Document:

Exhibit 10.2

                                                          April 6, 2000

Barry Siegel
Chairman/ Chief Executive Officer
First Priority Group, Inc.
51 East Bethpage Road
Plainview, NY 11803

Dear Mr. Siegel:

The purpose of this letter agreement (the "Agreement") is to set forth the terms
and conditions  pursuant to which Ladenburg  Thalmann & Co. Inc.  ("LTCO") shall
serve as exclusive  placement agent in connection with the proposed  offering of
equity  securities  (the  "Securities")  of  First  Priority  Group,  Inc.  (the
"Company") pursuant to a registration statement,  wherein the commitment for the
offering will be for  $10,000,000  (the  "Offering").  All references to dollars
shall be to U.S. dollars. The terms of such Offering and the Securities shall be
substantially  in the form set  forth in  Exhibit  D hereto,  which  exhibit  is
incorporated by reference herein.

         Upon the terms and subject to the  conditions  of this  Agreement,  the
parties hereto agree as follows:

         1.  Appointment.  (a)  Subject  to the  terms  and  conditions  of this
Agreement  hereinafter  set forth,  the Company  hereby  retains LTCO,  and LTCO
hereby agrees to act as the Company's  exclusive  placement  agent and financial
advisor in connection  with the Offering,  effective as of the date hereof.  The
Company expressly  acknowledges and agrees that LTCO's obligations hereunder are
on a reasonable best efforts basis only and that the execution of this Agreement
does not constitute a commitment by LTCO to purchase the Securities and does not
ensure the successful  placement of the Securities or any portion thereof or the
success of LTCO with  respect to securing  any other  financing on behalf of the
Company.

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         (b)  Except  as  set  forth  below  in  this   Section  1,  during  the
effectiveness of this Agreement, neither the Company nor any of its subsidiaries
or affiliates  shall,  directly or  indirectly,  through any officer,  director,
employee,  agent  or  otherwise  (including,  without  limitation,  through  any
placement agent, broker,  investment banker,  attorney or accountant retained by
the Company or any of its  subsidiaries  or  affiliates),  solicit,  initiate or
encourage  the  submission of any proposal or offer (an  "Investment  Proposal")
from any person or entity (including any of such person's or entity's  officers,
directors,  employees,  agents  and  other  representatives)  except  for  those
entities  or  persons  listed  on  Exhibit E  relating  to any  issuance  of the
Company's  or  any  of  its  subsidiaries'  equity  securities  (including  debt
securities with any equity feature) or relating to any other transaction  having
a  similar  effect  or  result  on the  Company's  or  any of its  subsidiaries'
capitalization,  or participate in any discussions or negotiations regarding, or
furnish  to any other  person or entity  any  information  with  respect  to, or
otherwise  cooperate in any way with, or assist or participate in, facilitate or
encourage  any effort or attempt by any other  person or entity to do or seek to
do any of the  foregoing.  The Company shall  immediately  cease and cause to be
terminated any and all contacts, discussions and negotiations with third parties
regarding any Investment Proposal except for those entities or persons listed on
Exhibit  E. The  Company  shall  promptly  notify  LTCO if any  such  Investment
Proposal,  or any  inquiry or contact  with any  person or entity  with  respect
thereto,  is made. The Company shall not provide or release any information with
respect to this Agreement or the Offering except as required by law.

         (c)  Notwithstanding  anything to the contrary contained herein, in the
event that LTCO shall not provide to the  Company  within 30 days after the date
hereof, one or more qualified  institutional  investors reasonably acceptable to
the Company willing to invest in the Offering on substantially the same terms as
outlined  in the  term  sheet  marked  Exhibit  D  with  documentation  that  is
reasonably  satisfactory to the Company and its counsel,  the Company shall have
the right to terminate this Agreement upon a ten-day written notice.

         2. Fees and Compensation.  In consideration of the services rendered by
LTCO in  connection  with  the  Offering,  the  Company  agrees  to pay LTCO the
following fees and other compensation:

            (a)   1) 2% warrant  coverage on $5 million as  commitment  fee; one
                     half of which shall be payable immediately upon the initial
                     closing  which  will be the date of the  completion  of the
                     initial draw down under the  Offering and the  remainder of
                     which  shall be payable six months  after such date;  after
                     the  Company  draws  down at least  $5  million  under  the
                     Offering,  4% warrant  coverage  on the amount draw down by
                     the  Company  at each  subsequent  closing  payable  at the
                     applicable subsequent closing which will be the date of the
                     completion of the applicable subsequent draw down under the
                     Offering.  The  warrant  coverage  shall be  determined  as
                     follows:  1% *  (for  the  initial  and  six  months  later
                     closing) $5 million or (for subsequent closings) the amount
                     drawn  down by the  Company  at the  applicable  subsequent
                     closing / the volume weighted average price ("VWAP") of the

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                     Company's  common  stock  on the  trading  day  immediately
                     preceding the applicable closing. The Warrants shall have a
                     term of three years and a strike price equal to 150% of the
                     VWAP of the  Company's  common  stock  on the  trading  day
                     immediately preceding the applicable closing; and

                  2) a cash fee payable  upon the  initial  and each  subsequent
                     closing equal to 4% of the amount drawn down by the Company
                     at each such closing;  and

            (b)   Reimbursement  of reasonable and actual  expenses  incurred by
                  LTCO in connection with the Offering,  except legal fees shall
                  not exceed $35,000 in the aggregate with those legal fees paid
                  to the Investor(s) as set forth in Exhibit D herein. Such fees
                  shall be refunded by LTCO to the Company out of the first Draw
                  Down commission  otherwise payable after the Company has drawn
                  down at least $5 million.

            (c)   All amounts payable hereunder shall be paid to LTCO out of the
                  Company's  or  investor's   attorney  escrow  account  at  the
                  closing.

            (d)   Should  LTCO  provide a  qualified  institutional  investor(s)
                  reasonably  acceptable to the Company and such  investor(s) is
                  willing to invest in the  Offering on  substantially  the same
                  terms as  outlined  in the term sheet  marked  Exhibit D, with
                  documentation  that is reasonably  satisfactory to the Company
                  and  its  counsel,  and the  Company  were  to  terminate  the
                  Agreement  after April 6, 2000 or prior to March 31, 2001 (the
                  "Termination  Date"),  for reasons other than a breach of this
                  Agreement by LTCO,  the Company will pay $100,000 to LTCO as a
                  "break-up" fee.

      3.    Terms of Retention.  (a) Unless extended or terminated in writing by
            the parties hereto in accordance  with the provisions  hereof,  this
            Agreement shall remain in effect until the Termination Date of March
            31, 2001 or the full  commitment of the Offering is invested,  which
            ever is earlier.

            (b)   Notwithstanding   anything   herein  to  the   contrary,   the
                  obligation  to pay the  Fees  and  Compensation  and  Expenses
                  described in Section 2, if any, and  paragraphs 2, 6, and 8 of
                  Exhibit A and all of Exhibit B and Exhibit C attached  hereto,
                  each of which  exhibits is  incorporated  herein by reference,
                  shall survive any  termination or expiration of the Agreement.
                  It is expressly  understood  and agreed by the parties  hereto
                  that any private  financing of equity or debt or other capital
                  raising  activity  of the  Company  within  24  months  of the
                  termination  or  expiration  of  this   Agreement,   with  any
                  investors  to whom the Company was  introduced  by LTCO or who
                  was  contacted by LTCO while this  Agreement was in effect and
                  disclosed to the Company in writing, shall result in such fees
                  and compensation  being due and payable by the Company to LTCO
                  under the same terms of Section 2 above.

      4.    Right of First Refusal. Upon completion of the Offering,  LTCO shall
            have an irrevocable  right of first refusal for a period of one year
            to provide all financing

                                       3

<PAGE>

            arrangements  for  the  Company  (other  than  conventional  banking
            arrangements,  borrowing and commercial  debt financing and discrete
            unrelated transactions of not more than $250,000 where no investment
            banking  fee is being  paid).  LTCO  shall  exercise  such  right in
            writing  within five (5) business  days of receipt of a written term
            sheet describing such proposed transaction in reasonable detail.

      5.    Information.  The Company recognizes and confirms that in completing
            its engagement hereunder, LTCO will be using and relying on publicly
            available  information and on data,  material and other  information
            furnished  to LTCO by the Company or the  Company's  affiliates  and
            agents.  It is understood  and agreed that in performing  under this
            engagement,  LTCO will rely upon the accuracy and  completeness  of,
            and is not assuming any responsibility for independent  verification
            of, such publicly available information and the other information so
            furnished. Notwithstanding the foregoing, it is understood that LTCO
            will conduct a due  diligence  investigation  of the Company and the
            Company will cooperate in all respects with such  investigation as a
            condition of LTCO's obligations hereunder.

      6.    Registration.  The  Company  shall  prepare  and file with the SEC a
            registration  statement.  From time to time in  connection  with any
            particular sale of Securities, the Company will, at its own expense,
            obtain  any  registration  or  qualification  required  to sell  any
            Securities under the Blue Sky laws of any applicable  jurisdictions,
            as reasonably requested by LTCO.

      7.    No General  Solicitation.  The  Securities  will be offered  only by
            approaching  prospective  purchasers  on  an  individual  basis.  No
            general solicitation or general advertising in any form will be used
            in connection  with the offering of the  Securities.  From and after
            the  filing  of  the  registration  statement,   the  Company  shall
            pre-clear  any proposed  press release with LTCO which consent shall
            not be unreasonably withheld.

      8.    Closing.  The closing of the sale of the Securities shall be subject
            to customary closing conditions,  including the provision at closing
            by the Company of  officers'  certificates,  opinions of counsel and
            "cold comfort" letters from the Company's auditors.

      9.    Miscellaneous.  This Agreement together with the attached Exhibits A
            through E constitutes the entire understanding and agreement between
            the  parties  with  respect to its  subject  matter and there are no
            agreements  or  understandings  with  respect to the subject  matter
            hereof which are not contained in this Agreement. This Agreement may
            be  modified  only in  writing  signed  by the  party to be  charged
            hereunder.

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<PAGE>

         If the foregoing  correctly  sets forth our  agreement,  please confirm
this by signing and returning to us the duplicate copy of this letter.

         We appreciate this opportunity to be of service and are looking forward
to working with you on this matter.

                                       Very truly yours,

                                       LADENBURG THALMANN & CO. INC.

                                       By:
                                          -------------------------------------
                                          Name:
                                          Title:

Agreed to and accepted as of the date first written above:

First Priority Group, Inc.

By:
    --------------------------------------------
    Name:
    Title:

                                       5

<PAGE>

                                                                     EXHIBIT A

                          STANDARD TERMS AND CONDITIONS

1.       The Company shall promptly  provide LTCO with all relevant  information
         about the Company (to the extent  available  to the Company in the case
         of parties other than the Company)  that shall be reasonably  requested
         or  required  by  LTCO,  which  information  shall be  accurate  in all
         material respects at the time furnished.

2.       LTCO shall keep all  information  obtained  from the  Company  strictly
         confidential  except:  (a)  information  which  is  otherwise  publicly
         available, or previously known to, or obtained by LTCO independently of
         the Company and without  breach of LTCO's  agreement  with the Company;
         (b) LTCO may disclose such  information to its employees and attorneys,
         and to its other advisors and financial sources on a need to know basis
         only and shall ensure that all such employees,  attorneys, advisors and
         financial sources will keep such information strictly confidential; and
         (c) pursuant to any order of a court of competent jurisdiction or other
         governmental body or as may otherwise be required by law.

3.       The Company  recognizes that in order for LTCO to perform  properly its
         obligations  in a  professional  manner,  it is necessary  that LTCO be
         informed of and, to the extent practicable, participate in meetings and
         discussions  between the  Company  and any third party  relating to the
         matters covered by the terms of LTCO's engagement.

4.       The  Company  agrees  that any  report  or  opinion,  oral or  written,
         delivered to it by LTCO is prepared solely for its confidential use and
         shall not be  reproduced,  summarized,  or  referred  to in any  public
         document or given or  otherwise  divulged to any other  person  without
         LTCO's prior written  consent,  except as may be required by applicable
         law or regulation.

5.       No fee payable to LTCO pursuant to any other agreement with the Company
         or payable by the Company to any agent, lender or investor shall reduce
         or otherwise affect any fee payable by the Company to LTCO hereunder.

6.       The Company  represents and warrants that: (a) it has full right, power
         and  authority to enter into this  Agreement  and to perform all of its
         obligations hereunder;  (b) this Agreement has been duly authorized and
         executed and  constitutes a valid and binding  agreement of the Company
         enforceable  in  accordance  with its terms;  and (c) the execution and
         delivery of this  Agreement and the  consummation  of the  transactions
         contemplated hereby does not conflict with or result in a breach of (i)
         the  Company's  certificate  of  incorporation  or  by-laws or (ii) any
         agreement  to which  the  Company  is a party  or by  which  any of its
         property or assets is bound.

                                       6

<PAGE>

                                                           EXHIBIT A (CONTINUED)

7.       Nothing  contained in this  Agreement  shall be construed to place LTCO
         and the Company in the  relationship  of  partners or joint  venturers.
         Neither  LTCO nor the Company  shall  represent  itself as the agent or
         legal  representative of the other for any purpose whatsoever nor shall
         either  have the  power to  obligate  or bind the  other in any  manner
         whatsoever.  LTCO, in performing its services  hereunder,  shall at all
         times be an independent contractor.

8.       This  Agreement has been and is made solely for the benefit of LTCO and
         the  Company  and each of the  persons,  agents,  employees,  officers,
         directors and  controlling  persons  referred to in Exhibit B and their
         respective heirs, executors,  personal representatives,  successors and
         assigns,  and nothing  contained  in this  Agreement  shall  confer any
         rights upon, nor shall this Agreement be construed to create any rights
         in, any person  who is not party to such  Agreement,  other than as set
         forth in this paragraph.

9.       The rights and obligations of either party under this Agreement may not
         be assigned without the prior written consent of the other party hereto
         and any other purported assignment shall be null and void.

10.      All communications  hereunder,  except as may be otherwise specifically
         provided  herein,  shall  be in  writing  and  shall  be  mailed,  hand
         delivered,  or sent via facsimile and confirmed by letter, to the party
         to  whom it is  addressed  at the  following  addresses  or such  other
         address as such party may advise the other in writing:

                           To the Company:
                           Barry Siegel
                           First Priority Group, Inc.
                           51 East Bethpage Road
                           Plainview, NY 11803
                           Telephone: (516) 694-1010
                           Facsimile: (516) 694-1202

                           To LTCO:
                           Ladenburg Thalmann & Co. Inc.
                           590 Madison Avenue
                           New York, NY 10022
                           Attention:  David B. Boris
                           Telephone:  (212) 409-2000
                           Facsimile:  (212) 409-2169

All notices  hereunder  shall be effective upon receipt by the party to which it
is addressed.

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<PAGE>

                                                                     EXHIBIT B

                                 INDEMNIFICATION

         The Company agrees that it shall indemnify and hold harmless, LTCO, its
stockholders, directors, officers, employees, agents, affiliates and controlling
persons within the meaning of Section 20 of the Securities  Exchange Act of 1934
and Section 15 of the  Securities  Act of 1933,  each as amended (any and all of
whom are referred to as an  "Indemnified  Party"),  from and against any and all
losses, claims,  damages,  liabilities,  or expenses, and all actions in respect
thereof  (including,  but not limited to, all legal or other expenses reasonably
incurred  by  an  Indemnified  Party  in  connection  with  the   investigation,
preparation,  defense or settlement of any claim, action or proceeding,  whether
or not  resulting  in any  liability),  incurred by an  Indemnified  Party:  (a)
arising out of, or in connection  with, any actions taken or omitted to be taken
by the Company, its affiliates,  employees or agents, or any untrue statement or
alleged untrue statement of a material fact contained in any of the financial or
other  information   contained  in  the  registration   statement  and/or  final
prospectus  furnished  to LTCO by or on behalf of the Company or the omission or
alleged  omission of a material fact required to be stated  therein or necessary
to make the statements  therein,  in light of the circumstances under which they
were made,  not  misleading;  or (b) with  respect to,  caused by, or  otherwise
arising  out  of  any  transaction  contemplated  by  the  Agreement  or  LTCO's
performing the services contemplated hereunder;  provided,  however, the Company
will not be  liable  under  clause  (b)  hereof to the  extent,  and only to the
extent, that any loss, claim, damage, liability or expense is finally judicially
determined to have  resulted  primarily  from LTCO's  negligence or bad faith in
performing such services.

         If the indemnification  provided for herein is conclusively  determined
(by an entry of final  judgment  by a court of  competent  jurisdiction  and the
expiration  of the time or denial of the right to appeal) to be  unavailable  or
insufficient  to hold any  Indemnified  Party harmless in respect to any losses,
claims,  damages,  liabilities or expenses referred to therein, then the Company
shall  contribute  to the amounts paid or payable by such  Indemnified  Party in
such proportion as is appropriate and equitable under all  circumstances  taking
into account the relative  benefits  received by the Company on the one hand and
LTCO on the  other,  from the  transaction  or  proposed  transaction  under the
Agreement or, if allocation on that basis is not permitted under applicable law,
in such  proportion as is appropriate to reflect not only the relative  benefits
received  by the  Company  on the one hand and LTCO on the  other,  but also the
relative fault of the Company and LTCO.

         The Company  shall not settle or  compromise or consent to the entry of
any judgment in or otherwise seek to terminate any pending or threatened action,
claim,  suit or proceeding in which any Indemnified Party is or could be a party
and as to which  indemnification  or contribution could have been sought by such
Indemnified  Party hereunder  (whether or not such Indemnified  Party is a party
thereto),  unless such consent or termination includes an express  unconditional
release of such Indemnified Party, reasonably satisfactory in form and substance
to such Indemnified  Party,  from all losses,

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<PAGE>

claims, damages, liabilities or expenses arising out of such action, claim, suit
or proceeding.

         The foregoing  indemnification  and contribution  provisions are not in
lieu of, but in addition to, any rights which any Indemnified  Party may have at
common law  hereunder  or  otherwise,  and shall remain in full force and effect
following  the  expiration  or  termination  of LTCO's  engagement  and shall be
binding on any successors or assigns of the Company and successors or assigns to
all or substantially all of the Company's business or assets.

                                       9

<PAGE>

                                                                       EXHIBIT C

                                  JURISDICTION

         The Company hereby irrevocably:  (a) submits to the jurisdiction of any
court of the  State of New York in NY or  Nassau  County  or any  federal  court
sitting in the State of New York in the  Southern  District or Eastern  District
for the  purposes  of any suit,  action or other  proceeding  arising out of the
Agreement  between  the  Company  and LTCO which is  brought  by or against  the
Company or LTCO;  (b) agrees  that all claims in respect of any suit,  action or
proceeding may be heard and determined in any such court;  and (c) to the extent
that the Company has  acquired,  or  hereafter  may acquire,  any immunity  from
jurisdiction  of any such court or from any legal process  therein,  the Company
hereby waives, to the fullest extent permitted by law, such immunity.

         The Company  waives,  and the Company  agrees not to assert in any such
suit,  action or proceeding,  in each case, to the fullest  extent  permitted by
applicable law, any claim that: (a) the Company is not personally subject to the
jurisdiction of any such court; (b) the Company is immune from any legal process
(whether through service or notice, attachment prior to judgment,  attachment in
the  aid  of  execution,  execution  or  otherwise)  with  respect  to it or its
property;  (c) any such suit, action or proceeding is brought in an inconvenient
forum; (d) the venue of any such suit, action or proceeding is improper;  or (e)
this Agreement may not be enforced in or by any such court.

         Any process  against the Company in, or in connection  with,  any suit,
action or  proceeding  filed in the United  States  District  Court or any other
court of the State of New York,  arising out of or relating to this Agreement or
any transaction or agreement  contemplated  hereby, may be served on the Company
personally, or overnight courier (with the same effect as though served upon the
Company  personally)  addressed  to the  Company at the address set forth in the
Agreement between the Company and LTCO.

         Nothing in these  provisions  shall  affect any party's  right to serve
process in any manner permitted by law or limit its rights to bring a proceeding
in the competent  courts of any  jurisdiction or  jurisdictions or to enforce in
any  lawful  manner  a  judgment  obtained  in one  jurisdiction  in  any  other
jurisdiction.

         This  Agreement  shall be governed by and construed in accordance  with
the  laws  of  the  State  of New  York,  without  regard  to  conflicts  of law
principles.

                                       10Exhibit 10.3

                         COMMON STOCK PURCHASE AGREEMENT

                  This COMMON STOCK PURCHASE  AGREEMENT  (this  "Agreement")  is
dated as of May 31, 2000 by and between First Priority  Group,  Inc., a New York
corporation (the "Company"), and Suerez Enterprises 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 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 adverse
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 or the
Registration  Rights  Agreement  or to perform its  obligations  under any other
material agreement.

                        (g)  "Principal  Market" shall mean initially the Nasdaq
SmallCap Market, and shall include the American Stock Exchange,  Nasdaq National
Market or the New York  Stock  Exchange  if the  Company is listed and trades on
such market or  exchange.  Principal  Market  shall not include the OTC Bulletin
Board without the express written consent of the Purchaser.

                        (h) "Registration Statement" shall mean the registration
statement  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.

                        (i) "SEC Documents" shall mean the Company's latest Form
10-K or 10-KSB as of the time in  question,  all  Forms  10-Q or 10-QSB  and 8-K
filed  thereafter,  and the Proxy Statement for its latest fiscal year as of the
time in question  until such time as the Company no longer has an  obligation to
maintain  the  effectiveness  of a  Registration  Statement  as set forth in the
Registration Rights Agreement.

                        (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.

                                       1

<PAGE>

                        (k) "Threshold  Price" is the lowest Average Daily Price
at which the Company will sell its Common Stock with respect to this Agreement.

                        (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's  Common  Stock on the  NadaqSmall  Cap  Market or on any
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 may issue and sell to the Purchaser
and the  Purchaser  shall  purchase  from the Company up to Ten Million  Dollars
$10,000,000  of the  Company's  Common  Stock,  $0.015  par value per share (the
"Common  Stock"),  based  on up 12  Draw  Downs  of up to Five  Million  Dollars
($5,000,000) per Draw Down.

         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  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, 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,  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") within fifteen (15) days from the date hereof, or
(ii) such other time and place or 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:

                        (a)  Organization,  Good Standing and Power. The Company
is a corporation duly  incorporated  validly existing and in good standing under
the laws of the State of New York and has all requisite  corporate  authority to
own, lease and operate its properties and assets and to carry on its business as
now being conducted. The Company does not have any subsidiaries and does not own
more that fifty percent (50%) of or control any other business  entity except as
set forth in the SEC  Documents.  The Company is duly  qualified  and is in good
standing as a foreign  corporation to do business in every jurisdiction in which
the  nature  of the  business

                                       2

<PAGE>

conducted or property owned by it makes such qualification necessary, other than
those in which the  failure  so to  qualify  would not have a  Material  Adverse
Effect on the Company's financial condition.

                        (b) Authorization,  Enforcement. (i) The Company has the
requisite  corporate power and corporate authority to enter into and perform its
obligations under this Agreement,  the Registration Rights Agreement, the Escrow
Agreement and to issue the Draw Down Shares pursuant to their respective  terms,
(ii) the execution,  issuance and delivery of this Agreement,  the  Registration
Rights Agreement and the Escrow Agreement by the Company and the consummation by
it of the  transactions  contemplated  hereby have been duly  authorized  by all
necessary  corporate  action and no  further  consent  or  authorization  of the
Company or its Board of Directors or  stockholders  is required,  and (iii) this
Agreement,  the Registration Rights Agreement and the Escrow Agreement have been
duly  executed  and  delivered by the Company and at the initial  Closing  shall
constitute valid and binding  obligations of the Company enforceable against the
Company in accordance  with their 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,  creditors'  rights and remedies or by
other  equitable  principles  of general  application.  The Company has duly and
validly  authorized and reserved for issuance shares of Common Stock  sufficient
in number for the issuance of the Draw Down Shares.

                        (c) Capitalization.  The authorized capital stock of the
company  consists of  20,000,000  shares of Common  Stock,  $0.015 par value per
share, of which 8,598,467 shares are issued and outstanding and 1,000,000 shares
of  preferred  stock,  $0.01 par value per  share,  of which none are issued and
outstanding.  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  into,  any shares of  capital  stock of the  Company.  Furthermore,
except as set forth in this  Agreement  and 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 and is not a party to
any agreement granting  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 capital 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 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  Charter as in effect on the date  hereof (the
"Charter"),  and the  Company's  Bylaws  as in effect  on the date  hereof  (the
"Bylaws").  The Company has not  received any notice from the  Principal  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 Charter 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 or  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

                                       3

<PAGE>

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 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 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
timely 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  (all of the  foregoing  including  filings
incorporated  by reference  therein being referred to herein as the  "Commission
Documents").  The Company has delivered or 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, none of the SEC Documents  contained any untrue statement of a
material fact or omitted to state a material fact required to be stated  therein
or  necessary  in  order  to  make  the  statements  therein,  in  light  of the
circumstances  under  which  they  were  made,  not  misleading.  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)  Subsidiaries.  The SEC Documents or Schedule 3.1(g)
hereto sets forth each  subsidiary of the Company,  showing the  jurisdiction of
its  incorporation  or organization  and showing the percentage of each person's
ownership of the outstanding  stock or other interests of such  subsidiary.  For
the purposes of this Agreement, "subsidiary" shall mean any corporation or other
entity  of  which at  least a  majority  of the  securities  or other  ownership
interests  having ordinary  voting power  (absolutely or  contingently)  for the
election of directors or other persons  performing  similar functions are at the
time  owned  directly  or  indirectly  by the  Company  and/or  any of its other
subsidiaries.  All of the outstanding shares of capital stock of each subsidiary
have  been  duly  authorized  and  validly  issued,   and  are  fully  paid  and
non-assessable. There are no outstanding preemptive, conversion or other rights,
options,  warrants  or  agreements  granted  or  issued by or  binding  upon any
subsidiary for the purchase or acquisition of any shares of capital stock of any
subsidiary  or  any  other  securities  convertible  into,  exchangeable  for or
evidencing the rights to subscribe for any shares of such capital stock. Neither
the Company  nor any  subsidiary  is subject to any  obligation  (contingent  or
otherwise)  to  repurchase  or  otherwise  acquire  or retire  any shares of the
capital stock of any subsidiary or any convertible securities,  rights, warrants
or options of the type described in the preceding sentence.  Neither the Company
nor any  subsidiary  is a party to,  nor has any  knowledge  of,  any  agreement
restricting  the voting or transfer  of any shares of the  capital  stock of any
subsidiary.

                                       4

<PAGE>

                        (h) No Material Adverse Effect. Since December 31, 1999,
no Material  Adverse  Effect has occurred or exists with respect to the Company,
except as disclosed in the SEC Documents or on Schedule 3.1(h) hereof.

                        (i) No Undisclosed  Liabilities.  Except as disclosed in
the SEC Documents or on Schedule  3.1(i) hereto,  neither the Company nor any of
its  subsidiaries has any  liabilities,  obligations,  claims or losses (whether
liquidated or unliquidated,  secured or unsecured, absolute, accrued, contingent
or  otherwise)  that would be required to be disclosed on a balance sheet of the
Company or any subsidiary  (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  or  its  subsidiaries  respective
businesses since such date and which,  individually or in the aggregate,  do not
or would not have a Material Adverse Effect on the Company or its subsidiaries.

                        (j)  No  Undisclosed  Events  or  Circumstances.   Since
December 31, 1999, no event or circumstance  has occurred or exists with respect
to the Company or its businesses, properties, prospects, operations or financial
condition,  that,  under  applicable  law, rule or regulation,  requires  public
disclosure or announcement prior to the date hereof by the Company but which has
not been so publicly announced or disclosed in the SEC Documents.

                        (k)  Indebtedness.  The SEC Documents or Schedule 3.1(k)
hereto sets forth as of the date hereof all  outstanding  secured and  unsecured
Indebtedness of the Company or any  subsidiary,  or for which the Company or any
subsidiary has commitments.  For the purposes of this Agreement,  "Indebtedness"
shall mean (a) any  liabilities  for borrowed money or amounts owed in excess of
$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.  Neither the Company nor any subsidiary
is in default with respect to any Indebtedness.

                        (l)  Title  to  Assets.  Each  of the  Company  and  the
subsidiaries  has good  and  marketable  title  to all of its real and  personal
property reflected in the Commission Documents, free of any mortgages,  pledges,
charges,  liens,  security  interests  or other  encumbrances,  except for those
indicated in the SEC Documents or on Schedule  3.1(1) hereto or such that do not
cause  a  Material  Adverse  Effect  on the  Company's  financial  condition  or
operating  results.  All said leases of the Company and each of its subsidiaries
are valid and subsisting and in full force and effect.

                        (m) Actions Pending.  There is no action,  suit,  claim,
investigation  or  proceeding  pending  or,  to the  knowledge  of the  Company,
threatened against the Company or any subsidiary which questions the validity of
this Agreement or the transactions contemplated hereby or any action taken or to
be taken pursuant hereto or thereto. Except as set forth in the SEC Documents or
on Schedule 3.1(m) hereto,  there is no action,  suit,  claim,  investigation or
proceeding pending or, to the knowledge of the Company,  threatened,  against or
involving the Company,  any subsidiary or any of their respective  properties or
assets.  There are no  outstanding  orders,  judgments,  injunctions,  awards or
decrees of any court,  arbitrator or governmental or regulatory body against the
Company or any subsidiary.

                        (n) Compliance with Law. The business of the Company and
the  subsidiaries  has been and is presently  being conducted in accordance with
all applicable  federal,  state and local governmental laws, rules,  regulations
and  ordinances,  except as set forth in the SEC Documents or on Schedule 3.1(n)
hereto or such that do not cause a Material Adverse Effect. The Company and each
of its subsidiaries have all franchises,  permits, licenses,  consents and other
governmental  or  regulatory  authorizations  and  approvals  necessary  for the
conduct of their respective businesses as now being conducted by them unless the
failure  to possess  such  franchises,  permits,  licenses,  consents  and other
governmental or regulatory authorizations and approvals,  individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

                                       5

<PAGE>

                        (o) Taxes. The Company and each subsidiary has filed all
Tax Returns  which it is required to file under  applicable  laws;  all such Tax
Returns  are true and  accurate  and has been  prepared in  compliance  with all
applicable  laws;  the  Company  has paid all  Taxes  due and owing by it or any
subsidiary  (whether or not such Taxes are required to be shown on a Tax Return)
and have withheld and paid over to the appropriate  taxing authorities all Taxes
which it is required to withhold  from  amounts  paid or owing to any  employee,
stockholder,  creditor or other third parties;  and since December 31, 1998, the
charges,  accruals and reserves for Taxes with respect to the Company (including
any provisions for deferred income taxes)  reflected on the books of the Company
are adequate to cover any Tax liabilities of the Company if its current tax year
were treated as ending on the date hereof.

                  No claim has been made by a taxing authority in a jurisdiction
where the Company does not file tax returns  that the Company or any  subsidiary
is or may be subject to  taxation  by that  jurisdiction.  There are no foreign,
federal,  state or local tax audits or  administrative  or judicial  proceedings
pending or being  conducted  with respect to the Company or any  subsidiary;  no
information  related to Tax matters has been requested by any foreign,  federal,
state or local taxing  authority;  and,  except as disclosed  above,  no written
notice  indicating  an intent to open an audit or other review has been received
by the  Company or any  subsidiary  from any  foreign,  federal,  state or local
taxing  authority.   There  are  no  material  unresolved  questions  or  claims
concerning  the  Company's  Tax  liability.  The Company (A) has not executed or
entered into a closing  agreement  pursuant to ss. 7121 of the Internal  Revenue
Code or any  predecessor  provision  thereof or any similar  provision of state,
local or  foreign  law;  and (B) has not  agreed to or is  required  to make any
adjustments  pursuant to ss. 481 (a) of the Internal Revenue Code or any similar
provision  of state,  local or foreign  law by reason of a change in  accounting
method  initiated by the Company or any of its subsidiaries or has any knowledge
that the IRS has proposed any such adjustment or change in accounting method, or
has any application pending with any taxing authority requesting  permission for
any changes in  accounting  methods that relate to the business or operations of
the  Company.  The Company has not been a United  States real  property  holding
corporation  within the meaning of ss.  897(c)(2) of the  Internal  Revenue Code
during the applicable period specified in ss.  897(c)(1)(A)(ii)  of the Internal
Revenue Code.

                  The Company has not made an election  under ss.  341(f) of the
Internal Revenue Code. The Company is not liable for the Taxes of another person
that is not a subsidiary of the Company under (A) Treas.  Reg. ss.  1.1502-6 (or
comparable  provisions of state,  local or foreign law),  (B) as a transferee or
successor,  (C) by contract or indemnity or (D) otherwise.  The Company is not a
party to any tax sharing  agreement.  The Company has not made any payments,  is
not  obligated to make  payments  nor is it a party to an  agreement  that could
obligate it to make any payments that would not be deductible  under ss. 280G of
the Internal Revenue Code.

                  For purposes of this Section 3.1(o):

                  "IRS" means the United States Internal Revenue Service.

                  "Tax" or "Taxes" means federal, state, county, local, foreign,
or other income, gross receipts, ad valorem,  franchise,  profits, sales or use,
transfer, registration, excise, utility, environmental,  communications, real or
personal property,  capital stock, license,  payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum,  estimated and other taxes of any kind whatsoever  (including,  without
limitation, deficiencies, penalties, additions to tax, and interest attributable
thereto) whether disputed or not.

                  "Tax Return"  means any return,  information  report or filing
with respect to Taxes,  including any schedules  attached  thereto and including
any amendment thereof.

                        (p) Certain Fees. Except as set forth on Schedule 3.1(p)
hereto,  no brokers,  finders or financial  advisory fees or commissions will be
payable  by the  Company or any  subsidiary  with  respect  to the  transactions
contemplated by this Agreement.

                        (q) 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 or any subsidiary in connection  with the  transactions  contemplated by
this Agreement contain any

                                       6

<PAGE>

untruestatement  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.

                        (r)  Operation of Business.  The Company and each of the
subsidiaries  owns or possesses all patents,  trademarks,  service marks,  trade
names, copyrights, licenses and authorizations as set forth in the SEC Documents
and on Schedule  3.1(r)  hereto,  and all rights with respect to the  foregoing,
which are necessary for the conduct of its business as now conducted without any
conflict with the rights of others.

                        (s) Regulatory Compliance. The Company has all necessary
licenses,  registrations  and  permits  to  conduct  its  business  as now being
conducted in all states where the Company conducts its business.

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

                        (u) Material Agreements.  Except as set forth in the SEC
Documents,  or on Schedule 3.1(u) hereto, neither the Company nor any subsidiary
is a party to any written or oral contract, instrument,  agreement,  commitment,
obligation,  plan or arrangement,  a copy of which would be required to be filed
with the  Commission  as an exhibit to a  registration  statement on Form S-1 or
other applicable form  (collectively,  "Material  Agreements") if the Company or
any subsidiary were registering  securities under the Securities Act of 1933, as
amended (the "Securities  Act"). The Company and each of its subsidiaries has in
all material respects performed all the obligations  required to be performed by
them to date under the foregoing agreements,  have received no notice of default
and,  to the  best of the  Company's  knowledge  are not in  default  under  any
Material  Agreement  now in effect,  the result of which  could cause a Material
Adverse Effect. No written or oral contract, 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.

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

                        (w) Securities Act of 1933. The Company has complied and
will comply with all applicable  federal and state securities laws in connection
with the offer,  issuance and sale of the 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  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.

                        (x) Governmental  Approvals.  Except as set forth in the
SEC  Documents or on Schedule  3.1(x)  hereto,  and except for the filing of any
notice prior or subsequent to the Closing that may be required under  applicable
federal or state securities laws (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, exemption of,
filing or registration  with any court or governmental  department,  commission,
board,  bureau,  agency or  instrumentality,  domestic or foreign, is or will be
necessary  for, or in connection  with, the execution or delivery of the Shares,
or for the performance by the Company of its obligations under this Agreement.

                                       7

<PAGE>

                        (y)  Employees.  Neither the Company nor any  subsidiary
has any collective  bargaining  arrangements  or agreements  covering any of its
employees,  except as set forth in the SEC Documents or on Schedule 3(y) hereto.
Except as set forth in the SEC Documents or on Schedule 3(y) hereto, neither the
Company nor any  subsidiary is in 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 or such  subsidiary.  Since
the date of the December  31, 1998,  Form 10-K,  no officer,  consultant  or key
employee of the Company or any subsidiary whose termination, either individually
or in the aggregate, could have a Material Adverse Effect, has terminated or, to
the knowledge of the Company,  has any present  intention of terminating  his or
her employment or engagement with the Company or any subsidiary.

                        (z) Absence of Certain Developments.  Except as provided
in SEC Documents or in Schedule 3.1(z) hereto,  since December 31, 1999, neither
the Company nor any subsidiary has:

                             (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 or such subsidiary'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 $500,000;

                             (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;

                                       8

<PAGE>

                             (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 or its
subsidiaries.

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

                   (bb) 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 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 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  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,  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.

                                       9

<PAGE>

                        (f)  Compliance  With Law. The  Purchaser's  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.

                        (g) 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.

                                   ARTICLE IV

                                    COVENANTS

                  The Company covenants with the Purchaser as follows:

         Section 4.1 Securities Compliance.

                  The Company shall notify The NASD,  in  accordance  with their
rules and regulations,  of the transactions  contemplated by this Agreement, and
shall take all other  necessary  action and  proceedings  as may be required and
permitted  by  applicable  law,  rule and  regulation,  for the  legal and valid
issuance of the Shares and the Warrants to the Purchaser or subsequent holders.

         Section 4.2 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 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.

         Section 4.3 Registration Statement. The Company shall cause to be filed
the Registration  Statement,  which Registration Statement shall provide for the
sale of the Shares to the Purchaser and resale by the Purchaser to the public in
accordance  with this  Agreement.  The  Company  shall  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.

         Section 4.4 Escrow  Arrangement.  The Company and the  Purchaser  shall
enter into an escrow  arrangement with Epstein Becker & Green, P.C. (the "Escrow
Agent") in the Form of Exhibit B hereto  respecting  payment against delivery of
the Shares.

         Section 4.5 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.

         Section 4.6 Keeping of Records and Books of Account.  The Company shall
keep and cause each subsidiary to keep adequate records and books of account, in
which  complete  entries  will be  made in  accordance  with  GAAP  consistently
applied,   reflecting  all  financial   transactions  of  the  Company  and  its
subsidiaries,  and in which,  for each  fiscal  year,  all proper  reserves  for
depreciation, depletion, obsolescence,  amortization, taxes, bad debts and other
purposes in connection with its business shall be made.

                                       10

<PAGE>

         Section  4.7  Amendments.  The  Company  shall  not  amend or waive any
provision  the  Charter,  Bylaws of the Company in any way that would  adversely
affect  the  dividend  rights or voting  rights of the  holders  of the  Shares.
Section 4.8 Other Agreements. The Company shall not enter into any agreement the
terms of which such  agreement  would restrict or impair the right to perform of
the  Company  or any  subsidiary  under  this  Agreement  or the  Charter of the
Company.

         Section 4.9 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 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.

         Section 4.10 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.

         Section 4.11 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) twelve
(12) months from the effective date of the Registration  Statement or (ii) sixty
(60)  days  after  the  entire  $10,000,000  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  (which shall  include  piggy-back
registration rights to the Registration  Rights Agreement),  (vi) in one or more
private  placements,  the  principal  purpose of which is to raise  money for an
acquisition  (which  shall  include  piggy-back   registration   rights  to  the
Registration  Rights  Agreement) or (vii) to which  Purchaser  gives its written
approval.  Further,  the Purchaser shall have a right of first refusal, to elect
to  participate,  in such  subsequent  transaction in the case of (vi) and (vii)
above. Such right of first refusal must be exercised in writing within seven (7)
Trading Days of the Purchaser's  receipt of notice of the proposed terms of such
financing.

                                       11

<PAGE>

                                    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 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  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)  Opinion  of  Counsel,  Etc.  At  the  Closing,  the
Purchaser  shall have  received an opinion of counsel to the Company,  dated the
date of Closing,  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 a minimum Draw Down commitment
by the Company, the Purchaser shall receive a warrant certificate at the initial
closing to purchase  up to a number of shares of Common  Stock equal to $100,000
divided  by the VWAP on the  Trading  Day  immediately  prior to the date of the
Closing (the

                                       12

<PAGE>

"Initial Warrant").  One half of such Warrants shall be exercisable  immediately
and the other half shall be exercisable  six months  thereafter.  As to any Draw
Downs or any  portion of a Draw Down made by the  Company  after the Company has
drawn down, or in excess of Five Million  Dollars  ($5,000,000) in the aggregate
under this Agreement,  the Purchaser shall also receive, at each applicable Draw
Down closing, a warrant certificate  representing 4% warrant coverage (using the
same formula set forth above) of any such Draw Down or portion  thereof (each, a
"Draw Down Warrant" and collectively with the Initial Warrant,  the "Warrants").
The  term of the  Warrants  shall  be  three  (3)  years  from the date of their
issuance.  The  Strike  Price of the  Warrants  shall be 150% of the VWAP on the
Trading Days immediately prior to the applicable  closing date. The Common Stock
underlying  the  Warrants  will  be  registered  in the  Registration  Statement
referred to in Section 4.3 hereof.  The Warrants shall be in the form of Exhibit
E hereto.

         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 hereof

                        (b) Effective Registration  Statement.  The Registration
Statement  registering  the Shares  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
shall not have been suspended by the Commission or the Principal  Market (except
for any  suspension  of trading of limited  duration  agreed to by the  Company,
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 on
the Principal Market shall not have been suspended or limited, or minimum prices
shall not have been  established on securities  whose trades are reported on the
Principal Market.

                        (d) Material Adverse Effect.  No Material Adverse Effect
and no Consolidation Event shall have occurred.

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

                                   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 for a period of 12 months
after on the Effective Date.

                        (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. In connection with each Draw Down Pricing Period,  the Company may

                                        13

<PAGE>

set an Average Daily Price below which the Company will not sell any Shares (the
"Threshold  Price").  If the Average Daily Price on any day within the Draw Down
Pricing Period is less than the Threshold  Price, the Company shall not sell and
the  Purchaser  shall not be obligated  to purchase  the Shares  otherwise to be
purchased for such day, except that, the Purchaser may, in its sole  discretion,
purchase any such Shares at the Threshold Price.

                        (c) The  minimum  Draw Down  shall be  $250,000,  unless
otherwise agreed by Purchaser.

                        (d) 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 22 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) 90% 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,  then the Purchaser's  Draw
Down will be  reduced by 1/22nd  and that day shall be  withdrawn  from the Draw
Down Pricing Period.

                        (e) The Company must inform the  Purchaser by delivering
a Draw Down Notice, in the form of Exhibit D hereto, 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 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.  Notwithstanding  the above, in
no event shall the maximum  Draw Down dollar  amount be less than $1 million per
month.

                        (f) On or before  three (3) Trading Days after each Draw
Down Exercise 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 Escrow  Agent shall be
directed to pay 96% of the purchase  price to the  Company,  net of One Thousand
Five Hundred Dollars  ($1,500) as escrow expenses to the Escrow Agent, and 4% to
the placement agent. 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.  This  Agreement  may be  terminated at any time by
mutual consent of the parties.

         Section 7.2 Other  Termination.Section  7.3 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 Nasdaq  National  Market,  Nasdaq SmallCap  Market,  the
American Stock Exchange or the New York Stock Exchange,  (iii) the Company files
for  protection  from  creditors  under any  applicable  law,  (iv) the  Company
completes  any  financing  prohibited  by  Section  4.11,  (v) the  Registration
Statement is not  effective  by September  30, 2000 or (vi) or in the event that
the  officers  and  directors  of the  Company  shall  own less  than 35% of the
outstanding  Common Stock of the Company that such officers and directors of the
Company own on the date hereof.

                                       14

<PAGE>

                  The  Company may  terminate  this  Agreement  (i) upon one (1)
Trading Day's notice if the Purchaser  shall fail to fund more than one 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  and the  Purchaser  to compel  specific
performance by the other party of its obligations under this Agreement.

                                  ARTICLE VIII

                                 INDEMNIFICATION

         Section 8.1 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
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  as result of any
inaccuracy in or breach of the representations,  warranties or covenants made by
the  Purchaser  herein.  Notwithstanding  anything to the contrary  herein,  the
Purchaser  shall be liable  under this  Section 8.1 for only that amount as does
not exceed the net proceeds to such  Purchaser as a result of the sale of Shares
pursuant to the Registration Statement.

         Section  8.2   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 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

                                       15

<PAGE>

unconditional  term thereof,  the giving by the claimant or the plaintiff to the
indemnified  party of a release from all liability in respect of such claim. The
indemnification required by this Article VIII shall be made by periodic payments
of the amount thereof during the course of investigation or defense, as and when
bills are received or expense, loss, damage or liability is incurred, within ten
(10) Trading Days of written notice thereof to the indemnifying party 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 fees and
expenses related to the transactions  contemplated by this Agreement;  provided,
that the Company  shall pay, at the Closing,  all  attorneys and escrow fees and
expenses (exclusive of disbursements and out-of-pocket expenses) incurred by the
Purchaser of $10,000 in connection with the preparation,  negotiation, execution
and delivery of this Agreement and the transactions  contemplated  hereunder. 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.

         Section  9.2  Specific  Enforcement.  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.

         Section 9.3 Entire Agreement;  Amendment. This Agreement, together with
the Registration  Rights Agreement 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:        51 East Bethpage Road
                                            Plainview, NY 11803
                                            Telephone (516) 694-1010
                                            Fax: (516) 694-1202
                                            Attention:  Barry Siegel

                  With copies to:           Muenz Meritz P.C.
                                            3 Hughes Place
                                            Dix Hills, N.Y.  11746

                                       16

<PAGE>

                                            Tel:  (631) 242-7384
                                            Fax:  (631) 242 6715
                                            Attention:  Lawrence A. Muenz

                  If to Purchaser:          c/o Dr. Dr. Batliner & Partner
                                            Aeulestrasse 74
                                            FL-9490 Vaduz, Liechtenstein
                                            Telephone Number:_______
                                            Fax: 011-075-236-0405
                                            Attention: Hans Gassner

                  with copies to:           Epstein Becker & Green P.C.
                                            250 Park Avenue
                                            New York, New York  10177-1211
                                            Telephone:  (212) 351-3771
                                            Attention:  Robert F. 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 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.

         Section 9.9 Governing  Law/Arbitration.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.  Any dispute under this
Agreement or any Exhibit attached hereto shall be submitted to arbitration under
the American Arbitration Association (the "AAA") in New York City, New York, and
shall be finally  and  conclusively  determined  by the  decision  of a board of
arbitration  consisting  of three (3)  members  (hereinafter  referred to as the
"Board of  Arbitration")  selected as according to the rules  governing the AAA.
The Board of  Arbitration  shall meet on  consecutive  business days in New York
City, New York,  and shall reach and render a decision in writing  (concurred in
by a majority of the members of the Board of  Arbitration)  with  respect to the
amount,  if any, which the losing party is required to pay to the other party in
respect of a claim filed. In connection with rendering its decisions,  the Board
of Arbitration  shall adopt and follow the laws of the State of New York. To the
extent  practical,  decisions of the Board of  Arbitration  shall be rendered no
more than thirty (30) calendar days following  commencement of proceedings  with
respect thereto. The Board of Arbitration shall cause its written decision to be
delivered to all parties involved in the dispute. The Board of Arbitration shall
be  authorized  and is  directed to enter a default  judgment  against any party
refusing to participate in the arbitration  proceeding within thirty days of any
deadline for such  participation.  Any decision made by the Board of Arbitration
(either  prior to or after the  expiration  of such  thirty  (30)  calendar  day
period)  shall be final,  binding and  conclusive on the parties to the dispute,
and entitled to be enforced to the fullest  extent  permitted by law and entered
in

                                       17

<PAGE>

any court of competent  jurisdiction.  The prevailing party shall be awarded its
costs,  including  attorneys' fees, from the non-prevailing party as part of the
arbitration award. Any party shall have the right to seek injunctive relief from
any court of competent  jurisdiction in any case where such relief is available.
The  prevailing  party in such  injunctive  action  shall be awarded  its costs,
including attorney's fees, from the non-prevailing party.

         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.  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,  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.  Section 9.15 This Agreement
shall become effective only upon satisfaction of the conditions precedent to the
Closing in Article I of the Escrow Agreement.

                                       18

<PAGE>

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

                                         First Priority Group, Inc.

                                         By: /s/ Barry Siegel
                                            -----------------------------------
                                             Barry Siegel, Chairman & CEO

                                         Suerez Enterprises Limited

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

                                       19

<PAGE>

                                                                      EXHIBIT B

                                ESCROW AGREEMENT

                  THIS ESCROW AGREEMENT (this "Agreement") is made as of May 31,
2000, by and among First Priority Group, Inc., a corporation  incorporated under
the laws of New York, (the "Company"), Suerez Enterprises Limited ("Purchaser"),
and Epstein  Becker & Green,  P.C.,  having an address at 250 Park  Avenue,  New
York,  NY 10177 (the  "Escrow  Agent").  Capitalized  terms used but not defined
herein shall have the meanings set forth in the Common Stock Purchase  Agreement
referred to in the first recital.

                  WHEREAS,  the Purchaser will from time to time as requested by
the Company,  purchase shares of the Company's  Common Stock from the Company as
set  forth in that  certain  Common  Stock  Purchase  Agreement  (the  "Purchase
Agreement")  dated the date hereof between the Purchaser and the Company,  which
will be  issued  as per the terms and  conditions  contained  herein  and in the
Purchase Agreement; and

                  WHEREAS, the Company and the Purchaser have requested that the
Escrow  Agent hold in escrow  and then  distribute  the  initial  documents  and
certain  funds  which  are  conditions  precedent  to the  effectiveness  of the
Purchase Agreement, and have further requested that upon each exercise of a Draw
Down, the Escrow Agent hold the relevant  documents and the applicable  purchase
price pending receipt by Purchaser of certificates  representing  the securities
issuable upon such Draw Down;

                  NOW,  THEREFORE,  in consideration of the covenants and mutual
promises contained herein and other good and valuable consideration, the receipt
and legal  sufficiency  of which are hereby  acknowledged  and  intending  to be
legally bound hereby, the parties agree as follows:

                                    ARTICLE I

                   TERMS OF THE ESCROW FOR THE INITIAL CLOSING

         1.1 The parties  hereby agree to  establish an escrow  account with the
Escrow Agent whereby the Escrow Agent shall hold the funds and  documents  which
are referenced in Section 5.2 of the Purchase Agreement.

         1.2 At the Closing, the Company shall deliver to the Escrow Agent:

             (i) the original executed Registration Rights Agreement in the form
of Exhibit A to the Purchase Agreement;

             (ii)     the original  executed opinion of Muenz Meritz P.C. in the
                      form of Exhibit C to the Purchase Agreement;

             (iii)    the  sum of  $10,000  for the  fees  and  expenses  of the
                      Purchaser's counsel;

             (iv)     the original  executed Company  counterpart of this Escrow
                      Agreement;

             (v)      the original executed Company  counterpart of the Purchase
                      Agreement; and

             (vi)     the  original  executed  Initial  Warrant  in the  form of
                      Exhibit E to the Purchase Agreement.

         1.3 Upon receipt of the foregoing, and receipt of executed counterparts
from Purchaser of the Purchase Agreement,  the Registration Rights Agreement and
this Escrow  Agreement,  the Escrow Agent shall calculate and enter the exercise
price,  the number of warrants,  the issuance date and  termination  date on the
face of

                                       1

<PAGE>

the Initial  Warrant and  immediately  transfer the sum of Ten Thousand  Dollars
$10,000 to Epstein Becker & Green, P.C. ("EB&G"), 250 Park Avenue, New York, New
York 10177 for the Purchaser's  legal,  administrative and escrow costs and then
the Escrow Agent shall then arrange to have the Purchase Agreement,  this Escrow
Agreement,  the Registration  Rights  Agreement,  the Initial  Warrant,  and the
opinion of counsel delivered to the appropriate parties.

                                   ARTICLE II

                     TERMS OF THE ESCROW FOR EACH DRAW DOWN

         2.1  Each  time  the  Company  shall  send a Draw  Down  Notice  to the
Purchaser  as  provided  in the  Purchase  Agreement,  it shall send a copy,  by
facsimile, to the Escrow Agent.

         2.2 Each time the Purchaser  shall purchase  Shares  pursuant to a Draw
Down, the Purchaser  shall send the  applicable  purchase price of the Draw Down
Shares to the Escrow  Agent,  which shall  advise the Company in writing that it
has  received the purchase  price for such Draw Down Shares.  The Company  shall
promptly, but no later than three (3) Trading Days after receipt of such funding
notice from the Escrow  Agent,  cause its transfer  agent to issue the Draw Down
Shares  to the  Purchaser  via  DTC  deposit  to the  account  specified  by the
Purchaser  from  time to time and  deliver  to the  Escrow  Agent  the Draw Down
Warrant,  if applicable,  and, if applicable,  a warrant  certificate  issued to
Ladenburg  Thalmann & Co.  Inc.  with terms  identical  to that of the Draw Down
Warrant  (the "LT Draw Down  Warrant"),  and, as to the first Draw Down  closing
only,  up to $25,000 for the  accountable  expenses of Ladenburg  Thalmann & Co.
Inc.  and a warrant  certificate  issued to Ladenburg  Thalmann & Co. Inc.  with
terms identical to that of the Initial Warrant (the "LT Warrant").  Upon receipt
of written  confirmation from the transfer agent or from the Purchaser that such
Draw Down Shares have been so deposited and the applicable Warrants have been so
delivered,  the Escrow Agent shall enter the calculate and enter the number, the
exercise price,  the Issuance Date and the  Termination  Date on the face of the
applicable  Warrants  and  shall  within  one (1)  Trading  Day  wire 96% of the
purchase price per the written  instructions of the Company, net of One Thousand
Five Hundred  Dollars  $1,500 as escrow  expenses to the Escrow  Agent,  and the
remaining 4% of the purchase price as directed by Ladenburg Thalmann & Co. Inc.

                                   ARTICLE III

                                  MISCELLANEOUS

         3.1 No  waiver  or any  breach  of any  covenant  or  provision  herein
contained  shall be  deemed a  waiver  of any  preceding  or  succeeding  breach
thereof, or of any other covenant or provision herein contained. No extension of
time for  performance  of any  obligation or act shall be deemed an extension of
the time for performance of any other obligation or act.

         3.2 All notices or other communications required or permitted hereunder
shall be in writing, and shall be sent by fax, overnight courier,  registered or
certified mail, postage prepaid,  return receipt requested,  and shall be deemed
received upon receipt thereof, as set forth in the Purchase Agreement.

         3.3 This Escrow  Agreement shall be binding upon and shall inure to the
benefit of the permitted successors and permitted assigns of the parties hereto.

         3.4 This Escrow  Agreement is the final expression of, and contains the
entire agreement between,  the parties with respect to the subject matter hereof
and  supersedes  all prior  understandings  with  respect  thereto.  This Escrow
Agreement may not be modified, changed,  supplemented or terminated, nor may any
obligations  hereunder  be waived,  except by written  instrument  signed by the
parties to be charged or by their  respective  agents duly authorized in writing
or as otherwise expressly permitted herein.

         3.5  Whenever  required by the context of this  Escrow  Agreement,  the
singular shall include the plural and masculine shall include the feminine. This
Escrow Agreement shall not be construed as if it had been

                                       2

<PAGE>

prepared by one of the  parties,  but rather as if both parties had prepared the
same. Unless otherwise indicated,  all references to Articles are to this Escrow
Agreement.

         3.6 The parties hereto expressly agree that this Escrow Agreement shall
be governed by,  interpreted under and construed and enforced in accordance with
the laws of the State of New York.  Except as expressly  set forth  herein,  any
action to enforce,  arising out of, or relating in any way to, any provisions of
this Escrow  Agreement shall brought in the Federal or state courts of New York,
New York as is more fully set forth in the Purchase Agreement.

         3.7 The  Escrow  Agent's  duties  hereunder  may be  altered,  amended,
modified or revoked only by a writing  signed by the Company,  Purchaser and the
Escrow Agent.

         3.8 The Escrow Agent shall be  obligated  only for the  performance  of
such  duties  as are  specifically  set forth  herein  and may rely and shall be
protected  in relying or  refraining  from acting on any  instrument  reasonably
believed by the Escrow  Agent to be genuine and to have been signed or presented
by the proper party or parties.  The Escrow Agent shall not be personally liable
for any act the Escrow  Agent may do or omit to do hereunder as the Escrow Agent
while acting in good faith,  excepting only its own gross  negligence or willful
misconduct,  and any act done or  omitted by the Escrow  Agent  pursuant  to the
advice of the Escrow Agent's  attorneys-at-law  (other than Escrow Agent itself)
shall be conclusive evidence of such good faith.

         3.9 The Escrow Agent is hereby  expressly  authorized  to disregard any
and all  warnings  given by any of the parties  hereto or by any other person or
corporation,  excepting  only  orders or  process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order,  judgment
or decree,  the Escrow Agent shall not be liable to any of the parties hereto or
to any  other  person,  firm or  corporation  by  reason  of such  decree  being
subsequently reversed,  modified,  annulled, set aside, vacated or found to have
been entered without jurisdiction.

         3.10 The Escrow  Agent shall not be liable in any respect on account of
the identity,  authorization or rights of the parties executing or delivering or
purporting  to execute or deliver the  Purchase  Agreement  or any  documents or
papers deposited or called for thereunder or hereunder.

         3.11 The Escrow  Agent shall be  entitled to employ such legal  counsel
and other experts as the Escrow Agent may deem necessary  properly to advise the
Escrow Agent in connection  with the Escrow Agent's duties  hereunder,  may rely
upon  the  advice  of  such  counsel,   and  may  pay  such  counsel  reasonable
compensation  therefor.  The  Escrow  Agent has acted as legal  counsel  for the
Purchaser, and may continue to act as legal counsel for the Purchaser, from time
to time,  notwithstanding its duties as the Escrow Agent hereunder.  The Company
consents to the Escrow Agent in such capacity as legal counsel for the Purchaser
and waives any claim that such representation  represents a conflict of interest
on the part of the Escrow Agent. The Company  understands that the Purchaser and
the Escrow Agent are relying  explicitly on the foregoing  provision in entering
into this Escrow Agreement.

         3.12 The Escrow  Agent's  responsibilities  as escrow  agent  hereunder
shall  terminate  if the Escrow  Agent  shall  resign by  written  notice to the
Company and the Purchaser.  In the event of any such resignation,  the Purchaser
and the Company shall appoint a successor Escrow Agent.

         3.13  If  the  Escrow  Agent  reasonably   requires  other  or  further
instruments in connection  with this Escrow  Agreement or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.

         3.14 It is  understood  and agreed that  should any dispute  arise with
respect to the delivery and/or ownership or right of possession of the documents
or the escrow  funds held by the Escrow  Agent  hereunder,  the Escrow  Agent is
authorized and directed in the Escrow  Agent's sole  discretion (1) to retain in
the Escrow  Agent's  possession  without  liability to anyone all or any part of
said  documents or the escrow funds until such disputes  shall have been settled
either by mutual  written  agreement of the parties  concerned by a final order,

                                       3

<PAGE>

decree  or  judgment  or a court of  competent  jurisdiction  after the time for
appeal has expired and no appeal has been perfected,  but the Escrow Agent shall
be under no duty  whatsoever to institute or defend any such  proceedings or (2)
to deliver the escrow  funds and any other  property and  documents  held by the
Escrow Agent  hereunder to a state or Federal  court  having  competent  subject
matter  jurisdiction and located in the State and City of New York in accordance
with the applicable procedure therefor.

         3.15 The Company and the  Purchaser  agree  jointly  and  severally  to
indemnify and hold harmless the Escrow Agent and its partners, employees, agents
and representatives from any and all claims,  liabilities,  costs or expenses in
any way  arising  from or relating  to the duties or  performance  of the Escrow
Agent  hereunder  or the  transactions  contemplated  hereby or by the  Purchase
Agreement  other than any such claim,  liability,  cost or expense to the extent
the same shall have been determined by final,  unappealable  judgment of a court
of competent  jurisdiction to have resulted from the gross negligence or willful
misconduct of the Escrow Agent.

                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Escrow Agreement as of this __ May, 2000.

                                    First Priority Group, Inc.

                                    By: _____________________________________
                                        Barry Siegel, Chairman & CEO

                                    Suerez Enterprises Limited

                                    By: _____________________________________
                                        Hans Gassner, Authorized Signatory

                                    ESCROW AGENT:

                                    EPSTEIN BECKER & GREEN, P.C.

                                    By: _____________________________________
                                        Robert F. Charron, Authorized Signatory

                                       4

<PAGE>

                                                                      EXHIBIT E

NEITHER  THIS WARRANT NOR THE SHARES  ISSUABLE  UPON  EXERCISE  HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT")
OR ANY OTHER  APPLICABLE  SECURITIES LAWS IN RELIANCE UPON AN EXEMPTION FROM THE
REGISTRATION  REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER SECURITIES LAWS.
NEITHER THIS WARRANT NOR THE SHARES  ISSUABLE UPON EXERCISE  HEREOF MAY BE SOLD,
PLEDGED, TRANSFERRED,  ENCUMBERED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE SECURITIES ACT OR IN A TRANSACTION
WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS OF THE SECURITIES ACT.

                             STOCK PURCHASE WARRANT

                 To Purchase [_______] Shares of Common Stock of

                           First Priority Group, Inc.

                  THIS CERTIFIES  that, for value received,  Suerez  Enterprises
Limited  (the  "Holder"),  is  entitled,  upon  the  terms  and  subject  to the
conditions  hereinafter  set  forth,  at any time on or after May __,  2000 (the
"Issuance  Date") and on or prior to the close of  business  on October __, 2003
(the "Termination Date") but not thereafter,  to subscribe for and purchase from
First  Priority  Group,  Inc., a New York  corporation  (the  "Company"),  up to
[_________] shares (the "Warrant Shares") of Common Stock,  $0.015 par value, of
the Company (the  "Common  Stock").  The  purchase  price of one share of Common
Stock (the "Exercise  Price") under this Warrant shall be [$______] (150% of the
VWAP on the Trading Day prior to the  applicable  closing  date).  The  Exercise
Price and the number of shares for which the  Warrant  is  exercisable  shall be
subject to adjustment as provided  herein.  In the event of any conflict between
the terms of this Warrant and the Common Stock Purchase  Agreement dated May 31,
2000 pursuant to which this Warrant has been issued (the "Purchase  Agreement"),
the Purchase  Agreement shall control.  Capitalized terms used and not otherwise
defined  herein shall have the meanings set forth for such terms in the Purchase
Agreement.

         1. Title to Warrant.  Prior to the Termination  Date hereof and subject
to compliance  with applicable  laws, this Warrant and all rights  hereunder are
transferable, in whole or in part, at the office or agency of the Company by the
holder hereof in person or by duly authorized  attorney,  upon surrender of this
Warrant together with the Assignment Form annexed hereto properly endorsed.

         2.  Authorization of Shares.  The Company  covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights  represented by this Warrant,  be duly
authorized,  validly  issued,  fully  paid and  nonassessable  and free from all
taxes,  liens and charges in respect of the issue  thereof  (other than taxes in
respect of any transfer occurring contemporaneously with such issue).

         3.  Exercise  of  Warrant.  Except  as  provided  in  Section 4 herein,
exercise of the purchase  rights  represented by this Warrant may be made at any
time or times,  as to one half of the  Warrants,  on or after the Issuance  Date
hereof and before the close of business on the 180th day before the  Termination
Date  hereof  and as to the other one half,  on or after the 180th day after the
Issuance  Date hereof and before the close of business on the  Termination  Date
hereof.  Exercise of this  Warrant or any part  hereof  shall be effected by the
surrender  of this Warrant and the Notice of Exercise  Form annexed  hereto duly
executed,  at the office of the Company  (or such other  office or agency of the
Company as it may designate by notice in writing to the registered holder hereof
at the address of such holder  appearing  on the books of the  Company) and upon
payment of the Exercise Price of the shares  thereby  purchased by wire transfer
or cashier's  check drawn on a United  States  bank,  the holder of this Warrant
shall be  entitled to receive a  certificate  for the number of shares of Common
Stock  so  purchased.  Certificates  for  shares  purchased  hereunder  shall be
delivered to the holder  hereof  within three (3) Trading Days after the date on
which this Warrant shall have been exercised as aforesaid. This Warrant shall be
deemed to have

                                       1

<PAGE>

been exercised and such certificate or certificates shall be deemed to have been
issued,  and Holder or any other person so  designated to be named therein shall
be deemed to have become a holder of record of such shares for all purposes,  as
of the date the  Warrant  has been  exercised  by payment to the  Company of the
Exercise Price and all taxes required to be paid by Holder,  if any, pursuant to
Section 5 prior to the issuance of such shares,  have been paid. If this Warrant
shall have been exercised in part, the Company shall, at the time of delivery of
the certificate or certificates representing Warrant Shares, deliver to Holder a
new Warrant  evidencing the rights of Holder to purchase the unpurchased  shares
of Common Stock called for by this Warrant, which new Warrant shall in all other
respects be identical  with this  Warrant.  Should the Warrant not have been and
remain  registered  under an effective  Registration  Statement  pursuant to the
Registration  Rights  Agreement  dated May 31, 2000  between the Company and the
Holder  immediately prior to the exercise of this Warrant,  in whole or in part,
then this  Warrant may also be  exercised  by means of a "cashless  exercise" in
which the holder  shall be entitled to receive a  certificate  for the number of
shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

         (A)    =     the average of the high and low  trading  prices per share
                      of Common Stock on the Trading Day  preceding  the date of
                      such election;

         (B)    =     the Exercise Price of the Warrants; and

         (X)    =     the  number  of  shares  issuable  upon  exercise  of  the
                      Warrants in accordance with the terms of this Warrant.

         4. No  Fractional  Shares  or  Scrip.  No  fractional  shares  or scrip
representing  fractional  shares  shall  be  issued  upon the  exercise  of this
Warrant.  As to any fraction of a share which Holder would otherwise be entitled
to purchase  upon such  exercise,  the Company  shall pay a cash  adjustment  in
respect of such final fraction in an amount equal to the Exercise Price.

         5. Charges, Taxes and Expenses.  Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant  shall be made without  charge to
the holder hereof for any issue or transfer tax or other  incidental  expense in
respect of the  issuance of such  certificate,  all of which taxes and  expenses
shall be paid by the Company,  and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant;  provided,  however,  that in the event certificates for
shares of Common  Stock  are to be issued in a name  other  than the name of the
holder of this  Warrant,  this Warrant when  surrendered  for exercise  shall be
accompanied by the Assignment  Form attached  hereto duly executed by the holder
hereof; and the Company may require,  as a condition  thereto,  the payment of a
sum sufficient to reimburse it for any transfer tax incidental thereto.

         6. Closing of Books.  The Company will not close its shareholder  books
or records in any manner which prevents the timely exercise of this Warrant.

         7. Transfer,  Division and Combination.  (a) Subject to compliance with
any  applicable  securities  laws,  transfer  of this  Warrant  and  all  rights
hereunder,  in whole or in part, shall be registered on the books of the Company
to be  maintained  for such  purpose,  upon  surrender  of this  Warrant  at the
principal  office of the Company,  together  with a written  assignment  of this
Warrant substantially in the form attached hereto duly executed by Holder or its
agent or attorney and funds  sufficient  to pay any transfer  taxes payable upon
the making of such transfer. Upon such surrender and, if required, such payment,
the Company  shall  execute and deliver a new Warrant or Warrants in the name of
the assignee or assignees and in the denomination or denominations  specified in
such  instrument  of  assignment,  and shall issue to the assignor a new Warrant
evidencing  the portion of this Warrant not so assigned,  and this Warrant shall
promptly be cancelled.  A Warrant,  if properly assigned,  may be exercised by a
new holder  for the  purchase  of shares of Common  Stock  without  having a new
Warrant issued.

                        (b) This  Warrant may be divided or combined  with other
Warrants  upon  presentation  hereof at the  aforesaid  office  of the  Company,
together with a written notice  specifying the names and  denominations in which
new  Warrants  are to be  issued,  signed by  Holder  or its agent or  attorney.
Subject  to  compliance  with  Section  7(a),  as to any  transfer  which may be
involved in such division or combination,

                                       2

<PAGE>

the Company  shall execute and deliver a new Warrant or Warrants in exchange for
the  Warrant or  Warrants  to be divided or  combined  in  accordance  with such
notice.

                        (c) The Company shall prepare,  issue and deliver at its
own expense  (other than transfer  taxes) the new Warrant or Warrants under this
Section 7.

                        (d) The Company  agrees to  maintain,  at its  aforesaid
office,  books for the  registration  and the  registration  of  transfer of the
Warrants.

         8. No Rights as  Shareholder  until  Exercise.  This  Warrant  does not
entitle the holder  hereof to any voting rights or other rights as a shareholder
of the Company prior to the exercise hereof.  Upon the surrender of this Warrant
and the payment of the aggregate Exercise Price, the Warrant Shares so purchased
shall be and be deemed to be issued to such  holder as the record  owner of such
shares as of the close of business on the later of the date of such surrender or
payment.

         9. Loss,  Theft,  Destruction  or  Mutilation  of Warrant.  The Company
covenants that upon receipt by the Company of evidence  reasonably  satisfactory
to it of the loss, theft,  destruction or mutilation of this Warrant certificate
or any stock  certificate  relating to the Warrant Shares,  and in case of loss,
theft or  destruction,  of indemnity or security  reasonably  satisfactory to it
(which  shall not  include  the  posting of any bond),  and upon  surrender  and
cancellation  of such Warrant or stock  certificate,  if mutilated,  the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock certificate.

         10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the  taking of any action or the  expiration  of any right  required  or granted
herein shall be a Saturday,  Sunday or a legal holiday,  then such action may be
taken or such right may be exercised on the next  succeeding day not a Saturday,
Sunday or legal holiday.

         11.  Adjustments  of Exercise Price and Number of Warrant  Shares.  (a)
Stock  Splits,  etc.  The number  and kind of  securities  purchasable  upon the
exercise of this Warrant and the Exercise  Price shall be subject to  adjustment
from  time to time  upon  the  happening  of any of the  following.  In case the
Company  shall  (i)  pay a  dividend  in  shares  of  Common  Stock  or  make  a
distribution  in shares of Common  Stock to  holders of its  outstanding  Common
Stock,  (ii)  subdivide  its  outstanding  shares of Common Stock into a greater
number of shares of Common Stock, (iii) combine its outstanding shares of Common
Stock into a smaller  number of shares of Common  Stock or (iv) issue any shares
of its capital stock in a reclassification  of the Common Stock, then the number
of Warrant Shares  purchasable upon exercise of this Warrant  immediately  prior
thereto  shall be adjusted so that the holder of this Warrant  shall be entitled
to  receive  the kind and number of Warrant  Shares or other  securities  of the
Company  which he would have  owned or have been  entitled  to receive  had such
Warrant been exercised in advance thereof. Upon each such adjustment of the kind
and  number of  Warrant  Shares or other  securities  of the  Company  which are
purchasable  hereunder,  the holder of this Warrant shall thereafter be entitled
to purchase the number of Warrant Shares or other securities resulting from such
adjustment at an Exercise Price per Warrant Share or other security  obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares  purchasable  pursuant hereto  immediately prior to
such adjustment and dividing by the number of Warrant Shares or other securities
of the Company  resulting from such  adjustment.  An adjustment made pursuant to
this paragraph shall become  effective  immediately  after the effective date of
such event retroactive to the record date, if any, for such event.

                        (b)    Reorganization,     Reclassification,     Merger,
Consolidation or Disposition of Assets. In case the Company shall reorganize its
capital, reclassify its capital stock, consolidate or merge with or into another
corporation  (where the Company is not the surviving  corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business  to another  corporation  and,  pursuant to the terms of such
reorganization,   reclassification,  merger,  consolidation  or  disposition  of
assets, shares of common stock of the successor or acquiring corporation, or any
cash,  shares of stock or other securities or property of any nature

                                       3

<PAGE>

whatsoever  (including  warrants or other  subscription  or purchase  rights) in
addition to or in lieu of common stock of the successor or acquiring corporation
("Other  Property"),  are to be  received  by or  distributed  to the holders of
Common Stock of the  Company,  then Holder  shall have the right  thereafter  to
receive,  upon exercise of this Warrant, the number of shares of common stock of
the successor or acquiring corporation or of the Company, if it is the surviving
corporation,  and  Other  Property  receivable  upon  or  as a  result  of  such
reorganization, reclassification, merger, consolidation or disposition of assets
by a holder of the number of shares of Common  Stock for which  this  Warrant is
exercisable immediately prior to such event. In case of any such reorganization,
reclassification,  merger, consolidation or disposition of assets, the successor
or acquiring  corporation (if other than the Company) shall expressly assume the
due and  punctual  observance  and  performance  of each and every  covenant and
condition of this  Warrant to be  performed  and observed by the Company and all
the obligations and liabilities hereunder,  subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors  of the  Company)  in order to provide  for  adjustments  of shares of
Common  Stock for which this  Warrant is  exercisable  which  shall be as nearly
equivalent as  practicable to the  adjustments  provided for in this Section 11.
For purposes of this  Section 11,  "common  stock of the  successor or acquiring
corporation"  shall include stock of such  corporation of any class which is not
preferred  as to  dividends  or  assets  over any  other  class of stock of such
corporation  and which is not subject to  redemption  and shall also include any
evidences  of  indebtedness,  shares  of  stock or other  securities  which  are
convertible into or exchangeable for any such stock,  either immediately or upon
the arrival of a specified  date or the  happening of a specified  event and any
warrants  or other  rights to  subscribe  for or purchase  any such  stock.  The
foregoing  provisions  of this Section 11 shall  similarly  apply to  successive
reorganizations,  reclassifications,  mergers,  consolidations or disposition of
assets.

         12.  Voluntary  Adjustment by the Company.  The Company may at any time
during the term of this Warrant,  reduce the then current  Exercise Price to any
amount and for any period of time deemed  appropriate  by the Board of Directors
of the Company.

         13.  Notice of  Adjustment.  Whenever  the number of Warrant  Shares or
number or kind of securities or other property  purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided,  the Company
shall promptly mail by registered or certified mail,  return receipt  requested,
to the holder of this Warrant notice of such  adjustment or adjustments  setting
forth  the  number  of  Warrant  Shares  (and  other   securities  or  property)
purchasable  upon the exercise of this  Warrant and the  Exercise  Price of such
Warrant Shares (and other securities or property) after such adjustment, setting
forth a brief statement of the facts requiring such adjustment and setting forth
the computation by which such  adjustment was made. Such notice,  in the absence
of manifest  error,  shall be  conclusive  evidence of the  correctness  of such
adjustment.

         14. Notice of Corporate Action. If at any time:

                        (a) the  Company  shall take a record of the  holders of
its Common  Stock for the  purpose of  entitling  them to receive a dividend  or
other  distribution,  or any right to subscribe for or purchase any evidences of
its  indebtedness,  any shares of stock of any class or any other  securities or
property, or to receive any other right, or

                        (b) there  shall be any  capital  reorganization  of the
Company,  any  reclassification  or recapitalization of the capital stock of the
Company  or any  consolidation  or  merger  of the  Company  with,  or any sale,
transfer or other disposition of all or substantially  all the property,  assets
or business of the Company to, another corporation or,

                        (c)  there   shall  be  a   voluntary   or   involuntary
dissolution, liquidation or winding up of the Company;

then, in any one or more of such cases,  the Company shall give to Holder (i) at
least 30 days' prior written  notice of the date on which a record date shall be
selected for such dividend,  distribution or right or for determining  rights to
vote  in  respect  of  any  such   reorganization,   reclassification,   merger,
consolidation, sale, transfer, disposition,  liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 30
days'  prior  written  notice of the date

                                       4

<PAGE>

when the same shall take place.  Such notice in  accordance  with the  foregoing
clause  also shall  specify (i) the date on which any such record is to be taken
for the purpose of such dividend,  distribution or right,  the date on which the
holders of Common Stock shall be entitled to any such dividend,  distribution or
right, and the amount and character thereof, and (ii) the date on which any such
reorganization,   reclassification,   merger,  consolidation,   sale,  transfer,
disposition,  dissolution,  liquidation  or  winding up is to take place and the
time,  if any such time is to be fixed,  as of which the holders of Common Stock
shall be entitled to exchange  their  shares of Common Stock for  securities  or
other property  deliverable upon such disposition,  dissolution,  liquidation or
winding up. Each such written notice shall be sufficiently given if addressed to
Holder at the last  address of Holder  appearing on the books of the Company and
delivered in accordance with Section 16(d).

         15. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding,  it will reserve from its authorized and unissued Common
Stock a  sufficient  number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant.  The Company
further  covenants  that its  issuance of this  Warrant  shall  constitute  full
authority  to its  officers  who are charged  with the duty of  executing  stock
certificates  to execute and issue the  necessary  certificates  for the Warrant
Shares upon the exercise of the purchase rights under this Warrant.  The Company
will take all such  reasonable  action as may be  necessary  to assure that such
Warrant  Shares  may be issued  as  provided  herein  without  violation  of any
applicable law or regulation,  or of any  requirements  of the Principal  Market
upon which the Common Stock may be listed.

         The Company  shall not by any action,  including,  without  limitation,
amending  its  certificate  of  incorporation  or  through  any  reorganization,
transfer  of  assets,  consolidation,  merger,  dissolution,  issue  or  sale of
securities or any other voluntary action,  avoid or seek to avoid the observance
or  performance  of any of the terms of this  Warrant,  but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or  appropriate to protect the rights of Holder
against  impairment.  Without  limiting the  generality  of the  foregoing,  the
Company  will (a) not  increase  the par value of any  shares  of  Common  Stock
receivable  upon the exercise of this Warrant above the amount payable  therefor
upon such exercise immediately prior to such increase in par value, (b) take all
such action as may be  necessary  or  appropriate  in order that the Company may
validly and legally  issue fully paid and  nonassessable  shares of Common Stock
upon the  exercise  of this  Warrant,  and (c) use all  commercially  reasonable
efforts to obtain  all such  authorizations,  exemptions  or  consents  from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.

         Upon the  request of Holder,  the  Company  will at any time during the
period this Warrant is outstanding  acknowledge in writing,  in form  reasonably
satisfactory  to  Holder,  the  continuing  validity  of  this  Warrant  and the
obligations of the Company hereunder.

         Before taking any action which would cause an  adjustment  reducing the
current Exercise Price below the then par value, if any, of the shares of Common
Stock  issuable  upon  exercise  of the  Warrants,  the  Company  shall take any
corporate  action  which may be  necessary in order that the Company may validly
and legally issue fully paid and  non-assessable  shares of such Common Stock at
such adjusted Exercise Price.

         Before  taking any action  which would result in an  adjustment  in the
number of shares of Common Stock for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such  authorizations  or exemptions
thereof,  or consents  thereto,  as may be necessary from any public  regulatory
body or bodies having jurisdiction thereof.

         16. Miscellaneous.

                        (a) Jurisdiction. This Warrant shall be binding upon any
successors or assigns of the Company.  This Warrant shall  constitute a contract
under the laws of New York without  regard to its conflict of law  principles or
rules,  and be subject  to  arbitration  pursuant  to the terms set forth in the
Purchase Agreement.

                                       5

<PAGE>

                        (b)  Restrictions.  The holder hereof  acknowledges that
the  Warrant  Shares  acquired  upon  the  exercise  of  this  Warrant,  if  not
registered,  will have  restrictions  upon  resale  imposed by state and federal
securities laws.

                        (c) Nonwaiver and Expenses.  No course of dealing or any
delay or failure to exercise  any right  hereunder  on the part of Holder  shall
operate as a waiver of such right or otherwise prejudice Holder's rights, powers
or remedies,  notwithstanding  all rights hereunder terminate on the Termination
Date  hereof.  If the  Company  willfully  fails to  comply  with  any  material
provision of this Warrant, the Company shall pay to Holder such amounts as shall
be  sufficient  to cover any costs and expenses  including,  but not limited to,
reasonable attorneys' fees, including those of appellate  proceedings,  incurred
by Holder  in  collecting  any  amounts  due  pursuant  hereto  or in  otherwise
enforcing any of its rights, powers or remedies hereunder.

                        (d)  Notices.  Any  notice,  request  or other  document
required  or  permitted  to be given or  delivered  to the holder  hereof by the
Company  shall be  delivered in  accordance  with the notice  provisions  of the
Purchase Agreement.

                        (e) Limitation of Liability. No provision hereof, in the
absence of affirmative  action by Holder to purchase shares of Common Stock, and
no enumeration  herein of the rights or privileges of Holder hereof,  shall give
rise to any liability of Holder for the purchase price of any Common Stock or as
a stockholder of the Company,  whether such liability is asserted by the Company
or by creditors of the Company.

                        (f) Remedies.  Holder,  in addition to being entitled to
exercise  all rights  granted by law,  including  recovery of  damages,  will be
entitled to specific  performance of its rights under this Warrant.  The Company
agrees that  monetary  damages would not be adequate  compensation  for any loss
incurred  by reason  of a breach by it of the  provisions  of this  Warrant  and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.

                        (g)  Successors  and  Assigns.   Subject  to  applicable
securities  laws, this Warrant and the rights and obligations  evidenced  hereby
shall inure to the benefit of and be binding upon the  successors of the Company
and the  successors  and  permitted  assigns of Holder.  The  provisions of this
Warrant are  intended to be for the benefit of all Holders  from time to time of
this  Warrant and shall be  enforceable  by any such Holder or holder of Warrant
Shares.

                        (h) Indemnification. The Company agrees to indemnify and
hold  harmless  Holder from and against any  liabilities,  obligations,  losses,
damages,  penalties,  actions, judgments, suits, claims, costs, attorneys' fees,
expenses and disbursements of any kind which may be imposed upon, incurred by or
asserted  against Holder in any manner relating to or arising out of any failure
by the  Company  to  perform  or  observe  in any  material  respect  any of its
covenants,  agreements,  undertakings  or obligations set forth in this Warrant;
provided,  however,  that the Company will not be liable hereunder to the extent
that  any  liabilities,   obligations,   losses,  damages,  penalties,  actions,
judgments,  suits, claims, costs, attorneys' fees, expenses or disbursements are
found  in a final  non-appealable  judgment  by a court  to have  resulted  from
Holder's  negligence,  bad faith or  willful  misconduct  in its  capacity  as a
stockholder or warrantholder of the Company.

                        (i)  Amendment.  This Warrant may be modified or amended
or the provisions  hereof waived with the written consent of the Company and the
Holder.

                        (j) Severability.  Wherever possible,  each provision of
this Warrant  shall be  interpreted  in such manner as to be effective and valid
under  applicable  law, but if any provision of this Warrant shall be prohibited
by or invalid under  applicable  law, such provision shall be ineffective to the
extent of such prohibition or invalidity,  without invalidating the remainder of
such provisions or the remaining provisions of this Warrant.

                        (k) Headings.  The headings used in this Warrant are for
the  convenience of reference  only and shall not, for any purpose,  be deemed a
part of this Warrant.

                                       6

<PAGE>

                  IN WITNESS WHEREOF,  the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated:

                                              First Priority Group, Inc.

                                              By:  ____________________________
                                                   Barry Siegel, Chairman & CEO

                                       7

<PAGE>

                               NOTICE OF EXERCISE

To:      First Priority Group, Inc.

         1. The  undersigned  hereby  elects to  purchase  [________]  shares of
Common Stock (the "Common Stock"), of First Priority Group, Inc. pursuant to the
terms of the  attached  Warrant,  and tenders  herewith  payment of the exercise
price in full, together with all applicable transfer taxes, if any.

         2. Please issue a certificate or certificates  representing said shares
of  Common  Stock in the name of the  undersigned  or in such  other  name as is
specified below:

----------------------------------------

Name

Address:

----------------------------------------

Dated:

----------------------------------------

Signature

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

                  FOR VALUE  RECEIVED,  the  foregoing  Warrant  and all  rights
evidenced   thereby   are   hereby   assigned   to  [NAME]   whose   address  is
[_________________________].

Dated:

Holder's Signature:

----------------------------------------

Holder's Address:

----------------------------------------

Signature Guaranteed:

----------------------------------------

                  NOTE: The signature to this  Assignment  Form must  correspond
with the name as it appears on the face of the Warrant,  without  alteration  or
enlargement or any change whatsoever,  and must be guaranteed by a bank or trust
company.  Officers of  corporations  and those  acting in an  fiduciary or other
representative  capacity  should file proper evidence of authority to assign the
foregoing Warrant.

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