps, to seek protection  pursuant to any
Bankruptcy  Law  nor  does  the  Company  or any of its  Subsidiaries  have  any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy or insolvency proceedings.  The Company is financially solvent and is
generally able to pay its debts as they become due.

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

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

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

          (k) Dilutive Effect. The Company understands and acknowledges that the
              ---------------
number of Purchase Shares purchasable under this Agreement is not fixed and will
vary  depending on the Purchase  Price at which such shares are  purchased.  The

                                       12
<PAGE>

Company further  acknowledges that its obligation to issue Purchase Shares under
this Agreement in accordance  with the terms and  conditions  hereof is absolute
and unconditional  regardless of the dilutive effect that such issuance may have
on the ownership interests of other shareholders of the Company.

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

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

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

         (o) Insurance.  The Company and each of its Subsidiaries are insured by
             ----------
insurers of recognized  financial  responsibility  against such losses and risks
and in such  amounts as  management  of the  Company  believes to be prudent and
customary  in the  businesses  in which the  Company  and its  Subsidiaries  are
engaged.  Neither  the  Company  nor any such  Subsidiary  has been  refused any
insurance  coverage  sought or applied  for and neither the Company nor any such

                                       13
<PAGE>

Subsidiary  has any  reason  to  believe  that it will not be able to renew  its
existing  insurance  coverage  as and when such  coverage  expires  or to obtain
similar  coverage  from  similar  insurers as may be  necessary  to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise,  or the earnings,  business or operations of the Company
and its Subsidiaries, taken as a whole.

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

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

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

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

         (t) Foreign  Corrupt  Practices.  Neither the  Company,  nor any of its
             ---------------------------
Subsidiaries,  nor any director, officer, agent, employee or other person acting
on behalf of the  Company or any of its  Subsidiaries  has, in the course of its
actions  for, or on behalf of, the  Company,  used any  corporate  funds for any
unlawful contribution,  gift,  entertainment or other unlawful expenses relating

                                       14
<PAGE>

to  political  activity;  made any direct or  indirect  unlawful  payment to any
foreign or  domestic  government  official  or employee  from  corporate  funds;
violated  or is in  violation  of any  provision  of the  U.S.  Foreign  Corrupt
Practices Act of 1977, as amended; or made any unlawful bribe,  rebate,  payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

         4. COVENANTS.

         (a) Filing of Registration Statement. The Company shall within ten (10)
             --------------------------------
Trading Days from the date hereof file a new registration statement covering the
sale of the  Commitment  Shares  and at  least  10,000,000  Purchase  Shares  in
accordance  with the terms of the  Registration  Rights  Agreement  between  the
Company  and the  Buyer,  dated  as of the  date  hereof  ("Registration  Rights
Agreement.").

         (b) Blue Sky.  The  Company  shall  take  such  action,  if any,  as is
             --------
reasonably  necessary in order to obtain an exemption  for or to qualify (i) the
initial sale of the Commitment Shares and any Purchase Shares to the Buyer under
this Agreement and (ii) any subsequent  resale of the Commitment  Shares and any
Purchase Shares by the Buyer, in each case, under applicable securities or "Blue
Sky" laws of the states of the  United  States in such  states as is  reasonably
requested by the Buyer from time to time, and shall provide evidence of any such
action so taken to the Buyer.

         (c)  No  Variable  Priced  Financing.   Other  than  pursuant  to  this
              -------------------------------
Agreement,  the Company  agrees that beginning on the date of this Agreement and
ending on the date of  termination  of this  Agreement  (as  provided in Section
11(k) hereof),  neither the Company nor any of its Subsidiaries  shall,  without
the prior  written  consent of the  Buyer,  contract  for any  equity  financing
(including  any debt  financing  with an equity  component)  or issue any equity
securities  of the  Company  or any  Subsidiary  or  securities  convertible  or
exchangeable  into or for equity  securities  of the  Company or any  Subsidiary
(including debt securities with an equity  component) which, in any case (i) are
convertible into or exchangeable for an indeterminate number of shares of common
stock,  (ii) are convertible  into or  exchangeable  for Common Stock at a price
which  varies  with the market  price of the Common  Stock,  (iii)  directly  or
indirectly  provide  for any  "re-set"  or  adjustment  of the  purchase  price,
conversion  rate or exercise  price after the issuance of the security,  or (iv)
contain any  "make-whole"  provision  based upon,  directly or  indirectly,  the
market  price of the Common Stock after the  issuance of the  security,  in each
case, other than reasonable and customary anti-dilution adjustments for issuance
of shares  of Common  Stock at a price  which is below the  market  price of the
Common Stock.

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

                                       15
<PAGE>

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

         (f) Issuance of  Commitment  Shares;  Limitation on Sales of Commitment
             -------------------------------------------------------------------
Shares.  Immediately  upon the  execution of this  Agreement,  the Company shall
------
issue to the Buyer 1,076,233 shares of Common Stock (the  "Commitment  Shares").
The  Commitment  Shares  shall be issued in  certificated  form and  (subject to
Section 5 hereof) shall bear the following restrictive legend:

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

           The Buyer  agrees  that the  Buyer  shall  not  transfer  or sell the
Commitment  Shares  until the earlier of 600 Trading  Days (30 Monthly  Periods)
from the date hereof or the date on which this  Agreement  has been  terminated,
provided,  however,  that such  restrictions  shall not apply: (i) in connection
with any transfers to or among  affiliates (as defined in the 1934 Act), (ii) in
connection  with any  pledge  in  connection  with a bona  fide  loan or  margin
account,  (iii) in the event that the  Commencement  does not occur on or before
May 31, 2003,  due to the failure of the Company to satisfy the  conditions  set
forth in Section 7 or (iv) if an Event of  Default  has  occurred,  or any event
which,  after  notice  and/or  lapse of time,  would become an Event of Default,
including any failure by the Company to timely issue Purchase  Shares under this
Agreement.  Notwithstanding  the  forgoing,  the Buyer may  transfer  Commitment
Shares to a third  party in order to  settle a sale made by the Buyer  where the
Buyer  reasonably  expects the Company to deliver  Purchase  Shares to the Buyer
under  this  Agreement  so long as the  Buyer  maintains  ownership  of the same
overall number of shares of Common Stock by "replacing" the Commitment Shares so
transferred with Purchase Shares when the Purchase Shares are actually issued by
the Company to the Buyer.

         (g) Due Diligence. The Buyer shall have the right, from time to time as
             -------------
the Buyer may reasonably deem appropriate,  to perform  reasonable due diligence
on the Company during normal  business  hours.  The Company and its officers and
employees shall provide  information and reasonably  cooperate with the Buyer in
connection  with any reasonable  request by the Buyer related to the Buyer's due
diligence of the Company,  including,  but not limited to, any such request made
by the Buyer in  connection  with (i) the filing of the  registration  statement
described  in Section 4(a) hereof and (ii) the  Commencement.  Each party hereto
agrees not to disclose any  Confidential  Information  of the other party to any
third party and shall not use the Confidential Information for any purpose other
than in connection  with, or in furtherance  of, the  transactions  contemplated

                                       16
<PAGE>

hereby. Each party hereto  acknowledges that the Confidential  Information shall
remain the  property of the  disclosing  party and agrees that it shall take all
reasonable  measures  to protect  the  secrecy of any  Confidential  Information
disclosed by the other party.

         5.       TRANSFER AGENT INSTRUCTIONS.

         Immediately  upon the  execution of this  Agreement,  the Company shall
deliver  to the  Transfer  Agent a letter in the form as set forth as  Exhibit F
                                                                       ---------
attached hereto with respect to the issuance of the Initial  Commitment  Shares.
On the Commencement  Date, the Company shall cause any restrictive legend on the
Commitment  Shares  and the  shares of  Common  Stock  issued to the Buyer  upon
signing that  certain Term Sheet  between the Buyer and the Company and dated as
of January 27, 2003 (the "Signing Shares") to be removed and all of the Purchase
Shares to be issued under this Agreement shall be issued without any restrictive
legend. The Company shall issue irrevocable  instructions to the Transfer Agent,
and any subsequent  transfer  agent, to issue Purchase Shares in the name of the
Buyer for the Purchase Shares (the "Irrevocable  Transfer Agent  Instructions").
The Company warrants to the Buyer that no instruction other than the Irrevocable
Transfer Agent Instructions  referred to in this Section 5, will be given by the
Company to the Transfer  Agent with respect to the Purchase  Shares and that the
Commitment  Shares  Signing  Shares and the Purchase  Shares shall  otherwise be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement and the Registration  Rights Agreement subject to the
provisions of Section 4(f) in the case of the Commitment Shares.

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

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

          (a) The Buyer shall have  executed each of the  Transaction  Documents
and delivered the same to the Company.

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

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

                                       17
<PAGE>

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

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

         (a) The Company shall have executed each of the  Transaction  Documents
and delivered the same to the Buyer.

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

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

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

         (e) The representations and warranties of the Company shall be true and
correct  in all  material  respects  (except  to the  extent  that  any of  such
representations and warranties is already qualified as to materiality in Section
3 above, in which case, such  representations  and warranties  shall be true and
correct  without further  qualification)  as of the date when made and as of the
Commencement  Date as though made at that time (except for  representations  and
warranties  that  speak  as of a  specific  date)  and the  Company  shall  have
performed, satisfied and complied with the covenants,  agreements and conditions
required by the  Transaction  Documents to be  performed,  satisfied or complied
with by the Company at or prior to the  Commencement  Date. The Buyer shall have
received a  certificate,  executed by the CEO,  President or CFO of the Company,
dated as of the Commencement  Date, to the foregoing effect in the form attached
hereto as Exhibit C.
          ----------

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

         (g) As of the Commencement Date, the Company shall have reserved out of
its  authorized and unissued  Common Stock,  solely for the purpose of effecting
purchases of Purchase Shares  hereunder,  at least  10,000,000  shares of Common
Stock.

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

                                       18
<PAGE>

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

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

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

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

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

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

         (o) The  Company  shall have  provided  the Buyer with the  information
requested by the Buyer in connection with its due diligence  requests made prior
to, or in connection  with, the  Commencement,  in accordance  with the terms of
Section 4(g) hereof.

         8. INDEMNIFICATION.

         In  consideration  of  the  Buyer's   execution  and  delivery  of  the
Transaction  Documents and acquiring the Securities hereunder and in addition to
all of the Company's  other  obligations  under the Transaction  Documents,  the
Company shall defend, protect,  indemnify and hold harmless the Buyer and all of
its  affiliates,  shareholders,  officers,  directors,  employees  and direct or
indirect   investors  and  any  of  the  foregoing   person's  agents  or  other
representatives  (including,  without  limitation,  those retained in connection
with  the  transactions  contemplated  by  this  Agreement)  (collectively,  the
"Indemnitees")  from and against any and all actions,  causes of action,  suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith  (irrespective of whether any such Indemnitee is a party to
the  action  for which  indemnification  hereunder  is  sought),  and  including

                                       19
<PAGE>

reasonable  attorneys' fees and disbursements  (the "Indemnified  Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any  misrepresentation  or breach of any  representation or warranty made by the
Company in the  Transaction  Documents or any other  certificate,  instrument or
document  contemplated  hereby  or  thereby,  (b) any  breach  of any  covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby, or
(c) any cause of action,  suit or claim brought or made against such  Indemnitee
and arising out of or resulting  from the  execution,  delivery,  performance or
enforcement of the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby,  other than with respect to Indemnified
Liabilities  which  directly and primarily  result from the gross  negligence or
willful  misconduct  of  the  Indemnitee.  To  the  extent  that  the  foregoing
undertaking  by the Company  may be  unenforceable  for any reason,  the Company
shall make the maximum  contribution to the payment and  satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law.

         9.       EVENTS OF DEFAULT.

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

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

         (b) the  suspension  from  trading or failure of the Common Stock to be
listed on the  Principal  Market for a period of three (3)  consecutive  Trading
Days;

         (c) the  delisting of the  Company's  Common  Stock from the  Principal
Market,  provided,  however, that the Common Stock is not immediately thereafter
trading on the New York Stock Exchange,  the Nasdaq National Market,  the Nasdaq
SmallCap  Market,  the Nasdaq  Bulletin  Board  Exchange or the  American  Stock
Exchange;

         (d) the failure for any reason by the Transfer  Agent to issue Purchase
Shares to the Buyer within five (5) Trading Days after the  applicable  Purchase
Date which the Buyer is entitled to receive;

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

         (f)  any  payment   default  under  any  contract   whatsoever  or  any
acceleration  prior  to  maturity  of  any  mortgage,   indenture,  contract  or
instrument  under  which there may be issued or by which there may be secured or
evidenced  any  indebtedness  for money  borrowed  by the  Company  or for money
borrowed the  repayment  of which is  guaranteed  by the  Company,  whether such

                                       20
<PAGE>

indebtedness or guarantee now exists or shall be created hereafter,  which, with
respect to any such payment  default or  acceleration  prior to maturity,  is in
excess of $1,000,000;

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

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

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

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

         10.      CERTAIN DEFINED TERMS.

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

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

         (b) "Available Amount" means initially Six Million Dollars ($6,000,000)
in the aggregate  which amount shall be reduced by the Purchase Amount each time
the Buyer purchases shares of Common Stock pursuant to Section 1 hereof.

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

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

                                       21
<PAGE>

such security on the principal  securities exchange or trading market where such
security is listed or traded as reported by Bloomberg.

         (e)  "Confidential  Information"  means any  information  disclosed  by
either  party to the other party,  either  directly or  indirectly,  in writing,
orally or by  inspection of tangible  objects  (including,  without  limitation,
documents,  prototypes,  samples,  plant and equipment),  which is designated as
"Confidential,"   "Proprietary"   or  some  similar   designation.   Information
communicated  orally  shall  be  considered  Confidential  Information  if  such
information is confirmed in writing as being Confidential Information within ten
(10) business days after the initial  disclosure.  Confidential  Information may
also  include  information  disclosed to a  disclosing  party by third  parties.
Confidential  Information shall not, however,  include any information which (i)
was publicly  known and made  generally  available in the public domain prior to
the time of disclosure by the disclosing  party; (ii) becomes publicly known and
made  generally  available  after  disclosure  by the  disclosing  party  to the
receiving party through no action or inaction of the receiving  party;  (iii) is
already in the  possession of the  receiving  party at the time of disclosure by
the  disclosing  party as shown  by the  receiving  party's  files  and  records
immediately  prior to the time of disclosure;  (iv) is obtained by the receiving
party from a third party without a breach of such third party's  obligations  of
confidentiality;  (v) is independently  developed by the receiving party without
use of or reference to the disclosing party's Confidential Information, as shown
by documents and other competent  evidence in the receiving party's  possession;
or (vi) is required by law to be disclosed by the receiving party, provided that
the receiving  party gives the  disclosing  party prompt  written notice of such
requirement  prior to such  disclosure  and  assistance  in  obtaining  an order
protecting the information from public disclosure.

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

         (g) "Floor Price" means initially $0.35,  which amount may be increased
or decreased from time to time as provided  below,  except that in no case shall
the Floor  Price be less than $0.10.  The  Company may at any time give  written
notice (a "Floor Price Change Notice") to the Buyer increasing or decreasing the
Floor Price. The Floor Price Change Notice shall be effective only for purchases
that have a Purchase  Date later than one (1) Trading  Day after  receipt of the
Floor Price  Change  Notice by the Buyer.  Any  purchase by the Buyer that has a
Purchase  Date on or prior to the first  Trading  Day after  receipt  of a Floor
Price Change Notice from the Company must be honored by the Company as otherwise
provided  herein.  The  Floor  Price  shall be  appropriately  adjusted  for any
reorganization,  recapitalization,  non-cash  dividend,  stock  split  or  other
similar transaction.

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

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

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

         (k)  "Principal  Market"  means the  Nasdaq  Over-the-Counter  Bulletin
Board;  provided  however,  that in the event the Company's Common Stock is ever
listed or traded on the Nasdaq National Market,  the Nasdaq SmallCap Market, the

                                       22
<PAGE>

Nasdaq  Bulletin  Board  Exchange,  the New York Stock  Exchange or the American
Stock  Exchange,  than the  "Principal  Market"  shall mean such other market or
exchange on which the Company's Common Stock is then listed or traded.

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

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

         (n) "Purchase Price" means, as of any date of  determination  the lower
of the  (A)  the  lowest  Sale  Price  of the  Common  Stock  on  such  date  of
determination  and (B) the  arithmetic  average of the three (3) lowest  Closing
Sale Prices for the Common Stock during the twelve (12) consecutive Trading Days
ending on the Trading Day immediately  preceding such date of determination  (to
be appropriately  adjusted for any  reorganization,  recapitalization,  non-cash
dividend, stock split or other similar transaction).

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

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

         (q)  "Transfer  Agent" means the  transfer  agent of the Company as set
forth in Section  11(f)  hereof or such other  person who is then serving as the
transfer agent for the Company in respect of the Common Stock.

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

         11. MISCELLANEOUS.

         (a) Governing Law; Jurisdiction;  Jury Trial. The corporate laws of the
             -----------------------------------------
State of Delaware shall govern all issues  concerning the relative rights of the
Company and its shareholders.  All other questions  concerning the construction,
validity,  enforcement  and  interpretation  of this  Agreement  and  the  other
Transaction  Documents  shall be governed by the  internal  laws of the State of
Illinois,  without  giving  effect  to any  choice  of law  or  conflict  of law
provision or rule (whether of the State of Illinois or any other  jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of  Illinois.  Each party  hereby  irrevocably  submits  to the  exclusive
jurisdiction of the state and federal courts sitting in the City of Chicago, for
the  adjudication  of any  dispute  hereunder  or under  the  other  Transaction
Documents  or in  connection  herewith  or  therewith,  or with any  transaction
contemplated  hereby or discussed herein,  and hereby  irrevocably  waives,  and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or  proceeding  is  brought in an  inconvenient  forum or that the venue of such
suit,  action or proceeding is improper.  Each party hereby  irrevocably  waives
personal  service of process and  consents to process  being  served in any such
suit,  action or  proceeding  by  mailing a copy  thereof  to such  party at the

                                       23
<PAGE>

address for such notices to it under this Agreement and agrees that such service
shall  constitute  good and  sufficient  service of process and notice  thereof.
Nothing  contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,  A JURY TRIAL FOR THE ADJUDICATION
OF ANY  DISPUTE  HEREUNDER  OR IN  CONNECTION  HEREWITH  OR ARISING  OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

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

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

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

         (e) Entire  Agreement;  Amendments.  With the  exception  of the Mutual
             -------------------------------
Nondisclosure  Agreement between the parties dated as of February 03, 2003, this
Agreement  supersedes  all other  prior oral or written  agreements  between the
Buyer,  the Company,  their  affiliates  and persons acting on their behalf with
respect  to  the  matters  discussed  herein,  and  this  Agreement,  the  other
Transaction  Documents and the instruments  referenced herein contain the entire
understanding  of the parties  with  respect to the matters  covered  herein and
therein and,  except as  specifically  set forth herein or therein,  neither the
Company  nor  the  Buyer  makes  any  representation,   warranty,   covenant  or
undertaking with respect to such matters.  No provision of this Agreement may be
amended  other than by an  instrument  in writing  signed by the Company and the
Buyer,  and no  provision  hereof may be waived other than by an  instrument  in
writing signed by the party against whom enforcement is sought.

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

                                       24
<PAGE>

         If to the Company:
                  iSECUREtrac Corp.
                  5022 South 114th Street, Suite 103
                  Omaha, Nebraska 68137
                  Telephone:        405-537-0022
                  Facsimile:        405-537-9847
                  Attention:        President

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

         If to the Transfer Agent:
                  Atlas Stock Transfer Company
                  5899 South State Street, Suite 24
                  Salt Lake City, UT 84107
                  Telephone:        801-266-7151
                  Facsimile:        801-262-0907
                  Attention:        Pam Gray

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

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

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

         (i)  Publicity.  The  Buyer  shall  have the  right to  approve  before
              ---------
issuance  any press  releases  or any other  public  disclosure  (including  any
filings  with the SEC) with  respect to the  transactions  contemplated  hereby;
provided,  however,  that the  Company  shall be  entitled,  without  the  prior
approval  of the Buyer,  to make any press  release or other  public  disclosure
(including  any filings  with the SEC) with respect to such  transactions  as is

                                       25
<PAGE>

required  by  applicable  law and  regulations  (although  the  Buyer  shall  be
consulted  by the  Company in  connection  with any such press  release or other
public  disclosure  prior  to its  release  and  shall be  provided  with a copy
thereof).

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

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

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

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

                  (iii)  In the  event  that  the  Commencement  shall  not have
         occurred on or before May 31,  2003,  due to the failure to satisfy the
         conditions  set forth in  Sections  6 and 7 above  with  respect to the
         Commencement  (and the  nonbreaching  party's  failure  to  waive  such
         unsatisfied condition(s)), the nonbreaching party shall have the option
         to  terminate  this  Agreement at the close of business on such date or
         thereafter without liability of any party to any other party.

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

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

                  (vi) This Agreement shall automatically  terminate on the date
         that the  Company  sells and the  Buyer  purchases  the full  Available
         Amount as provided herein,  without any action or notice on the part of
         any party.

                                       26
<PAGE>

Except as set forth in  Sections  11(k)(i)  (in  respect  of an Event of Default
under  Sections  9(g),  9(h) and 9(i))and  11(k)(vi),  any  termination  of this
Agreement  pursuant to this  Section  11(k) shall be effected by written  notice
from the Company to the Buyer, or the Buyer to the Company,  as the case may be,
setting forth the basis for the  termination  hereof.  The  representations  and
warranties  of the Company and the Buyer  contained  in Sections 2 and 3 hereof,
the indemnification  provisions set forth in Section 8 hereof and the agreements
and covenants set forth in Section 11, shall  survive the  Commencement  and any
termination of this Agreement. No termination of this Agreement shall affect the
Company's  or the  Buyer's  obligations  under this  Agreement  with  respect to
pending  purchases and the Company and the Buyer shall complete their respective
obligations with respect to any pending purchases under this Agreement.

         (l) No  Financial  Advisor,  Placement  Agent,  Broker or  Finder.  The
             --------------------------------------------------------------
Company  represents  and  warrants  to the  Buyer  that it has not  engaged  any
financial  advisor,  placement  agent,  broker or finder in connection  with the
transactions  contemplated  hereby.  The Buyer  represents  and  warrants to the
Company that it has not engaged any financial advisor,  placement agent,  broker
or finder in connection with the transactions  contemplated  hereby. The Company
shall be responsible for the payment of any fees or commissions,  if any, of any
financial advisor,  placement agent, broker or finder relating to or arising out
of the  transactions  contemplated  hereby.  The Company shall pay, and hold the
Buyer harmless  against,  any  liability,  loss or expense  (including,  without
limitation,  attorneys' fees and out of pocket  expenses)  arising in connection
with any such claim.

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

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

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

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

                                       27
<PAGE>

incurred by the Buyer,  all reasonable costs and expenses  including  attorneys'
fees  incurred in  connection  therewith,  in addition to all other  amounts due
hereunder.

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

                                    * * * * *

                                       28
<PAGE>

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

                                        THE COMPANY:
                                        ------------

                                        ISECURETRAC CORP.
                                        -----------------

                                        By:  /s/ James E. Stark
                                        -----------------------
                                        Name:  James E. Stark
                                        Title:  President

                                        BUYER:
                                        ------

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

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

                                       29
<PAGE>

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