Document:

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                                                                   Exhibit 10.3

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                              FOURTH AMENDMENT TO
                          FIRST AMENDED AND RESTATED
                  WAREHOUSING CREDIT AND SECURITY AGREEMENT
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THIS FOURTH AMENDMENT TO FIRST AMENDED AND RESTATED WAREHOUSING CREDIT AND
SECURITY AGREEMENT (this "Amendment") is entered into as of this 14th day of
July, 2000, by and between MONUMENT MORTGAGE, INC., a California corporation
(the "Company") and RESIDENTIAL FUNDING CORPORATION, a Delaware corporation
(the "Lender").

WHEREAS, the Company and the Lender have entered into a single family
revolving warehouse facility with a present Commitment Amount of $75,000,000,
to finance the origination and acquisition of Mortgage Loans as evidenced by
a Promissory Note in the principal sum of $75,000,000, dated as of August 9,
1999 (the "Note"), and by a First Amended and Restated Warehousing Credit and
Security Agreement dated as of August 9, 1999, as the same may have been
amended or supplemented (the "Agreement");

WHEREAS, the Company has requested that the Lender extend the period for
which the Commitment under the Agreement has been made, and amend certain
other terms of the Agreement, and the Lender has agreed to such extension and
amendment subject to the terms and conditions of this Amendment; and

NOW, THEREFORE, for and in consideration of the foregoing and of the mutual
covenants, agreements and conditions hereinafter set forth and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

1.     The effective date ("Effective Date") of this Amendment shall be July
16, 2000.

2.     All capitalized terms used herein and not otherwise defined shall have
their respective meanings set forth in the Agreement.

3.     All references to "The First National Bank of Chicago" are amended to
refer to "Bank One, NA."

4.     Section 1.1 of the Agreement is amended by deleting the following
definitions in their entirety and replacing them with the following
definitions:

        "ELECTRONIC ADVANCE REQUEST" means an electronic transmission through
        RFConnects Delivery containing the same information as Exhibit C-SF
        to this Agreement, together with the RFConnects Pledge Agreement,
        duly executed by the Company, and a list of the Mortgage Loans
        (including mortgagor's name, loan number and loan amount) to be
        funded with the Advance sent to the Lender by facsimile.

        "MATURITY DATE" shall mean the earlier of: (a) the close of business on
        October 15, 2000 as such date may be extended from time to time in
        writing by the Lender, in its sole discretion, on which date the
        Commitment shall expire of its own term, and without the necessity of
        action by the Lender, and (b) the date the Advances become due and
        payable pursuant to Section 8.1 below.

                                        -1-
<PAGE>

        "WET SETTLEMENT ADVANCE" means with respect to any Advance, the
        time from the date the Advance is made until the date of the
        Lender's receipt of the Collateral Documents as provided in
        Section 2.2(b) and the Exhibit referenced therein.

5.      Section 2.4(b) of the Agreement is deleted in its entirety and the
        following is substituted in lieu thereof:

             Provided no Default or Event of Default exists, the Company is
        entitled to receive a benefit in the form of an "Earnings Credit" on
        the portion of the Eligible Balances maintained in time deposit
        accounts with a Designated Bank, and the Company is entitled to
        receive a benefit in the form of an "Earnings Allowance" on the
        portion of the Eligible Balances maintained in demand deposit
        accounts with a Designated Bank.  Any Earnings Allowance shall be
        used first and any Earnings Credit shall be used second as a credit
        against accrued Designated Bank Charges, any other Miscellaneous
        Charges and fees, including, but not limited to Commitment Fees and
        Warehousing Fees, and may be used, at the Lender's option, to reduce
        accrued interest.  Any Earnings Allowance not used during the month
        in which the benefit was received shall be accumulated for use and
        must be used within 6 months of the month in which the benefit was
        received.  Provided no Default or Event of Default exists, any
        Earnings Credit not used during the month in which the benefit was
        received shall be used to provide a cash benefit to the Company.  Any
        Earnings Credit retained by the Lender as a result of a Default or
        Event of Default will be applied to the payment of the Company's
        Obligations in such order as the Lender will determine in its sole
        discretion.  The Lender's determination of the Earnings Credit and
        the Earnings Allowance for any month shall be determined by the
        Lender in its sole discretion and shall be conclusive and binding
        absent manifest error.  In no event shall the benefit received by the
        Company exceed the Depository Benefit.

             Either party hereto may terminate the benefits provided for in
        this Section effective immediately upon Notice to the other party, if
        the terminating party shall have determined (which determination
        shall be conclusive and binding absent manifest error) at any time
        that any applicable law, rule, regulation, order or decree or any
        interpretation or administration thereof by any governmental
        authority charged with the interpretation or administration thereof,
        or compliance by such party with any request or directive (whether or
        not having the force of law) of any such authority, shall make it
        unlawful or impossible for such party to continue to offer or receive
        the benefits provided for in this Section.  No Notice is required for
        a termination of benefits as a result of a Default or Event of
        Default.

6.      Section 3.3 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:

             3.3     DELIVERY OF ADDITIONAL COLLATERAL OR MANDATORY
        PREPAYMENT.  At any time that the aggregate Collateral Value of the
        Collateral then pledged hereunder is less than the aggregate amount
        of the Advances then outstanding hereunder, the Lender may request,
        and the Company shall within 2 Business Days after Notice by the
        Lender (a) deliver to the Lender for pledge hereunder additional
        Collateral with a Collateral Value sufficient to cover the difference
        between the Collateral Value of the Collateral pledged and the
        aggregate amount of Advances outstanding hereunder, and/or (b) repay
        the Advances in an amount sufficient to reduce the aggregate balance
        thereof outstanding to or below the Collateral Value of the
        Collateral pledged hereunder.

7.      Section 5.17 of the Agreement shall be deleted in its entirety and
the following shall be substituted in lieu thereof:

             5.17    YEAR 2000 COMPLIANCE.  The Company has conducted a
        comprehensive review and assessment of the Company's computer
        applications and made inquiry of the

                                    -2-
<PAGE>

        Company's key suppliers, vendors, customers, and Investors
        with respect to the Year 2000 Problem and based on that
        review and inquiry, the Company represents and warrants that
        the Year 2000 Problem has not resulted in and will not result
        in a material adverse change in the Company's business
        condition (financial or otherwise), operations, properties or
        prospects, or ability to repay the credit.

8.      Section 7.9 of the Agreement is deleted in its entirety and the
following is substituted in lieu thereof:

             7.9    [INTENTIONALLY OMITTED].

9.      Sections 8.1(f) and 8.1(g) of the Agreement shall be deleted in their
entirety and the following shall be substituted in lieu thereof:

             8.1(f) (1) An involuntary case is filed against the Company or
        any Subsidiary or any Guarantor under any applicable bankruptcy,
        insolvency or other similar federal or state law and is not dismissed
        or the order for relief stayed within 60 days after the date of
        filing; or (2) a court of competent jurisdiction appoints a receiver
        (interim or permanent), liquidator, sequestrator, trustee, custodian
        or other officer having similar powers over the Company or any
        Subsidiary or any Guarantor, or over all or a substantial part of
        their respective properties; or

             8.1(g) (1) The Company or any Subsidiary or any Guarantor
        commences a voluntary case, under any applicable bankruptcy,
        insolvency or other similar law now or hereafter in effect; or (2)
        the Company or any Subsidiary or any Guarantor consents to the entry
        of an order for relief or similar adjudication in an involuntary
        case, or requests or consents to the conversion to an involuntary
        case under any of those laws; or (3) the Company or any Subsidiary or
        any Guarantor consents to the appointment of or possession by a
        receiver (interim or permanent), liquidator, sequestrator, trustee,
        custodian or other officer having similar powers over the Company or
        any Subsidiary or any Guarantor, or over all or a substantial part of
        their respective properties; or (4) the Company or any Subsidiary or
        any Guarantor makes an assignment for the benefit of creditors; or
        (5) the Company or any Subsidiary or any Guarantor fails, or admits
        in writing its inability, to pay its debts as those debts become due;
        or

10.     Section 8.1(u) of the Agreement is deleted in its entirety.

11.     Upon execution of this Amendment, the Company agrees to pay to the
Lender the pro rata Commitment Fee on the Commitment Amount for the time
period from the Effective Date to and including September 30, 2000.

12.     EXHIBIT I-SF to the Agreement is deleted in its entirety and replaced
with the new Exhibit I-SF attached to this Amendment.  All references in this
Amendment and the Agreement to EXHIBIT I-SF shall be deemed to refer to the
new EXHIBIT I-SF.

13.     EXHIBIT M to the Agreement is hereby deleted in its entirety and
replaced with the new EXHIBIT M attached to this Amendment.  All
references in the Agreement to EXHIBIT M shall be deemed to refer to
the new EXHIBIT M.

14.     EXHIBIT N to the Agreement is hereby deleted in its entirety and
replaced with the new EXHIBIT N attached to this Amendment.  All
references in the Agreement to EXHIBIT N shall be deemed to refer to
the new EXHIBIT N.

15.     The Company must deliver to the Lender (a) an executed original of this
Amendment; (b) an executed Certificate of Secretary with corporate resolutions;
(d) a current certified tax lien and

                                    -3-
<PAGE>

judgment search of the appropriate public records for the Company and the
Guarantor, including a search of Uniform Commercial Code financing
statements, which search shall not have disclosed the existence of any prior
Lien on the Collateral other than in favor of the Lender or as permitted
hereunder; (e) current Certificates of Good Standing of the Company; (f)
current insurance information; (g) the Commitment Fee from the Effective Date
through September 30, 2000; and (h) a $750 document production fee.

16.     The Company represents, warrants and agrees that (a) there exists no
Default or Event of Default under the Loan Documents, (b) the Loan Documents
continue to be the legal, valid and binding agreements and obligations of the
Company enforceable in accordance with their terms, as modified herein, (c)
the Lender is not in default under any of the Loan Documents and the Company
has no offset or defense to its performance or obligations under any of the
Loan Documents, (d) the representations contained in the Loan Documents
remain true and accurate in all material respects, and (e) there has been no
material adverse change in the financial condition of the Company from the
date of the Agreement to the date of this Amendment.

17.     Except as hereby expressly modified, the Agreement is otherwise
unchanged and remains in full force and effect, and the Company ratifies and
reaffirms all of its obligations thereunder.

18.     This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.

IN WITNESS WHEREOF, the Company and the Lender have caused this Amendment to
be duly executed on their behalf by their duly authorized officers as of the
day and year above written.

                                   MONUMENT MORTGAGE, INC.,
                                   a California corporation

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

                                   Its:
                                       ----------------------------

                                   RESIDENTIAL FUNDING CORPORATION,
                                   a Delaware corporation

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

                                   Its:
                                       -----------------------------

                                   -4-
<PAGE>

STATE OF _____________)
                      ) ss.
COUNTY OF ____________)

On, _____________________________, 2000 before me, a Notary Public, personally
appeared ________________________________ the ______________________________ of
MONUMENT MORTGAGE, INC., a California corporation personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person whose
name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity, and that by his/her
signature on the instrument the person, or the entity upon behalf of which
the person acted, executed the instrument.

WITNESS my hand and official seal.

                                              ---------------------------------
                                              Notary Public
               (seal)
                                              (SEAL) My Commission Expires:____

STATE OF _____________)
                      ) ss.
COUNTY OF ____________)

On, _____________________________, 2000 before me, a Notary Public, personally
appeared _______________________________ the _______________________________ of
RESIDENTIAL FUNDING CORPORATION, a Delaware corporation, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her authorized capacity, and that by his/her
signature on the instrument the person, or the entity upon behalf of which
the person acted, executed the instrument.

WITNESS my hand and official seal.

                                              ---------------------------------
                                              Notary Public
               (seal)
                                              (SEAL) My Commission Expires:____

                                     -5-
<PAGE>

                             CONSENT OF GUARANTOR
--------------------------------------------------------------------------------

The undersigned, being the Guarantor under the Guaranty dated as of August 9,
1999, hereby consents to the foregoing Amendment and the transactions
contemplated thereby and hereby modifies and reaffirms his obligations under
his Guaranty so as to include within the term "Guaranteed Debt" the
indebtedness, obligations and liabilities of the Company under this Amendment
and the Note.  The Guarantor hereby reaffirms that his obligations under his
Guaranty are separate and distinct from the Company's obligations to Lender,
and that his obligations under the Guaranty are in full force and effect, and
hereby waives and agrees not to assert any anti-deficiency protections or
other rights as a defense to his obligations under the Guaranty, all as more
fully set forth in the Guaranty, the terms of which are incorporated herein
as if fully set forth herein.

The Guarantor hereby irrevocably waives any claim or other rights that the
Guarantor may now have or hereafter acquire against the Company that arises
from the existence, payment, performance or enforcement of the Guarantor's
obligations hereunder, including any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in
any claim or remedy of the Lender against the Company or any collateral that
the Lender now has or hereafter acquires, whether or not such claim, remedy
or right arises in equity or under contract, statute or common law, including
the right to take or receive from the Company directly or indirectly, in cash
or other property or by set-off or in any manner, payment or security on
account of such claim or other right, until the Guaranteed Debt has been paid
and performed in full.  If any amount shall be paid to the Guarantor in
violation of the preceding sentence, such amount shall be deemed to have been
paid to the Guarantor for the benefit of, and held in trust for, the Lender
and shall forthwith be paid to the Lender to be credited and applied to the
Guaranteed Debt, whether matured or unmatured.  In addition, to the extent
permitted by law, the Guarantor irrevocably releases and waives any such
subrogation rights or rights of reimbursement, exoneration, contribution or
indemnity if and to the extent any such right or rights would give rise to a
claim under the U.S. Bankruptcy Code that payments or transfers to the Lender
with respect to the Guaranteed Debt constitute a preference in favor of the
Guarantor or a claim under the U.S. Bankruptcy Code that the preference is
recoverable from the Lender.

The Guarantor further agrees, upon Lender's request, to execute for the
benefit of Lender an additional guaranty in form and content acceptable to
Lender and conforming to the Guaranty in connection with the foregoing
Amendment.

                                     FiNET.COM, INC.,
                                     a Delaware corporation

                                     By:
                                         ------------------------------
                                     Its:
                                         ------------------------------

                                  -6-
<PAGE>

STATE OF _____________)
                      ) ss.
COUNTY OF ____________)
On ___________________, 2000 before me, a Notary Public, personally appeared
_________________________ the _________________ of FiNET.COM, INC., a Delaware

corporation, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument
the person, or the entity upon behalf of which the person acted, executed the
instrument.

WITNESS my hand and official seal.

                                              ---------------------------------
                                              Notary Public
               (seal)
                                              (SEAL) My Commission Expires:____

                                     -7-EXHIBIT 10.30

                         COMMON STOCK PURCHASE AGREEMENT

     This COMMON STOCK PURCHASE AGREEMENT (this "Agreement') is dated as of July
6,  2000 by and  between  Pawnbroker.com,  Inc.,  a  Delaware  corporation  (the
"Company"), and Gestrow Investments Limited (the "Purchaser").

     The parties hereto agree as follows:

                                   ARTICLE I

                                   Definitions

     Section 1.1 Certain Definitions.

     (a)  "Average  Daily  Price"  shall be the  price  based on the VWAP of the
Company's Common Stock on the Principal Market.

     (b) "Draw  Down"  shall have the  meaning  assigned to such term in Section
6.1(a) hereof.

     (c) "Draw Down Exercise Date" shall have the meaning  assigned to such term
in Section 6.1(b) hereof.

     (d) "Draw  Down  Pricing  Period"  shall mean a period of  twenty-two  (22)
consecutive Trading Days preceding a Draw Down Exercise Date.

     (e) "Effective Date" shall mean the date the Registration  Statement of the
Company covering the Shares being subscribed for hereby is declared effective.

     (f)  "Material  Adverse  Effect"  shall  mean any  effect on the  business,
operations,  properties  or financial  condition of the Company that is material
and adverse to the Company and its subsidiaries and affiliates, taken as a whole
and/or  any  condition,  circumstance,  or  situation  that  would  prohibit  or
otherwise materially interfere with the ability of the Company to perform any of
its material obligations under this Agreement.

     (g)  "Principal  Market" shall mean initially the OTC Bulletin  Board,  and
shall include the Nasdaq Stock Market,  the American  Stock  Exchange or the New
York Stock  Exchange  if the  Company  is listed  and  trades on such  market or
exchange.

     (h)  "Registration  Statement"  shall mean the  registration  statement  or
statements  under the Securities  Act of 1933, as amended,  to be filed with the
Securities and Exchange  Commission for the  registration of the Shares pursuant
to the Registration  Rights  Agreement  attached hereto as Exhibit A, which such
Registration  Rights  Agreement  shall be deemed for all  purposes  to have been
entered into in contemplation of this Agreement.

<PAGE>

     (i) "SEC Documents"  shall mean the Company's most recent Form 10-K and all
subsequent  reports filed  pursuant to the  Securities  Exchange Act of 1934, as
amended (the "Exchange Act"), through the relevant date in question.

     (j) "Shares"  shall mean,  collectively,  the shares of Common Stock of the
Company being subscribed for hereunder and those shares of Common Stock issuable
to the Purchaser upon exercise of the Warrants.

     (k)  "Threshold  Price"  is the  lowest  Average  Daily  Price at which the
Company will sell its Common Stock with respect to this Agreement if the Company
chooses to specify a Threshold  Price in any Draw Down Notice under  Section 6.1
hereof.

     (l) "Trading Day" shall mean any day on which the Principal  Market is open
for business.

     (m)  "VWAP"  shall  mean the daily  volume  weighted  average  price of the
Company on the Principal Market as reported by Bloomberg Financial using the AQR
function.

                                   ARTICLE II

                        Purchase and Sale of Common Stock

     Section 2.1 Purchase and Sale of Stock. Subject to the terms and conditions
of this  Agreement,  the Company  shall issue and sell to the  Purchaser and the
Purchaser shall purchase from the Company (i) up to Twenty-four  Million Dollars
($24,000,000) of the Company's Common Stock, no par value per share (the "Common
Stock"),  based on up to twelve  (12) Draw  Downs of up to Two  Million  Dollars
($2,000,000)  per Draw Down,  and (ii) the warrants in  accordance  with section
5.2(f).

     Section 2.2 The Shares.  The Company has  authorized  and has  reserved and
covenants to continue to reserve,  free of  preemptive  rights and other similar
contractual  rights of stockholders,  a sufficient  number of its authorized but
unissued  shares  of its  Common  Stock to cover  the  Shares  to be  issued  in
connection with all Draw Downs requested under this Agreement.  Anything in this
Agreement  to the  contrary  notwithstanding,  (i) at no time  will the  Company
request a Draw Down which would  result in the issuance of a number of shares of
Common Stock pursuant to this Agreement and the Warrants  referred to in Section
5.2(f)  which  exceeds  19.9% of the number of shares of Common Stock issued and
outstanding on the Closing Date without obtaining  stockholder  approval of such
excess issuance,  if required by the rules of the Principal Market, and (ii) the
Company may not make a Draw Down to the extent that,  after such purchase by the
Purchaser, the sum of the number of shares of Common Stock beneficially owned by
the Purchaser  and its  affiliates  would result in beneficial  ownership by the
Purchaser and its affiliates of more than 9.9% of the then outstanding shares of
Common Stock.  For purposes of the immediately  preceding  sentence,  beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
and Exchange Act of 1934, as amended.

     Section 2.3  Purchase  Price and Closing.  The Company  agrees to issue and
sell to the Purchaser and, in  consideration of and in express reliance upon the
representation, warranties,

                                       2
<PAGE>

covenants,  terms and  conditions of this  Agreement,  the  Purchaser  agrees to
purchase  that  number of the Shares to be issued in  connection  with each Draw
Down.  The  closing  under this  Agreement  shall  take place at the  offices of
Epstein  Becker & Green,  P.C.,  250 Park Avenue,  New York, New York 10177 (the
"Closing")  on such date as the  Purchaser  and the  Company may agree upon (the
"Closing  Date").  Each party  shall  deliver  all  documents,  instruments  and
writings required to be delivered by such party pursuant to this Agreement at or
prior to the Closing.

                                  ARTICLE III

                         Representations and Warranties

     Section 3.1  Representation  and  Warranties  of the  Company.  The Company
hereby makes the following  representations  and  warranties  to the  Purchaser,
except as set forth on the  Disclosure  Schedule  prepared  by the  Company  and
attached hereto:

     (a)  Organization,  Good  Standing and Power.  The Company is a corporation
duly  incorporated  and validly  existing under the laws of Delaware and has the
requisite  corporate  power to own,  lease and operate its properties and assets
and to conduct its business as it is now being  conducted.  The Company does not
have any subsidiaries  except as set forth in the SEC Documents.  The Company is
duly  qualified as a foreign  corporation to do business and is in good standing
in every  jurisdiction in which the nature of the business conducted or property
owned by it makes such  qualification  necessary  except for any jurisdiction in
which the failure to be so qualified will not have a Material  Adverse Effect on
the Company's financial condition.

     (b)  Authorization,  Enforcement.  The Company has the requisite  corporate
power and  authority to enter into and perform this  Agreement  and to issue and
sell the Shares in accordance with the terms hereof. The execution, delivery and
performance of this Agreement by the Company and the  consummation  by it of the
transactions  contemplated  hereby  and  thereby  have  been  duly  and  validly
authorized  by all  necessary  corporate  action,  and  no  further  consent  or
authorization  of the  Company  or its Board of  Directors  or  stockholders  is
required. This Agreement has been duly executed and delivered, and constitutes a
valid and binding obligation of the Company  enforceable  against the Company in
accordance  with its  terms,  except as such  enforceability  may be  limited by
applicable  bankruptcy,  insolvency,  reorganization,  moratorium,  liquidation,
conservatorship,   receivership  or  similar  laws  relating  to,  or  affecting
generally  the  enforcement  of,  creditor's  rights  and  remedies  or by other
equitable principles of general application.

     (c)  Capitalization.  The  authorized  capital stock of the company and the
shares  thereof  currently  issued and  outstanding  are as set forth in the SEC
Documents or on Schedule  3.1(c) hereto.  All of the  outstanding  shares of the
Company's Common Stock have been duly and validly  authorized and are fully-paid
and  non-assessable.  Except as set forth in this Agreement and the Registration
Rights  Agreement and as set forth in the SEC Documents,  or on Schedule  3.1(c)
hereto,  no  shares  of  Common  Stock  are  entitled  to  preemptive  rights or
registration  rights  and 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

                                       3
<PAGE>

into,  any shares of capital  stock of the Company.  Furthermore,  except as set
forth in this  Agreement  or as set forth in the SEC  Documents  or on  Schedule
3.1(c), there are no contracts, commitments,  understandings, or arrangements by
which the  Company  is or may  become  bound to issue  additional  shares of the
capital stock of the Company or options,  securities or rights  convertible into
shares  of  capital  stock  of the  Company.  Except  as  contemplated  by  this
agreement,  or as set forth by the SEC documents or on Schedule  3.1(c)  hereto,
the  Company  is  not  a  party  to  any  agreement   granting  any  unfulfilled
registration  rights to any  person  with  respect  to any of its equity or debt
securities.  The  Company  is not a party to,  and it has no  knowledge  of, any
agreement  restricting  the voting or transfer of any shares of the Common Stock
of the Company.  Except as set forth in the SEC Documents or on Schedule  3.1(c)
hereto, the offer and sale of all capital stock, convertible securities, rights,
warrants,  or options of the Company issued prior to the Closing complied in all
material respects with all applicable  Federal and state securities laws, and no
stockholder  has a right of  rescission  or damages with respect  thereto  which
would have a Material  Adverse  Effect on the Company's  financial  condition or
operating  results.  The Company has made  available to the  Purchaser  true and
correct copies of the Company's  Articles of  Incorporation  as in effect on the
date hereof (the "Articles"),  and the Company's Bylaws as in effect on the date
hereof (the "Bylaws").  The Principal  Market for the Common Stock is the OTCBB,
and the  Company  has not  received  any  unresolved  notice  from  such  market
questioning or threatening  the continued  inclusion of the Common Stock on such
market.

     (d) Issuance of Shares.  The Shares to be issued under this  Agreement have
been duly  authorized  by all necessary  corporate  action and, when paid for or
issued in accordance  with the terms hereof,  the Shares shall be validly issued
and  outstanding,  fully paid and  non-assessable,  and the  Purchaser  shall be
entitled to all rights accorded to a holder of Common Stock.

     (e) No Conflicts. The execution, delivery and performance of this Agreement
by the  Company  and  the  consummation  by  the  Company  of  the  transactions
contemplated  herein  do not and  will  not (i)  violate  any  provision  of the
Company's Articles or Bylaws, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default)  under,
or  give to  others  any  rights  of  termination,  amendment,  acceleration  or
cancellation of, any agreement,  mortgage, deed of trust, indenture, note, bond,
license,  lease  agreement,  instrument  or obligation to which the Company is a
party,  (iii) create or impose a lien,  charge or encumbrance on any property of
the Company  under any  agreement  or any  commitment  to which the Company is a
party or by which  the  Company  is  bound  or by  which  any of its  respective
properties  or assets are bound,  or (iv) result in a violation  of any Federal,
state,  local or other foreign statute,  rule,  regulation,  order,  judgment or
decree  (including  any  Federal  and  state  securities  laws and  regulations)
applicable to the Company or any of its subsidiaries or by which any property or
asset of the Company or any of its subsidiaries  are bound or affected,  except,
in  all  cases,   for  such  conflicts,   defaults,   termination,   amendments,
accelerations, cancellations and violations as would not, individually or in the
aggregate,  have a Material Adverse Effect.  The business of the Company and its
subsidiaries  is not being  conducted in violation  of any laws,  ordinances  or
regulations of any  governmental  entity,  except for possible  violations which
singularly  or in the  aggregate  do not and will not  have a  Material  Adverse
Effect. The Company is not required under any Federal,  state or local law, rule
or  regulation  to obtain any  consent,  authorization  or order of, or make any
filing or registration

                                       4
<PAGE>

with, any court or  governmental  agency in order for it to execute,  deliver or
perform  any of its  obligations  under  this  Agreement,  or issue and sell the
Shares in accordance  with the terms hereof (other than any filings which may be
required  to be made by the  Company  with any  exchange  or market on which the
Common  Stock is  listed,  with the  Securities  and  Exchange  Commission  (the
"Commission"),  or state securities administrators subsequent to the Closing and
any registration  statement which may be filed pursuant hereto);  provided that,
for purpose of the representation made in this sentence, the Company is assuming
and relying upon the accuracy of the relevant  representations and agreements of
the Purchaser herein.

     (f) Commission  Documents,  Financial  Statements.  The Common Stock of the
Company is registered  pursuant to Section 12(g) of the Securities  Exchange Act
of 1934, as amended (the "Exchange  Act"),  and,  except as disclosed in the SEC
Documents  or on Schedule  3.1(f)  hereto,  the  Company has filed all  reports,
schedules, forms, statements and other documents required to be filed by it with
the  Commission  pursuant to the  reporting  requirements  of the Exchange  Act,
including  material filed pursuant to Section 13(a) or 15(d) of the Exchange Act
and has timely  filed all such  reports  required to be filed  within the twelve
month period prior to the date of this Agreement (all of the foregoing including
filings  incorporated  by  reference  therein  being  referred  to herein as the
"Commission  Documents").  The Company has made  available to the Purchaser true
and complete copies of the Commission  Documents filed with the Commission since
December 31, 1998. The Company has not provided to the Purchaser any information
which,  according  to  applicable  law,  rule or  regulation,  should  have been
disclosed  publicly by the Company  but which has not been so  disclosed,  other
than with respect to the  transactions  contemplated  by this  Agreement.  As of
their respective dates, the SEC Documents complied in all material respects with
the  requirements  of the  Exchange  Act and the  rules and  regulations  of the
Commission promulgated thereunder applicable to such documents, and, as of their
respective  dates the SEC  Documents  did not contain any untrue  statement of a
material fact or omit 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.  The  financial  statements of the
Company  included in the Commission  Documents comply as to form in all material
respects with  applicable  accounting  requirements  and the published rules and
regulations of the Commission or other  applicable  rules and  regulations  with
respect thereto. Such financial statements have been prepared in accordance with
generally accepted accounting  principles ("GAAP") applied on a consistent basis
during the periods  involved  (except (i) as may be otherwise  indicated in such
financial  statements  or the  notes  thereto  or (ii) in the case of  unaudited
interim  statements,  to the extent  they may not  include  footnotes  or may be
condensed or summary  statements),  and fairly present in all material  respects
the  financial  position  of the Company  and its  subsidiaries  as of the dates
thereof and the results of operations  and cash flows for the periods then ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments).

     (g) No Material  Adverse Change.  Since March 31, 2000, the Company has not
experienced or suffered any Material Adverse Effect, except as disclosed in such
SEC Documents or on Schedule 3.1(g) hereof.

     (h) No Undisclosed Liabilities. Except as disclosed in the SEC Documents or
on Schedule 3.1(h) hereto, the Company has no liabilities,  obligations,  claims
or losses (whether liquidated or unliquidated,  secured or unsecured,  absolute,
accrued, contingent or otherwise) that

                                       5
<PAGE>

would be required to be disclosed on a balance  sheet of the Company  (including
the notes  thereto)  in  conformity  with GAAP  which are not  disclosed  in the
Commission  Documents,  other than those incurred in the ordinary  course of the
Company's business since such date and which,  individually or in the aggregate,
do not or would not have a Material Adverse Effect on the Company.

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

     (j) Indebtedness. The SEC Documents or Schedule 3.1(j) hereto sets forth as
of the date hereof on a consolidated basis all outstanding secured and unsecured
Indebtedness of the Company,  or for which the Company has commitments.  For the
purposes of this  Agreement,  "Indebtedness"  shall mean (a) any liabilities for
borrowed money or amounts owed in excess of $250,000  (other than trade accounts
payable  incurred  in the  ordinary  course of  business),  (b) all  guaranties,
endorsements  and contingent  obligations in respect of  Indebtedness of others,
whether  or not the same are or should be  reflected  in the  Company's  balance
sheet (or the notes  thereto),  except  guaranties by  endorsement of negotiable
instruments  for deposit or collection or similar  transactions  in the ordinary
course of business; and (c) the present value of any lease payments in excess of
$250,000 due under leases  required to be capitalized  in accordance  with GAAP.
The Company is not in default with respect to any Indebtedness.

     (k) Title to Assets. To the best knowledge of the Company,  the Company has
the right to use all of its tangible assets, either through ownership,  lease or
license from third  parties,  and there are no material  defaults by the Company
under the terms of any lease or license which  individually or in the aggregate,
would have a Material Adverse Effect.

     (l) Actions  Pending.  There is no action,  suit,  claim,  investigation or
proceeding  pending or, to the knowledge of the Company,  threatened against the
Company  which  questions  the validity of this  Agreement  or the  transactions
contemplated  hereby  or any  action  taken or to be taken  pursuant  hereto  or
thereto.  Except as set forth in the SEC Documents or on Schedule 3.1(l) hereto,
there is no action, suit, claim,  investigation or proceeding pending or, to the
knowledge of the Company, threatened, against or involving the Company or any of
its properties or assets, which, individually or in the aggregate, if determined
adversely to the Company,  could have a Material  Adverse  Effect.  There are no
outstanding  orders,  judgments,  injunctions,  awards or  decrees of any court,
arbitrator or governmental or regulatory body against the Company.

     (m)  Compliance  with Law.  The  business  of the  Company  has been and is
presently being conducted in accordance with all applicable  Federal,  state and
local governmental laws, rules, regulations and ordinances,  except as set forth
in the SEC  Documents or on Schedule  3.1(m)  hereto or such that do not cause a
Material  Adverse  Effect.  The Company has all franchises,  permits,  licenses,
consents and other  governmental  or  regulatory  authorizations  and  approvals
necessary  for the  conduct of its  business as now being  conducted  unless the
failure  to possess  such  franchises,  permits,  licenses,  consents  and other
governmental

                                       6
<PAGE>

or regulatory  authorizations  and approvals,  individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

     (n) Taxes.  Except as set forth in the SEC Documents or on Schedule  3.1(n)
hereto,  the Company has  accurately  prepared and filed all Federal,  state and
other tax returns required by law to be filed by it, has paid or made provisions
for the payment of all taxes shown to be due and all additional assessments, and
adequate  provision  have been and are reflected in the financial  statements of
the  Company  for all  current  taxes and other  charges to which the Company is
subject and which are not  currently  due and  payable.  Except as  disclosed on
Schedule  3.1(n)  hereto,  none of the Federal income tax returns of the Company
for the years  subsequent to December 31, 1996 have been audited by the Internal
Revenue  Service.  The Company has no knowledge of any  additional  assessments,
adjustments  or contingent tax liability  (whether  federal or state) pending or
threatened  against the  Company  for any period,  nor of any basis for any such
assessment,  adjustment or contingency which,  individually or in the aggregate,
could have a Material Adverse Effect.

     (o) Certain Fees.Except for the fees of Ladenburg Thalmann & Co. Inc. or as
set forth on Schedule 3.1(o) hereto, no brokers,  finders or financial  advisory
fees  or  commissions  will  be  payable  by the  Company  with  respect  to the
transactions contemplated by this Agreement.

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

     (q) Operation of Business.  Except as set forth in Schedule 3.1(q),  to the
best knowledge of the Company, the Company owns or possesses valid rights to use
all patents,  trademarks,  service marks, trade names, copyrights,  licenses and
authorizations and all rights with respect to the foregoing, which are necessary
for the conduct of its business as now conducted,  without,  to the knowledge of
the Company, any conflict with the rights of others.

     (r) Regulatory  Compliance.  Except as disclosed in the SEC Documents or on
Schedule  3.1(r)  hereto,  the  Company has  obtained  all  material  approvals,
authorizations,  certificates,  consents,  licenses, orders and permits or other
similar  authorizations  of all  governmental  authorities,  or from  any  other
person,  the failure of which to obtain could have a Material  Adverse Effect on
the Company's business as currently conducted.

     (s) Books and Records.  The records and documents of the Company accurately
reflect in all material respects the information relating to the business of the
Company,  the  location  and  collection  of its  assets,  and the nature of all
transactions  giving  rise to the  obligations  or  accounts  receivable  of the
Company.

     (t) Material  Agreements.  Except as set forth in the SEC Documents,  or on
Schedule 3.1(t) hereto, neither the Company nor any subsidiary is a party to any
written or oral

                                       7
<PAGE>

contract, instrument, agreement, commitment,  obligation, plan or arrangement, a
copy of which would be required to be filed with the Commission as an exhibit to
a registration  statement on Form S-1 or other  applicable  form  (collectively,
"Material  Agreements")  if the Company were  registering  securities  under the
Securities Act of 1933, as amended (the  "Securities  Act").  The Company has in
all material  respects  performed  all the material  obligations  required to be
performed by it to date under the foregoing  agreements,  has received no notice
of default  and, to the best of the  Company's  knowledge,  is not  presently in
default under any Material  Agreement  now in effect,  the result of which could
cause a Material  Adverse  Effect.  No written  or oral  contract,  instruments,
agreement, commitment,  obligation, plan or arrangement of the Company or of any
subsidiary  limits or shall  limit the  payment of  dividends  on the  Company's
Common Stock.

     (u) Transactions with Affiliates.  Except as set forth in the SEC Documents
or on Schedule 3.1(u) hereto, there are no loans, leases, agreements, contracts,
royalty  agreements,  management  contracts or arrangements or other  continuing
transactions exceeding $100,000 between (a) the Company, or any of its customers
or suppliers on the one hand, and (b) on the other hand, any officer,  employee,
or  director  of the  Company,  or any person  owning any  capital  stock of the
Company  or any  member  of the  immediate  family  of such  officer,  employee,
director or  stockholder or any  corporation or other entity  controlled by such
officer, employee,  director or stockholder, or a member of the immediate family
of such officer, employee, director or stockholder.

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

     (w) Governmental Approvals.  Except as set forth in the SEC Documents or on
Schedule  3.1(w) hereto,  and except for the filing of any notice or application
prior or subsequent to the Closing that may be required under applicable Federal
or state  securities laws or pursuant to any requirement of the Principal Market
(which if required, shall be filed on a timely basis), including the filing of a
registration   statement  or   statements   pursuant  to  this   Agreement,   no
authorization, consent, approval, license, filing or registration with any court
or   governmental   department,    commission,    board,   bureau,   agency   or
instrumentality,  domestic  or  foreign,  is or will  be  necessary  for,  or in
connection with, the execution or delivery of the Shares, or for the performance
by the Company of its obligations under this Agreement.

     (x)  Employees.  The  Company  does  not  have  any  collective  bargaining
arrangements  covering  any of its  employees,  except  as set  forth in the SEC
Documents or on Schedule  3(x) hereto.  Except as set forth in the SEC Documents
or on Schedule 3(x) hereto, to

                                       8
<PAGE>

the  best  of its  knowledge,  the  Company  is not in  material  breach  of any
employment contract, agreement regarding proprietary information, noncompetition
agreement,  nonsolicitation  agreement,  confidentiality agreement, or any other
similar contract or restrictive covenant,  relating to the right of any officer,
employee or  consultant  to be employed or engaged by the  Company.  No officer,
consultant or key employee of the Company whose termination, either individually
or in the aggregate, could have a Material Adverse Effect, has terminated or, to
the knowledge of the Company,  has any present  intention of terminating  his or
her employment or engagement with the Company.

     (y) Absence of Certain Developments. Except as provided in SEC Documents or
in Schedule 3.1(y) hereto,  since March 31, 2000 the Company has not:

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

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

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

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

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

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

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

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

          (ix) made capital  expenditures or commitments therefor that aggregate
in excess of $ 2,000,000;

                                       9
<PAGE>

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

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

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

          (xiii)  effected any two or more events of the foregoing kind which in
the aggregate would be material to the Company.

     (z) Use of Proceeds.  The proceeds from the sale of the Shares will be used
by the Company for general corporate  purposes.

     (aa)  Acknowledgment  Regarding  Purchaser's  Purchase  of Shares.  Company
acknowledges and agrees that Purchaser is acting solely in the capacity of arm's
length   purchaser  with  respect  to  this   Agreement  and  the   transactions
contemplated  hereunder.  The Company further acknowledges that the Purchaser is
not acting as a financial advisor or fiduciary of the Company (or in any similar
capacity)  with  respect to this  Agreement  and the  transactions  contemplated
hereunder and any advice given by the Purchaser or any of its representatives or
agents in  connection  with this  Agreement  and the  transactions  contemplated
hereunder is merely  incidental to the Purchaser's  purchase of the Shares.  The
Company further represents to the Purchaser that the Company's decision to enter
into this Agreement has been based solely on the  independent  evaluation by the
Company and its own representatives and counsel.

     Section 3.2 Representations and Warranties of the Purchaser.  The Purchaser
hereby makes the following representations and warranties to the Company:

     (a)  Organization  and  Standing  of  the  Purchaser.  The  Purchaser  is a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the British Virgin Islands.

     (b)  Authorization  and Power.  The Purchaser  has the requisite  power and
authority  to enter into and perform this  Agreement  and to purchase the Shares
being sold to it hereunder.  The  execution,  delivery and  performance  of this
Agreement  by  Purchaser  and  the   consummation  by  it  of  the  transactions
contemplated hereby, including without limitation,  consenting to being named as
an underwriter in the Registration  Statement,  have been duly authorized by all
necessary corporate action.

     (c) No Conflicts. The execution, delivery and performance of this Agreement
and the consummation by the Purchaser of the transactions contemplated hereby or
relating  hereto  do not  and  will  not  (i)  result  in a  violation  of  such
Purchaser's  charter  documents or bylaws 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  Purchaser  is a party,  or  result  in a  violation  of any law,  rule,  or
regulation, or any order, judgment or decree of any court or governmental agency
applicable to the Purchaser or its properties (except for such

                                       10
<PAGE>

conflicts,  defaults  and  violations  as  would  not,  individually  or in  the
aggregate,  have a Material  Adverse Effect on Purchaser).  The Purchaser is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental  agency in order for it to execute,
deliver or perform any of its  obligations  under this  Agreement or to purchase
the Shares in accordance with the terms hereof,  including,  without limitation,
registering or qualifying as a broker-dealer in any jurisdiction,  provided that
for  purposes of the  representation  made in this  sentence,  the  Purchaser is
assuming  and relying  upon the  accuracy of the  relevant  representations  and
agreements of the Company herein.

     (d) Financial Risks. The Purchaser acknowledges that it is able to bear the
financial risks associated with an investment in the Shares and that it has been
given full access to such records of the Company and the subsidiaries and to the
officers of the  Company  and the  subsidiaries  as it has deemed  necessary  or
appropriate to conduct its due diligence investigation. The Purchaser is capable
of  evaluating  the risks and merits of an investment in the Shares by virtue of
its experience as an investor and its knowledge,  experience, and sophistication
in financial  and business  matters and the  Purchaser is capable of bearing the
entire loss of its investment in the Shares.

     (e)  Accredited  Investor.  The  Purchaser is an  "accredited  investor" as
defined in Regulation D promulgated under the Securities Act.

     (f) General. The Purchaser understands that the Company is relying upon the
truth   and   accuracy   of   the   representations,   warranties,   agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to
determine the suitability of the Purchaser to acquire the Shares.

     (g)  Disclosure.  To  the  best  of  Purchaser's  knowledge,  neither  this
Agreement nor any other documents,  certificates or instruments furnished to the
Company by or on behalf of the  Purchaser in  connection  with the  transactions
contemplated by this Agreement  contain any untrue  statement of a material fact
or omits to state a material fact necessary in order to make the statements made
herein or  therein,  in light of the  circumstances  under  which they were made
herein or therein, not misleading.

                                   ARTICLE IV

                                    Covenants

     Section  4.1  Covenants  of the  Company.  The Company  covenants  with the
Purchaser as follows:

     (a) Securities Compliance.  The Company shall take all necessary action and
proceedings  as may be  required  and  permitted  by  applicable  law,  rule and
regulation,  for the legal and valid  issuance of the Shares and the Warrants to
the Purchaser or subsequent holders.

     (b)  Registration  and Listing.  The Company will cause its Common Stock to
continue to be  registered  under  Sections  12(b) or 12(g) of the Exchange Act,
will comply in all respects with its reporting and filing  obligations under the
Exchange  Act,  will comply with all  requirements  related to any  registration
statement filed pursuant to this Agreement, and will not

                                       11
<PAGE>

take any action or file any document (whether or not permitted by the Securities
Act  or  the  rules  promulgated   thereunder)  to  terminate  or  suspend  such
registration  or to terminate or suspend its  reporting  and filing  obligations
under the Exchange  Act or  Securities  Act,  except as  permitted  herein.  The
Company will take all action necessary to continue the listing or trading of its
Common Stock on the  Principal  Market and will comply in all respects  with the
Company's  reporting,  filing and other obligations under the bylaws or rules of
the NASD and the Principal Market.

     (c)  Registration  Statement.  The  Company  shall  cause to be  filed  the
Registration  Statement,  which  Registration  Statement  shall  provide for the
resale by the Purchaser to the public in the United  States in  accordance  with
this Agreement.  The Company shall use commercially  reasonable efforts to cause
such  Registration  Statement  to be declared  effective  by the  Commission  as
expeditiously as practicable.  Before the Purchaser shall be obligated to accept
a Draw Down request from the Company, the Company shall have caused a sufficient
number  of shares of Common  Stock to be  registered  to cover the  Shares to be
issued in connection with such Draw Down.

     (d) Escrow  Arrangement.  The Company  and the  Purchaser  have  previously
entered  into an escrow  arrangement  with  Epstein  Becker & Green,  P.C.  (the
"Escrow Agent") attached as Exhibit B hereto respecting payment against delivery
of the Shares and the Warrants.

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

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

     (g)  Amendments.  The Company shall not amend or waive any provision of the
Articles of Incorporation or Bylaws of the Company  subsequent to the Closing in
any way that would adversely  affect the dividend rights or voting rights of the
holders of the Shares.

     (h) Other  Agreements.  The Company  shall not enter into any agreement the
terms of which such agreement  would restrict or impair the right of the Company
to perform under this Agreement or the Articles of Incorporation of the Company.

     (i) Notice of Certain Events Affecting Registration; Suspension of Right to
Request a Draw Down. The Company will immediately  notify the Purchaser upon the
occurrence  of  any of the  following  events  in  respect  of the  Registration
Statement  or related  prospectus  in respect of the Shares:  (i) receipt of any
request for additional  information  from the Commission or any other Federal or
state  governmental   authority  during  the  period  of  effectiveness  of  the
Registration  Statement  the response to which would  require any  amendments or
supplements  to the  Registration  Statement  or  related  prospectus;  (ii) the
issuance by the Commission or any other Federal or state governmental  authority
of any stop order suspending

                                       12
<PAGE>

the  effectiveness  of  the  Registration  Statement  or the  initiation  of any
proceedings for that purpose;  (iii) receipt of any notification with respect to
the suspension of the  qualification  or exemption from  qualification of any of
the Shares for sale in any  jurisdiction or the initiation or threatening of any
proceeding  for such  purpose;  (iv) the  happening  of any event that makes any
statement  made in the  Registration  Statement  or  related  prospectus  or any
document  incorporated or deemed to be incorporated  therein by reference untrue
in any  material  respect  or that  requires  the  making of any  changes in the
Registration Statement,  related prospectus or documents so that, in the case of
the  Registration  Statement,  it will not  contain  any untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein
or necessary to make the statements therein not misleading, and that in the case
of the  related  prospectus,  it will not  contain  any  untrue  statement  of a
material fact or omit to state any material  fact required to be stated  therein
or necessary to make the statements  therein,  in the light of the circumstances
under which they were made,  not  misleading;  and (v) the Company's  reasonable
determination  that a  post-effective  amendment to the  Registration  Statement
would be  appropriate;  and the Company  will  promptly  make  available  to the
Purchaser  any such  supplement  or  amendment  to the related  prospectus.  The
Company  shall not  deliver to the  Purchaser  any Draw Down  Notice  during the
continuation of any of the foregoing events.

     (j)  Consolidation;  Merger.  The Company  shall not, at any time after the
date hereof,  effect any merger or consolidation of the Company with or into, or
a transfer of all or substantially  all of the assets of the Company to, another
entity (a  "Consolidation  Event")  unless the resulting  successor or acquiring
entity (if not the Company) assumes by written instrument or by operation of law
the  obligation  to  deliver  to the  Purchaser  such  shares  of  stock  and/or
securities as the Purchaser is entitled to receive pursuant to this Agreement.

     (k) Limitation on Future Financing.  The Company agrees that, except as set
forth  below,  it will not enter into any sale of its  securities  for cash at a
discount to the current  market price until the earlier of (i) one year from the
effective date of the  Registration  Statement or (ii) sixty (60) days after the
entire  $24,000,000  of Shares has been  purchased by  Purchaser.  The foregoing
shall not prevent or limit the Company from  engaging in any sale of  securities
(i) in a registered  public offering by the Company which is underwritten by one
or more established  investment  banks,  (ii) in one or more private  placements
where the  purchasers do not have  registration  rights,  (iii)  pursuant to any
presently  existing or future  employee  benefit  plan which plan has been or is
approved by the Company's  stockholders,  (iv) pursuant to any compensatory plan
for a full-time  employee or key consultant,  (v) in connection with a strategic
partnership or other business transaction, the principal purpose of which is not
simply to raise money, or (vi) to which  Purchaser  gives its written  approval.
The  purchaser  shall have a right of first  refusal,  exercisable  within  five
Trading  Days of notice  from the  Company of the  material  terms of such other
transaction,  to  purchase  all or any  part  elected  by the  Purchaser  in any
transaction under (ii) or (vi) above.

     Section 4.2 Covenant of Purchaser. The Purchaser covenants with the Company
that the Purchaser's,  (including its affiliates), and any entity managed by the
Purchaser trading and distribution activities with respect to the Shares will be
in compliance with all applicable  state and Federal  securities laws, rules and
regulations  and  the  rules  and  regulations  of  the  Principal  Market.  The
Purchaser,  its  affiliates,  and any entity managed by the Purchaser  shall not
engage

                                       13
<PAGE>

in any short sales of the  Company's  Common Stock (as defined in SEC Rule 3b-3)
during the term of this Agreement.

                                   ARTICLE V

                      Conditions to Closing and Draw Downs

     Section 5.1  Conditions  Precedent to the Obligation of the Company to Sell
the Shares. The obligation hereunder of the Company to issue and sell the Shares
to the  Purchaser  is subject to the  satisfaction  or waiver,  at or before the
Closing, of each of the conditions set forth below. These conditions are for the
Company's  sole benefit and may be waived by the Company at any time in its sole
discretion.

     (a)  Accuracy  of  the  Purchaser's  Representations  and  Warranties.  The
representations and warranties of the Purchaser shall be true and correct in all
material  respects as of the date when made and as of the Closing and as of each
Draw Down Exercise Date as though made at that time, except for  representations
and warranties that speak as of a particular date.

     (b)  Performance  by the  Purchaser.  The Purchaser  shall have  performed,
satisfied  and complied in all material  respects  with all material  covenants,
agreements and conditions required by this Agreement to be performed,  satisfied
or complied with by the Purchaser at or prior to the Closing and as of each Draw
Down Exercise Date.

     (c) No Injunction.  No statute, rule, regulation,  executive order, decree,
ruling or injunction shall have been enacted,  entered,  promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits
the consummation of any of the transactions contemplated by this Agreement.

     Section 5.2  Conditions  Precedent to the  Obligation  of the  Purchaser to
Close.  The  obligation  hereunder of the  Purchaser to enter this  Agreement is
subject to the satisfaction or waiver, at or before the Closing,  of each of the
conditions  set forth  below.  These  conditions  are for the  Purchaser's  sole
benefit and may be waived by the Purchaser at any time in its sole discretion.

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

     (b) Performance by the Company. The Company shall have performed, satisfied
and  complied  in all  material  respects  with all  covenants,  agreements  and
conditions  required by this  Agreement to be  performed,  satisfied or complied
with by the Company at or prior to the Closing.

     (c) No Injunction.  No statute, rule, regulation,  executive order, decree,
ruling or injunction shall have been enacted,  entered,  promulgated or endorsed
by any court or

                                       14
<PAGE>

governmental   authority  of  competent   jurisdiction   which   prohibits   the
consummation of any of the transactions contemplated by this Agreement.

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

     (e) Opinions of Counsel,  Etc. At the  Closing,  the  Purchaser  shall have
received  opinions  of  counsel  to the  Company,  dated  the  date of  Closing,
substantially in the form of Exhibit C hereto,  and such other  certificates and
documents as the Purchaser or its counsel shall  reasonably  require incident to
the Closing.

     (f) Warrants.  In lieu of any minimum  drawdown  commitment by the Company,
the  Purchaser  shall receive  warrants to purchase  shares of Common Stock (the
"Warrants") at the Closing.  The Warrants shall be  substantially in the form of
Exhibit  D hereto  and  shall  represent  warrant  coverage  of 5% of the  total
commitment.

     Section 5.3  Conditions  Precedent to the  Obligation  of the  Purchaser to
Accept a Draw Down and  Purchase  the Shares.  The  obligation  hereunder of the
Purchaser to accept a Draw Down request and to acquire and pay for the Shares is
subject to the  satisfaction  or waiver,  at or before  each Draw Down  Exercise
Date, of each of the  conditions  set forth below.  The  conditions  are for the
Purchaser's  sole benefit and may be waived by the  Purchaser at any time in its
sole discretion.

     (a)  Satisfaction  of  Conditions  to  Closing.   The  Company  shall  have
satisfied,  or the  Purchaser  shall have waived,  the  conditions  set forth in
Section 5.2(b), (c) and (d) hereof and there shall have been no Material Adverse
Effect which has not been  publicly  reported  since the date of the most recent
prior Draw Down.

     (b)  Effective   Registration   Statement.   The   Registration   Statement
registering  a sufficient  number of the Shares to cover the Shares to be issued
in  connection  with such Draw Down shall have been  declared  effective  by the
Commission and shall remain effective on each Draw Down Exercise Date.

     (c) No Suspension.  Trading in the Company's  Common Stock is not suspended
by the Commission or the Principal  Market (except for any suspension of trading
of limited  duration,  which  suspension  shall be terminated prior to each Draw
Down  request),  and, at any time prior to such  request,  trading in securities
generally  as reported by Nasdaq shall not have been  suspended  or limited,  or
minimum prices shall not have been  established  on securities  whose trades are
reported by Nasdaq.

     (d) Opinion of Counsel.  The Purchaser shall have received a "down-to-date"
letter from the Company's  counsel,  confirming that there is no material change
from  the  counsel's  previously  delivered  opinion,  or else  specifying  with
particularity the reason for any change.

                                       15
<PAGE>

     (e) Future  Financing.  The Company  shall have not completed any financing
prohibited by Section 4.11 unless,  prior to the Company  delivering a Draw Down
Notice  after any such  financing,  the Company  pays the  Purchaser  the sum of
$100,000.

                                       16
<PAGE>

                                   ARTICLE VI

                                 Draw Down Terms

     Section 6.1 Draw Down Terms.  Subject to the satisfaction of the conditions
set forth in this Agreement, the parties agree as follows:

     (a) The  Company,  may, in its sole  discretion,  issue and exercise a draw
down (a "Draw Down") during each Draw Down Pricing  Period,  which Draw Down the
Purchaser will be obligated to accept.

     (b) Only one Draw Down shall be allowed in each Draw Down  Pricing  Period.
The price per share paid by the  Purchaser  shall be based on the Average  Daily
Price on each  separate  Trading Day during the Draw Down  Pricing  Period.  The
number of shares of Common Stock purchased by the Purchaser with respect to each
Draw Down shall be  determined  on a daily basis  during each Draw Down  Pricing
Period and settled at the election of the  Purchaser on a weekly basis or on the
Draw Down Exercise Date,  which shall be the first Trading Day following the end
of the Draw Down  Pricing  Period.  If the Average  Daily Price is less than the
Threshold  Price on any Trading  Day within the Draw Down  Pricing  Period,  the
Company shall not sell the Shares otherwise to be sold for such day.

     (c) There shall be a maximum of twelve  (12) Draw Downs  during the term of
this Agreement.

     (d) The Company  shall have the right to issue and  exercise a Draw Down of
up to  $2,000,000 of the  Company's  Common Stock per Draw Down,  subject to the
limitations set forth immediately below. The minimum Draw Down shall be $250,000
unless otherwise agreed by Purchaser.

     (e) The  maximum  dollar  amount  of each Draw  Down  during  any Draw Down
Pricing Period shall be limited pursuant to the following formula: Average Stock
Price:  Average of the Average Daily Prices for the 45 Trading Days prior to the
Draw Down Notice date. Average Trading Volume:  Average daily trading volume for
the 45 Trading Days prior to the Draw Down Notice date. Maximum dollar amount of
each Draw Down:  20% of (Average  Stock Price x (Average  Trading Volume x 22)).
The number of Shares of Common Stock to be issued in  connection  with each Draw
Down shall be equal to the sum of the quotients (for each trading day within the
Draw Down  Pricing  Period) of (x) 1/22nd of the Draw Down amount and (y) 88% of
the Average  Daily Price of the Common Stock on each Trading Day within the Draw
Down Pricing  Period.  If the Average Daily Price on a given Trading Day is less
than the Threshold Price, if any, then the Purchaser's Draw Down payment will be
reduced by 1/22nd  and that day shall be  withdrawn  from the Draw Down  Pricing
Period.

     (f) The Company must inform the Purchaser via facsimile  transmission as to
the amount of the Draw Down the Company wishes to exercise  before the first day
of the Draw Down Pricing  Period (the "Draw Down  Notice").  The Company may set
the Threshold Price, if

                                       17
<PAGE>

any, prior to each Draw Down request. At no time shall the Purchaser be required
to  purchase  more than the  scheduled  Draw Down  amount  for a given Draw Down
Pricing  Period so that if the  Company  chooses  not to  exercise  the  maximum
permitted  Draw Down in a given Draw Down  Pricing  Period the  Purchaser is not
obligated to purchase  more than the  scheduled  maximum  amount in a subsequent
Draw Down  Pricing  Period;  provided,  however,  that the  Purchaser's  maximum
commitment to purchase up to  $24,000,000 of Shares shall not be affected by the
Company's  election,  from Drawn  Down to Draw Down,  to Draw Down less than the
maximum $2,000,000 for any one Draw Down;  provided further,  that the Company's
right to Draw Down the entire  $24,000,000  commitment  shall never  entitle the
Company to Draw Down more than  $2,000,000  during any Draw Down Pricing  Period
nor to extend the termination date of this Agreement.

     (g) On or before three Trading Days after each Settlement  date, the Shares
purchased by the Purchaser  shall be delivered to The  Depository  Trust Company
("DTC") on the Purchaser's  behalf.  The Shares shall be credited by the Company
to the DTC account  designated by the Purchaser upon receipt by the Escrow Agent
of payment for the Draw Down into the Escrow  Agent's  trust account as provided
in the Escrow  Agreement.  The delivery of the Shares into the  Purchaser's  DTC
account  in  exchange  for  payment  therefor  shall be  referred  to  herein as
"Settlement".

                                  ARTICLE VII

                                   Termination

     Section 7.1 Termination by Mutual Consent. The term of this Agreement shall
be twelve  (12)  months  from the  initial  Draw  Down.  This  Agreement  may be
terminated at any time by mutual consent of the parties.

     Section  7.2  Other  Termination.  (a) The  Purchaser  may  terminate  this
Agreement  upon one (1)  Trading  Day's  notice if (i) an event  resulting  in a
Material  Adverse  Effect has occurred,  (ii) the Common Stock is de-listed from
the Principal Market unless such de-listing is in connection with the listing of
the Common Stock on the New York or American Stock Exchanges or the Nasdaq Stock
Market,  and (iii) the Company files for  protection  from  creditors  under any
applicable law.

     (b) The Company may  terminate  this  Agreement  upon one (1) Trading Day's
notice if the Purchaser shall fail to fund any properly noticed Draw Down within
three (3) Trading Days of the date payment for such Draw Down is due.

     Section  7.3  Effect of  Termination.  In the event of  termination  by the
company or the Purchaser, written notice thereof shall forthwith be given to the
other  party  and the  transactions  contemplated  by this  Agreement  shall  be
terminated  without  further  action  by  either  party.  If this  Agreement  is
terminated as provided in Section 7.1 or 7.2 herein, this Agreement shall become
void and of no further  force and effect,  except for  Sections 9.1 and 9.2, and
Article VIII herein.  Nothing in this Section 7.3 shall be deemed to release the
Company or the Purchaser from any liability for any breach under this Agreement,
or to impair the rights to the Company

                                       18
<PAGE>

and the  Purchaser  to compel  specific  performance  by the other  party of its
obligations under this Agreement.

                                  ARTICLE VIII

                                 Indemnification

     Section 8.1 Survival. The representations, warranties and covenants made by
each of the Company and the  Purchaser  in this  Agreement,  the  schedules  and
exhibits hereto and in each instrument,  agreement and certificate  entered into
and delivered by them pursuant to this Agreement,  shall survive the Closing and
the consummation of the transactions contemplated hereby until the expiration of
six months  from the date of the Draw Down to which such claim  applies.  In the
event of a breach or violation  of any of such  representations,  warranties  or
covenants, the party to whom such representations,  warranties or covenants have
been made  shall  have all  rights and  remedies  for such  breach or  violation
available to it under the  provisions  of this  Agreement,  irrespective  of any
investigation  made by or on  behalf  of such  party on or prior to the  Closing
Date.

     Section 8.2 General  Indemnity.  The Company  agrees to indemnify  and hold
harmless  the  Purchaser  (and  its  directors,  officers,  affiliates,  agents,
successors  and  assigns)  from and  against  any and all  losses,  liabilities,
deficiencies,  costs,  damages  and  expenses  (including,  without  limitation,
reasonable attorney's fees, charges and disbursements) incurred by the Purchaser
to  any  third  party  as a  result  of  any  inaccuracy  in or  breach  of  the
representations,  warranties  or  covenants  made  by the  Company  herein.  The
Purchaser  agrees to indemnify and hold harmless the Company and its  directors,
officers,  affiliates,  agents,  successors and assigns from and against any and
all losses, liabilities,  deficiencies,  costs, damages and expenses (including,
without  limitation,  reasonable  attorneys  fees,  charges  and  disbursements)
incurred  by the Company to any third  party as result of any  inaccuracy  in or
breach of the  representations,  warranties  or covenants  made by the Purchaser
herein.  The  indemnification  against such third-party claims shall survive any
expiration of this Agreement.

     Section   8.3   Indemnification    Procedure.   Any   party   entitled   to
indemnification  under this  Article  VIII (an  "indemnified  party")  will give
written notice to the  indemnifying  party of any matters giving rise to a claim
for  indemnification;  provided,  that the  failure  of any  party  entitled  to
indemnification  hereunder  to give notice as provided  herein shall not relieve
the indemnifying  party of its obligations under this Article VIII except to the
extent that the  indemnifying  party is actually  prejudiced  by such failure to
give  notice.  In case any  action,  proceeding  or claim is brought  against an
indemnified party in respect of which  indemnification is sought hereunder,  the
indemnifying  party  shall be  entitled  to  participate  in and,  unless in the
reasonable  judgment of counsel to the indemnified  party a conflict of interest
between it and the  indemnifying  party may exist with  respect of such  action,
proceeding  or claim,  to assume the defense  thereof  with  counsel  reasonably
satisfactory to the indemnified  party. In the event that the indemnifying party
advises  an   indemnified   party  that  it  will   contest  such  a  claim  for
indemnification  hereunder,  or fails, within thirty (30) days of receipt of any
indemnification  notice to notify,  in writing,  such person of its  election to
defend,  settle  or  compromise,  at its sole  cost  and  expense,  any  action,
proceeding or claim (or discontinues its defense at any time after it

                                       19
<PAGE>

commences such defense),  then the indemnified party may, at its option, defend,
settle or otherwise compromise or pay such action or claim. In any event, unless
and until the indemnifying  party elects in writing to assume and does so assume
the defense of any such claim,  proceeding or action,  the  indemnified  party's
costs and expenses  arising out of the defense,  settlement or compromise of any
such action,  claim or  proceeding  shall be losses  subject to  indemnification
hereunder.  The indemnified  party shall  cooperate fully with the  indemnifying
party in  connection  with any  settlement  negotiations  or defense of any such
action or claim by the indemnifying  party and shall furnish to the indemnifying
party all  information  reasonably  available  to the  indemnified  party  which
relates  to such  action  or  claim.  The  indemnifying  party  shall  keep  the
indemnified party fully apprised at all times as to the status of the defense or
any settlement  negotiations  with respect thereto.  If the  indemnifying  party
elects to defend any such action or claim,  then the indemnified  party shall be
entitled to  participate  in such defense with counsel of its choice at its sole
cost and expense.  The indemnifying party shall not be liable for any settlement
of any action,  claim or proceeding  effected without its prior written consent.
Notwithstanding  anything in this Article VIII to the contrary, the indemnifying
party shall not, without the indemnified  party's prior written consent,  settle
or compromise  any claim or consent to entry of any judgment in respect  thereof
which imposes any future  obligation on the indemnified  party or which does not
include,  as an  unconditional  term thereof,  the giving by the claimant or the
plaintiff to the indemnified party of a release from all liability in respect of
such claim. The  indemnification  required by this Article VIII shall be made by
periodic  payments of the amount thereof during the course of  investigation  or
defense,  within ten business days of when bills are received or expense,  loss,
damage or liability is incurred,  so long as the indemnified  party  irrevocably
agrees  to  refund  such  moneys if it is  ultimately  determined  by a court of
competent jurisdiction that such party was not entitled to indemnification.  The
indemnity  agreements  contained herein shall be in addition to (a) any cause of
action or similar rights of the indemnified party against the indemnifying party
or others, and (b) any liabilities the indemnifying party may be subject to.

                                   ARTICLE IX

                                  Miscellaneous

     Section 9.1 Fees and  Expenses.  The Company  shall pay all of its own fees
and  expenses  related  to the  transactions  contemplated  by  this  Agreement;
provided, that the Company shall also pay, at the Closing, attorneys' and escrow
fees and  expenses  (inclusive  of  disbursements  and  out-of-pocket  expenses)
incurred  by the  Purchaser  of  $35,000  in  connection  with the  preparation,
negotiation,  execution  and  delivery of this  Agreement  and the  transactions
contemplated  hereunder,  plus  $1,500 in  connection  with each Draw  Down.  In
addition, the Company shall pay all reasonable fees and expenses incurred by the
Purchaser in connection  with any amendments,  modifications  or waivers of this
Agreement or the  Registration  Rights  Agreement or incurred in connection with
the  enforcement  of this  Agreement  and  the  Registration  Rights  Agreement,
including,  without limitation,  all reasonable attorneys fees and expenses. The
Company  shall  pay all  stamp or other  similar  taxes  and  duties  levied  in
connection with issuance of the Shares pursuant hereto.

                                       20
<PAGE>

     Section 9.2 Specific Enforcement, Consent to Jurisdiction.

     (a) The Company and the Purchaser  acknowledge  and agree that  irreparable
damage  would occur in the event that any of the  provisions  of this  Agreement
were not performed in accordance  with their  specific  terms or were  otherwise
breached.  It is  accordingly  agreed that the  parties  shall be entitled to an
injunction or  injunctions to prevent or cure breaches of the provisions of this
Agreement  and to  enforce  specifically  the  terms  and  provisions  hereof or
thereof,  this being in addition to any other remedy to which any of them may be
entitled by law or equity.

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

     Section 9.3 Entire Agreement;  Amendment. This Agreement, together with the
Registration  Rights Agreement,  the Warrants and the Escrow Agreement  contains
the entire  understanding  of the parties  with  respect to the matters  covered
hereby and, except as specifically set forth herein, neither the Company nor the
Purchaser  makes any  representations,  warranty,  covenant or undertaking  with
respect to such matters. No provision of this Agreement may be waived or amended
other than by a written  instrument signed by the party against whom enforcement
of any such amendment or waiver is sought.

     Section  9.4  Notices.  Any  notice,  demand,   request,  waiver  or  other
communication  required or permitted to be given  hereunder  shall be in writing
and shall be  effective  (a) upon hand  delivery or  facsimile at the address or
number  designated  below (if delivered on a business day during normal business
hours where such notice is to be received),  or the first business day following
such delivery (if delivered  other than on a business day during normal business
hours where such notice is to be  received)  or (b) on the second  business  day
following  the date of  mailing  by  express  courier  service,  fully  prepaid,
addressed to such address,  or upon actual  receipt of such  mailing,  whichever
shall first occur. The addresses for such communications shall be:

If to the Company:         Pawnbroker.com, Inc.
                           85 Keystone, Suite F
                           Reno, NV 89503
                           Tel:  (775) 332-5047
                           Fax:  (775) 332-5198
                           Attn:  Neil McElwee

                                       21
<PAGE>

with a copy to:            Dorsey & Whitney LLP
                           1420 Fifth Avenue, Suite 3400
                           Seattle, WA 98101
                           Tel:  (206) 903-8800
                           Fax: (206) 903-8820
                           Attn: Kenneth Sam, Esq.

If to Purchaser:
                           C/o Dr. Dr. Batliner & Partner
                           Aeulestrasse 74
                           FI-9490 Vaduz, Liechtenstein
                           Telephone Number:  011-41-75-2360-406
                           Fax: 011-41-75-2360-405
                           Attention: Hans Gassner

with a copy to:            Epstein Becker & Green, P.C.
                           250 Park Avenue
                           New York, New York 10177
                           Telephone Number:  (212) 351-3771
                           Fax:  (212) 661-0989
                           Attention: Robert Charron

Any party  hereto may from time to time change its address for notices by giving
written  notice of such changed  address to the other party hereto in accordance
herewith.

     Section 9.5 Waivers.  No waiver by either party of any default with respect
to any provision,  condition or requirement of this Agreement shall be deemed to
be a  continuing  waiver in the  future  or a waiver  of any  other  provisions,
condition or requirement hereof, nor shall any delay or omission of any party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter.

     Section 9.6 Headings. The article,  section and subsection headings in this
Agreement  are for  convenience  only and  shall not  constitute  a part of this
Agreement  for any other  purpose and shall not be deemed to limit or affect any
of the provisions hereof.

     Section 9.7  Successors and Assigns.  This Agreement  shall be binding upon
and inure to the benefit of the parties and their  successors  and assigns.  The
rights and  obligations  of the parties  hereto may not be assigned to any other
person without the prior written consent of the other party, which consent shall
not be unreasonably  withheld or delayed.  The parties hereto may not amend this
Agreement  or any rights or  obligations  hereunder  without  the prior  written
consent of the Company and each Purchaser to be affected by the amendment. After
Closing,  the  assignment by a party to this  Agreement of any rights  hereunder
shall not affect the obligations of such party under this Agreement.

     Section 9.8 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.

                                       22
<PAGE>

     Section  9.9  Governing  Law.  This  Agreement  shall  be  governed  by and
construed in accordance with the internal laws of the State of New York, without
giving effect to the choice of law provisions.

     Section 9.10 Counterparts.  This Agreement may be executed in any number of
counterparts,  all of which taken  together  shall  constitute  one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties  hereto,  it being  understood that all
parties need not sign the same counterpart. Execution may be made by delivery by
facsimile.

     Section 9.11 Publicity.  Prior to the Closing,  neither the Company nor the
Purchaser  shall issue any press release or otherwise make any public  statement
or announcement with respect to this Agreement or the transactions  contemplated
hereby  or  the  existence  of  this  Agreement  except  as  required  by law or
regulation.  After  the  Closing,  the  Company  may  issue a press  release  or
otherwise make a public statement or announcement with respect to this Agreement
or the  transactions  contemplated  hereby or the  existence of this  Agreement;
provided,  that prior to issuing any such press release,  making any such public
statement or announcement,  unless otherwise required by law or regulation,  the
Company  obtains the prior consent of the Purchaser,  which consent shall not be
unreasonably withheld or delayed.

     Section 9.12  Severability.  The provisions of this Agreement are severable
and, in the event that any court of competent  jurisdiction shall determine that
any one or more of the  provisions or part of the  provisions  contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other  provision or part of a provision of this Agreement and this Agreement
shall be reformed and  construed as if such invalid or illegal or  unenforceable
provision,  or part of such provision,  had never been contained herein, so that
such  provisions  would be valid,  legal and  enforceable  to the maximum extent
possible.

     Section 9.13 Further Assurances. From and after the date of this Agreement,
upon the request of the  Purchaser or the  Company,  each of the Company and the
Purchaser  shall  execute  and deliver  such  instruments,  documents  and other
writings as may be  reasonably  necessary  or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.

     Section  9.14  Effectiveness  of  Agreement.  This  Agreement  shall become
effective  only upon  satisfaction  of the  conditions  precedent to the Initial
Closing set forth in Article I of the Escrow Agreement.

                                       23
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     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed by their  respective  authorize  officer as of this 6 day of July,
2000.

                                     Pawnbroker.com, Inc.

                                     By: /s/ Neil McElwee
                                         ---------------------------------------
                                         Name:   Neil McElwee
                                         Title:  CEO

                                     Gestrow Investments Limited

                                     By:
                                         ---------------------------------------
                                         Hans Gassner, Authorized Signatory

                                       24
<PAGE>

     This Agreement may be executed in any number of counterparts,  all of which
taken  together shall  constitute  one and the same  instrument and shall become
effective when  counterparts have been signed by each party and delivered to the
other parties  hereto,  it being  understood  that all parties need not sign the
same counterpart. Execution may be made by delivery by facsimile.

     If the foregoing  correctly  sets forth our  understanding  and  agreement,
please so indicate by signing where indicated below.

                                     Pawnbroker.com, Inc.

                                     By:
                                         ---------------------------------------
                                         Neil McElwee, CEO

ACCEPTED AND AGREED TO:

GESTROW INVESTMENTS LIMITED

By:  /s/ illegible
     ---------------------------------------
     Authorized Signatory

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