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SETTLEMENT AGREEMENT AND MUTUAL RELEASE    
  

        This Settlement Agreement and Mutual Release ("Settlement Agreement") is made and entered into as of the 31st day of December, 2001, by and between CHEYENNE
INVESTMENTS LLC, a Nevada limited liability company with its principal office at 3291 North Buffalo, Suite 8, Las Vegas, Nevada 89129 ("Cheyenne") and PURCHASEPRO.COM, INC., a Nevada
corporation with its principal office at 7710 West Cheyenne Ave., Las Vegas, Nevada 89129 ("PurchasePro"), with respect to the following recitals of facts: 

 
 

RECITALS    
  

        A.    Pursuant
to a Standard Office Lease Agreement, dated June 15, 1998 and a Standard Office Lease Agreement, dated January 20, 2000 and amended
December 20, 2000 (hereinafter collectively referred to as the "Leases"), PurchasePro leases from Cheyenne property located at 3291 N. Buffalo Drive (Suites 1, 2 and 9),
7660 W. Cheyenne (Suites 114), and 7690 W. Cheyenne, Las Vegas, Nevada 89129 (collectively, the "Leased Properties"); 

        B.    Cheyenne
made certain tenant improvements to the Leased Properties having a value of approximately $3,166,483.51 (the "TI Expenditures"). 

        C.    PurchasePro
provided Cheyenne notice of its intent to abandon the Leased Premises during October 2001 and vacated all of the Leased Properties on or before
November 1, 2002. PurchasePro continues to occupy the real property located at 7710 West Cheyenne Avenue and commonly referred to as Building 3 leased by it from Cheyenne under that
certain Standard Office Lease Agreement between the parties, dated January 20, 2000 (the "Continuing Lease"). 

        D.    The
parties to this Settlement Agreement now wish to terminate the Leases (but not the Continuing Lease) and resolve all controversies between them to avoid the expense
and burden of further litigation, and therefore enter into this Settlement Agreement and the releases contained herein. 

        NOW,
THEREFORE, in consideration of the mutual promises and covenants contained herein, Cheyenne and PurchasePro (collectively, the "Parties") hereby agree as follows: 

        1.    Each
of the Leases is hereby terminated and shall be of no further or effect, and neither party shall have any additional rights or obligations thereunder.
Notwithstanding the foregoing, Cheyenne hereby acknowledges and agrees that there exists no breach by PurchasePro of any provision of, nor default of PurchasePro under, the Continuing Lease, which
remains in full force and effect, enforceable against each party thereto in accordance with its terms. 

        2.    Simultaneously
with the entering of this Settlement Agreement, PurchasePro shall execute a Bill of Sale in the form attached hereto as Exhibit "A" transferring to
Cheyenne all of PurchasePro's right, title and interest in and to all of the furniture, fixtures and equipment located in the Leased Properties, including the property in any shipping container
located in the parking lot of the Leased Properties, such furniture, fixtures and equipment to be agreed upon by the parties and attached to this Settlement Agreement as Exhibit "B" on or
before April 30, 2002. In consideration of such conveyance, Cheyenne shall pay to PurchasePro the sum of $650,000, due and payable on repayment or earlier conversion of the Convertible Note
(defined below). 

        3.    As
and for consideration of the releases provided by Cheyenne herein and as full and complete payment for any and all obligations to Cheyenne under the Leases,
(i) PurchasePro has paid through the date hereof the sum of $445,000, paid simultaneously with the timely monthly payment of lease payments by PurchasePro under the Continuing Lease for the
months between November 2001 and March 2002, receipt of which payment is hereby acknowledged by Cheyenne, (ii) PurchasePro shall make additional payments of $52,000 per month,
such amount due and payable simultaneously with the monthly payment by PurchasePro under the Continuing Lease until repayment or earlier conversion of the Convertible Note (defined below), and
(iii) PurchasePro shall execute and deliver to Cheyenne a Convertible Promissory Note (the 

"Convertible Note") in the form attached hereto as Exhibit "C" in the original principal amount of $4,643,277.09, due and payable on April 1, 2003. 

        4.    As
and for consideration of the releases provided by PurchasePro herein, Cheyenne shall use commercially practicable efforts to re-lease the Leased Properties
as soon as practicable hereafter. 

        5.    Upon
execution and delivery by PurchasePro of the Convertible Note and the full payment of the amounts specified therein, except for the obligations specifically set
forth in this Settlement Agreement, Cheyenne, for itself and on behalf of its respective officers, employees, agents, attorneys, insurers, sureties, predecessors, successors, assignors and assignees,
does hereby forever release and discharge PurchasePro, and its respective officers, employees, agents, attorneys, insurers, sureties, predecessors, successors, assignors and assignees, from any and
all past, present or future claims, demands, actions, causes of action, obligations, costs, expenses, attorneys fees, damages, losses and liabilities, which arise out of, pertain to or relate, in any
way, to the Leases or the TI Expenditures. 

        6.    Upon
full and complete performance of the obligations set forth in Section 4 of this Settlement Agreement, except for the obligations specifically set forth in
this Settlement Agreement, PurchasePro, for itself and on behalf of its officers, representatives, employees, agents, attorneys, insurers, sureties, predecessors, successors, assignors, assignees, and
related entities, does hereby forever release and discharge Cheyenne, and its respective officers, employees, agents, attorneys, insurers, sureties, predecessors, successors, assignors and assignees,
from any and all past, present or future claims, demands, actions, causes of action, obligations, costs, expenses, attorneys fees, damages, losses and liabilities, which arise out of, or pertain to,
or relate in any way to the Leases. 

        7.    The
Parties to this Settlement Agreement acknowledge that they may hereafter discover facts different from or in addition to those which they now know or believe to be
true with respect to the matters set forth under this Settlement Agreement, and agree that this Settlement Agreement will remain in effect in all respects, notwithstanding the discovery of such
different or additional facts. It is the intent of the Parties to fully, finally and forever release the claims described in paragraphs 5 and 6 herein, and in furtherance of this intention,
this Settlement Agreement shall be and remain in effect as a release of such claims, notwithstanding the discovery or existence of different or additional facts relevant to those claims. The Parties
agree to assume the risk of any and all claims, causes of action, liabilities, indebtedness or obligations which are released by this Settlement Agreement. 

        8.    The
Parties warrant and represent that they have not heretofore assigned or transferred or purported to assign or transfer to any other person and/or entity any claims
released hereunder. The Parties further warrant and represent that they are the sole and lawful owners or duly acting and authorized representatives of the owners of the rights, title, and interest in
and to any and all claims, demands and causes of action released by this Settlement Agreement. 

        9.    This
Settlement Agreement shall be binding upon the Parties and their respective officers, representatives, employees, agents, heirs, successors, assignors and assignees
and shall inure to the benefit of said Parties, and each of them, and their respective officers, representatives, employees, agents, heirs, successors, assignors and assignees. Each of the Parties
shall bear its own attorneys fees and costs incurred in connection with this Settlement Agreement. 

        10.  All
agreements, covenants, representations and warranties, express or implied, oral and written, of the Parties concerning the subject matter hereof, are contained and
referred to herein. No other agreements, covenants, representations or warranties, express or implied, oral or written have been made by any party hereto to any other party concerning the subject
matter hereof except as referred to and preserved in this Settlement Agreement. All prior and contemporaneous conversations, negotiations, possible and alleged agreements, representations, covenants,
and 

warranties concerning the subject matter hereto are merged herein except as specifically referred to herein and excluded from the operation of the release contained in this Settlement Agreement. 

        11.  Each
party represents and warrants that it has full power and authority to enter into and perform this Settlement Agreement, and that person executing this Settlement
Agreement on behalf of that party has been properly authorized and empowered to enter into this Settlement Agreement and to bind that party hereto. 

        12.  This
Settlement Agreement shall be interpreted and enforced in accordance with the laws of the State of Nevada, provided that no provision of this Settlement Agreement
shall be interpreted for or against a party because that party or that party's legal representative drafted such provision, and that this Settlement Agreement shall be construed as if jointly prepared
by the Parties. 

        13.  Each
of the signatories to this Settlement Agreement warrants that he or she has carefully read and understands the terms and conditions of this Settlement Agreement,
that he or she has conducted his or her own investigation into the disputes that are being settled hereunder and has not relied upon the representations or advice of any other party, or any attorney
not his or her own, and that he or she is 18 years of age or older. This Settlement Agreement, and the terms and conditions thereof were determined in arms length negotiations by and between
the Parties to this Settlement Agreement and their respective counsel. 

        14.  In
the event that any action or proceeding is brought to enforce any of the terms and conditions of this Settlement Agreement, such action will be brought in the
District Court of the State of Nevada in and for the County of Clark, and any and all fees and costs incurred to enforce such terms and conditions of this Settlement Agreement shall be paid to the
prevailing party to the action or proceeding. 

        15.  No
modification, waiver, or amendment of this Settlement Agreement shall be valid unless the same is in writing and executed by all Parties hereto. Waiver of any one
provision shall not be deemed to be a waiver of any other provision herein. 

        16.  This
Settlement Agreement is a compromise of disputed claims, and nothing herein shall be deemed or construed to be an admission or a concession of any liability or
fault by the Parties. The specific terms of this Settlement Agreement shall remain confidential as between the Parties. 

        17.  This
Settlement Agreement may be executed in one or more counterparts, each of which shall be deemed an original and will become effective and binding upon the parties
at such time as all of the signatories have signed a counterpart of this Settlement Agreement. All counterparts so executed shall constitute one Settlement Agreement binding on the Parties hereto. 

        IN
WITNESS WHEREOF, the Parties have caused this Settlement Agreement to be executed as of the day and year first above written. 

	DATED:	 	CHEYENNE INVESTMENTS LLC, A NEVADA

LIMITED LIABILITY COMPANY
	

 	
 	

By:	
 	

 Name:

Title:
	

DATED:	
 	
PURCHASEPRO.COM, INC., A NEVADA

CORPORATION
	

 	
 	

By:	
 	

 Name:

Title:

 
 

BILL OF SALE    
  

        THIS BILL OF SALE dated as of December 31, 2001, is being executed and delivered by
PurchasePro.com, Inc. a Nevada corporation (the "Company"), pursuant to that certain Mutual Release and Settlement Agreement dated December 31, 2001 (the "Settlement Agreement"), and
Cheyenne Investments, LLC, a Nevada limited liability company ("Buyer"). 

        NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Company hereby agrees as follows: 

        1.    Subject
to the terms and conditions set forth in the Settlement Agreement, Company hereby grants, sells, conveys, assigns, transfers and delivers to Buyer, and Buyer
hereby acquires from Company, all of Company's right, title, and interest in and to the assets to be agreed upon by the parties and attached as Exhibit B to the Settlement Agreement on or
before April 30, 2002 (the "Purchased Assets"). 

        2.    This
Bill of Sale shall in all respects be construed in accordance with and governed by the laws of the State of Nevada without giving effect to its
conflicts-of-laws principles. 

        3.    This
Bill of Sale may be executed in any number of counterparts and by facsimile, each of which will be deemed an original, but all of which together will constitute one
and the same instrument. 

[SIGNATURE PAGE TO FOLLOW] 

        IN
WITNESS WHEREOF, Company has caused this Bill of Sale to be executed and delivered on the date and year first written above. 

	 	 	PurchasePro.com, Inc.

a Nevada corporation
	

 	
 	

By:	
 	

	

 	
 	

Name:	
 	

	

 	
 	

Title:	
 	

[SIGNATURE PAGE TO THE BILL OF SALE] 

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RECITALS

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        THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED
UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT COVERING SUCH SECURITIES OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY
TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE 1933 ACT.

 
 

PURCHASEPRO.COM, INC.,
  a Nevada corporation
  CONVERTIBLE PROMISSORY NOTE    
  

	$4,643,277.09	 	December 31, 2001

        FOR
VALUE RECEIVED, PURCHASEPRO.COM, INC., a Nevada corporation (the "Company"), hereby promises to pay to the order of  Cheyenne Investments, LLC, a Nevada
limited liability company (hereinafter referred to as the "Holder"), or registered assigns, the original principal
amount of Four Million Six Hundred Forty-Three Thousand Two Hundred Seventy-Seven and 09/100 Dollars ($4,643,277.09), together with interest thereon from the date hereof at the rate of seven and
one-half percent (7.5%) per annum until paid in full. Interest shall be computed on the basis of the actual number of days elapsed over a 365-day year. Beginning
April 1, 2002, and until the earlier of the payment of this Note in full or April 1, 2003, and so long as the Company is not in default in making payments due to Holder under that
certain Settlement Agreement and Mutual Release of even date herewith, the principal amount of this Note shall automatically be reduced by any amount received by Holder as rent under any lease with a
third party for the premises located at 3291 N. Buffalo Drive, Suites 1 or 9, or 7690 W. Cheyenne, provided however, that such reduction shall not exceed $52,000 for any month. 

        This
Note shall be payable at 3291 N. Buffalo Drive, Suite 8, Las Vegas, Nevada 89129, or at such other place as Holder may designate in writing. 

        1.    Payment of Note.    If this Note has not been converted pursuant to Sections 2(a) or 2(b) hereof, then on
April 1, 2003, the Company shall pay Holder all of the principal due on this Note plus all accrued interest to such date. Company shall provide Holder with at least ten (10) business
days prior written notice of its intention to make any prepayment on the Note in whole or in part so as to allow Holder to determine whether to exercise its right of conversion hereunder with respect
to the portion of the Note being repaid. 

        2.    Conversion.    

        (a)    Voluntary Conversion.    Notwithstanding the provisions of Section 2(b) of this Note, at any time prior
to repayment of the Note, at the option of Holder, Holder may elect for the principal amount of this Note and all accrued interest (the "Conversion Amount"), or any portion thereof, to be converted
into such number of fully paid and non-assessable shares of the Company's Common Stock as is equal to the Conversion Amount divided by the closing price of the Company's common stock on
the Nasdaq National Market on the day immediately preceding such conversion. In order to convert this Note into shares of Common Stock, Holder shall surrender this Note at the office of the Company
and shall give written notice by mail, postage prepaid, to the Company at its principal corporate office, of the election to convert the same pursuant to this Section 2(a), and shall state
therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued. Such conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of this Note, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the
record holder or holders for such shares of Common Stock as of such date. 

 

        (b)    Automatic Conversion.    Immediately upon effectiveness of a registration statement with the Securities and
Exchange Commission with respect to the shares of the Company's Common Stock underlying this Note (the "Underlying Common"), as a result of which the Underlying Common shall be freely and immediately
tradable without restriction (subject to (i) the person or persons entitled to receive the shares of Common Stock issuable upon such conversion (the "Common Recipients") complying with all
applicable securities laws relative to them as selling stockholders regarding such trade or sale, and (ii) the restrictions set forth in this paragraph with respect to the Company's right to
suspend the effectiveness of the registration statement and the suspension of any sale of the Underlying Common by the Common Recipients during such suspension period), all the Conversion Amount shall
be
automatically converted into that number of fully paid and nonassessable shares of the Company's Common Stock as is equal to the Conversion Amount divided by the closing price of the Company's common
stock on the Nasdaq National Market on the day immediately preceding such conversion. The conversion shall be deemed effective as of the date of effectiveness of a registration statement with respect
to the Underlying Common, and the Common Recipients shall be treated for all purposes as the record holder or holders for such shares of Common Stock as of such date, and the Holder of this Note shall
have no further rights under this Note, whether or not this Note is surrendered. The Company agrees to maintain the effectiveness of the registration statement until Holder shall have sold all of the
Underlying Common, but in no event shall the Company be required to maintain the effectiveness of the registration statement for longer than six (6) months, provided, however, that at any time
beginning thirty (30) days after the registration statement becomes effective, the Company shall have the right to suspend the effectiveness of the registration statement one (1) time
during such six-month period due to the existence of material information that has not been disclosed to the public and included in the registration statement that would require an
amendment to the registration statement. Upon the exercise of such right, the Company shall advise the Common Recipients in writing that due to the existence of material information that has not been
disclosed to the public and included in the registration statement it is necessary to amend the registration statement, and the Common Recipients shall suspend any further sale of the Underlying
Common pursuant to the registration statement until the Company advises the Common Recipients that the registration statement has been amended. In such event, the Company shall cause the registration
statement to be amended within sixty (60) days. In the event the sales of the Underlying Common are suspended as provided above, the six-month period during which the registration
statement must be kept effective shall be extended for the total number of days during which sales are suspended. 

        (c)    Delivery of Certificates.    As promptly as practicable after any conversion of this Note and the Holder's
surrender of this Note, the Company, at its expense, shall issue and deliver to the Holder of this Note a certificate or certificates evidencing the number of shares of Underlying Common
issuable to the Holder upon any such conversion. 

        3.    Default.    If an "Event of Default" (as hereinafter defined) shall occur, then, and in each and every such
case, the Holder of this Note may by notice in writing to the Company declare all amounts under this Note to be forthwith due and payable (except that, in the case of an Event of Default under either
Section 3(e) or Section 3(f), this Note shall become immediately due and payable without notice) and thereupon the balance shall become so due and payable, without presentation, protest
or further demand or notice of any kind, all of which are hereby expressly waived. The Company covenants and agrees that, so long as this Note shall be outstanding, it will give prompt written notice
(with a description in reasonable detail) to the Holder of the occurrence of any Event of Default. 

2

 

        Each
of the following events shall be deemed an "Event of Default": 

        (a)  If
the Company shall default in the payment of any principal or interest due under this Note within five (5) days of the date the same shall become due and
payable, whether at maturity or by acceleration or otherwise; or 

        (b)  There
shall occur an event of default under the Settlement Agreement; or 

        (c)  If
the Company shall make a general assignment for the benefit of creditors; or 

        (d)  If
the Company shall file a voluntary petition in bankruptcy, or shall be adjudicated a bankrupt, shall become insolvent, or shall file any petition or answer
seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or any future federal bankruptcy act or other applicable federal, state
or other statute, law or regulation, or shall file any answer admitting the material allegation of a petition filed against the Company in such proceeding, or shall seek or consent to or acquiesce in
the appointment of any trustee, receiver or liquidator of the Company of all or any substantial part of the properties of the Company, or the Company shall commence the winding up or the dissolution
or liquidation of the Company; or 

        (e)  If,
within sixty (60) days after a court of competent jurisdiction shall have entered an order, judgment or decree approving any complaint or petition against the
Company seeking reorganization, dissolution or similar relief under the present or any future federal bankruptcy act or other applicable federal, state or other statute, law or regulation, such order,
judgment or decree shall not have been dismissed or stayed pending appeal, or if, within sixty (60) days after the appointment, without the consent or acquiescence of the Company, of any
trustee, receiver or liquidator of the Company or of all or any substantial part of the properties of the Company, such appointment shall not have been vacated or stayed pending appeal, or if, within
sixty (60) days after the expiration of any such stay, shall not have been vacated; or 

        (f)    In
the event of a liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or a sale, or a series of related sales, of all or
substantially all of the assets of the Company, or a sale, or a series of related sales, or exchange, of capital stock of the Company, either by the Company or its shareholders, such that the
Company's shareholders immediately before such transaction do not hold (by virtue of such shares or securities issued solely with respect thereto) more than fifty percent (50%) of the voting power on
an as-converted basis of the surviving or continuing entity, or a merger, consolidation, acquisition of property or shares, separation or reorganization of the Company with one or more
entities, corporate or otherwise, as a result of which the Company is not the surviving corporation or as a result of which the holders of stock of the Company immediately prior to the transaction do
not hold (by virtue of such shares or securities issued solely with respect thereto) more than fifty percent (50%) of the voting power on an as-converted basis of the surviving or
continuing entity; or 

        (g)  The
Company at any time shall not have authorized or reserved for issuance such number of shares as may be necessary to allow conversion of this Note at such times and
in such manner as contemplated under Sections 2(a) or 2(b) hereof. 

        4.    Transfer.    Upon surrender of this Note for transfer or exchange in whole or in part, a new Note or new Notes
of the same tenor, dated the date to which interest has been paid on the surrendered Note and in an aggregate principal amount equal to the unpaid principal amount of the Note so surrendered, will be
issued to and registered in the name of the transferee or transferees. The Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payments
and for all other purposes. 

3

 

        5.    Note Register.    This Note is transferable only upon the books of the Company which it shall cause to be
maintained for such purpose. The Company may treat the registered holder of this Note as he or it appears on the Company's books at any time as the Holder for all purposes. 

        6.    Loss, Etc., of Note.    Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of this Note, and of indemnity reasonably satisfactory to the Company if lost, stolen or destroyed, and upon surrender and cancellation of this Note if mutilated, the Company shall execute
and deliver to the Holder a new Note of like date, tenor and denomination. 

        7.    Amendment, Waiver Etc., By Holders.    The terms of this Note may be amended or waived only upon the written
consent of the Company and the Holder. 

        8.    Miscellaneous.    This Note shall be governed by and construed in accordance with the laws of the State of
Nevada. The Company hereby waives presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance, performance or enforcement of this
Note. If an action is brought for collection under this Note, the Holder shall be entitled to receive all costs of collection, including, but not limited to, its reasonable attorneys' fees. 

        IN
WITNESS WHEREOF, the undersigned has caused this Convertible Promissory Note to be executed by the undersigned officer thereunto duly authorized as of the date first set forth above. 

	 	 	PURCHASEPRO.COM, INC.,

A NEVADA CORPORATION
	

 	
 	

By:	
 	

	

 	
 	

Holder:
	

 	
 	
CHEYENNE INVESTMENTS, LLC,

A NEVADA LIMITED LIABILITY COMPANY
	

 	
 	

By:	
 	

4

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PURCHASEPRO.COM, INC., a Nevada corporation CONVERTIBLE PROMISSORY NOTE

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