Document:

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                           PURCHASE AND SALE AGREEMENT

     THIS Purchase and Sale Agreement (the "Agreement") is entered into this
____ day of December, 2001, by and between Texas T. Petroleum, Ltd., a Colorado
corporation ("Texas T"), Capital Reserve Corporation, a Colorado corporation
("Capital"), Pierre Jorgensen, a natural person residing in Les Roses des Hayes,
France ("PJ"), Carbon Resources, Limited., a Cyprus corporation ("Carbon"),
Lanisco Holdings, Limited., a Cyprus corporation ("Lanisco") and Synergy
Technologies Corporation, a Colorado corporation ("Synergy").

     WHEREAS, Texas T, Capital, PJ, Carbon, Lanisco and Synergy all have some
type of interest or claim in and to certain proprietary knowledge and
information for a super-heated steam application that converts heavy oil and
refinery bottoms into more usable, higher-API-gravity crude invented by PJ and
currently owned by Carbon (the "CPJ Technology");

     WHEREAS, Texas T, Capital, PJ, Carbon, Lanisco and Synergy have had
significant difficulty determining how to best commercially exploit the CPJ
Technology in order to maximize their individual and mutual benefit from such
exploitation; and

     WHEREAS, Texas T, Capital, PJ, Carbon, Lanisco and Synergy have now reached
agreement as to all the terms of the purchase and sale of Texas T's 50%
ownership interest in Carbon and all of said parties desire to set forth said
terms in this Agreement.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Texas T, Capital, PJ, Carbon,
Lanisco and Synergy hereby agree as follows:

     1.   Texas T owns 50% of the outstanding shares of the common stock of
          Carbon (the "Carbon Stock"). At Closing (as defined herein) Texas T
          will transfer to Synergy all of its right, title and interest in and
          to the Carbon Stock, free and clear of any and all claims, liens or
          encumbrances. Said transfer shall be accomplished by Texas T providing
          to Synergy any and all share certificates representing the Carbon
          Stock, along with properly executed stock powers allowing the
          negotiation and transfer of same.

     2.   At Closing, Synergy will issue to Texas T 400,000 shares of the common
          stock of Synergy, and deliver to Texas T a stock certificate dated as
          of the date of this agreement evidencing such shares in the name of
          Texas T. Said stock will be restricted from resale as required under
          applicable securities regulations and will be subject to all other
          rules and securities laws that may apply to said stock, including but
          not limited to SEC Rule 144 restrictions regarding the stock.

     3.   At Closing, Synergy shall also issue in the name of Texas T 1,900,000
          fully paid up and non assessable shares of the common stock of Synergy
          (the "Escrow Shares") and deliver a stock certificate evidencing the
          Escrow Shares in escrow to be held by an

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          escrow agent to be identified prior to closing (the "Escrow Holder")
          pursuant to an escrow agreement to be executed and delivered by
          Synergy, Texas T and the Escrow Holder at the Closing. The escrow
          agreement shall provide that the Escrow Shares shall remain in escrow
          until the earlier of the following to occur, at which time they shall
          be released to Texas T: (a) consummation or closing of a transaction
          regarding any interest in Carbon or the CPJ Technology as described in
          Section 14 hereof; or (b) the third anniversary of Closing of this
          Agreement; provided however, that the Escrow Shares shall not be
          released if Synergy, prior to the occurrence of either of the events
          described in subparagraphs (a) and (b) above, conveys all CPJ
          Technology rights held by Carbon and/or Lanisco as of the date of this
          Agreement to Texas T free and clear of all claims and encumbrances. In
          such event (i) Synergy shall be entitled to a 2.5% royalty for five
          (5) years upon income realized from the CPJ Technology on the same
          terms and conditions as set forth in paragraph 5 below and calculated
          in the manner defined in Section 2.1(g) of the Technology Agreement,
          and (ii) Synergy shall also be issued 500,000 fully paid up and non
          assessable shares of the common stock of Texas T (or in whatever
          entity Texas T placed ownership of the CPJ Technology) free and clear
          of all claims and encumbrances, which shall be restricted from resale
          as required under applicable securities regulations and will be
          subject to all other rules and securities laws that may apply to said
          stock, including but not limited to SEC Rule 144 restrictions
          regarding the stock. At or prior to Closing, Texas T shall reserve a
          total of 500,000 shares of its common stock upon its corporate records
          and minute books for the purposes contemplated herein. Following the
          release of the Escrow Shares to Texas T Synergy covenants that it
          shall not take any action to prevent the removal of the restrictive
          legend from any share certificates representing the Escrow Shares.

     4.   Synergy shall assume all of the liabilities of Capital contained in
          "THIS AMENDED AND RESTATED TECHNOLOGY TRANSFER AGREEMENT" as amended
          on September 25, 2000, a copy of which is attached hereto as Schedule
          "A" and forms a part hereof and is hereafter referred to as the
          "Technology Agreement" and indemnify and hold Capital harmless from
          any and all claims, demands and actions arising therefrom, unless such
          claims, demands or actions arise from any negligent, grossly negligent
          or intentional actions of Capital prior to the date of this Agreement.

     5.   Texas T shall be entitled to and Carbon shall pay to Texas T a 2.5%
          royalty in connection with and upon income realized from the CPJ
          Technology, to be calculated in the same manner as defined and
          stipulated in section 2.1(g) of the Technology Agreement. Said royalty
          payments shall be paid 30 days after the end of each quarter and shall
          accrue after payment by the customer. Said royalty rights shall last
          for a period of five (5) years, and shall commence on the date that
          the first 5,000 BOPD or greater CPJ Technology plant operates at 80%
          plus capacity.

     6.   Any party entitled to receive royalties under this Agreement during
          such times as a royalty payment obligation exists, shall have the
          right to inspect the books of account

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          relating to the CPJ Technology of the party obligated to remit royalty
          payments at reasonable hours and on reasonable notice through such
          accountants or agents as it may engage for that purpose.

     7.   At Closing, Synergy shall return to Texas T all Units consisting of
          stock and warrants owned by Synergy in Texas T or any of Texas T's
          parent entities, and all such stock and warrants shall be canceled,
          null and void after Closing.

     8.   At Closing, Carbon shall return to Texas T all Units consisting of
          stock and warrants owned by Carbon in Texas T or any of Texas T's
          parent entities, and all such stock and warrants shall be canceled,
          null and void after Closing.

     9.   At Closing, PJ shall surrender to Texas T 500,000 shares of the common
          stock of Capital.

     10.  At Closing, the parties will forever release each other from any and
          all claims, liabilities and obligations contained in or arising from
          the Technology Agreement or in connection with the CPJ Technology,
          except for any claims or obligations related or referring to the
          Technology Agreement as specifically set forth in this Agreement. The
          parties to this Agreement understand and agree that the royalty
          obligations payable in connection with the CPJ Technology as set forth
          herein and granted by this Agreement and the Technology Agreement
          shall survive regardless of whether or not Synergy or Texas T
          hereafter owns the CPJ Technology, or said technology is purchased,
          acquired, transferred or conveyed to some other party.

     11.  Upon execution of this Agreement, Texas T represents that it will take
          all steps necessary to immediately dissolve any injunctive relief, ex
          parte order or any other orders of any type or nature which have been
          issued within the context of Action No: 0101-21279 in the Court of
          Queens Bench of Alberta, Judicial District of Calgary, Canada, which
          relate to the relocation of CPJ or Carbon working assets from 335 25th
          Street, S.E., Calgary, Alberta, Canada to any other location. Texas T
          warrants that, except for the Court action described in this
          paragraph, it has filed no other action, suit or request for relief.

     12.  If, prior to the date that the Escrow Shares are released to Texas T
          and are fully free trading, Synergy should become bankrupt, insolvent
          or otherwise become financially incapable of commercially exploiting
          the CPJ Technology, then in that event, it shall transfer the CPJ
          Technology to Texas T. In the case of bankruptcy or insolvency, this
          obligation shall be deemed to be retroactive to the date this
          Agreement is signed in order to avoid any violation of bankruptcy or
          insolvency law or any other law pertaining to fraudulent preferences,
          including the Statutes of Elizabeth. If the Escrow Shares are released
          to Texas T, then Synergy shall have no other obligation, of any kind,
          to Texas T regarding the technology described in the Technology
          Agreement other than as set out in this Agreement, and as otherwise
          implied by law.

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     13.  If Synergy transfers the CPJ Technology to Texas T pursuant to
          Paragraph 3, and thereafter or at any time prior to release of the
          500,000 Texas T shares from resale restrictions Texas T should become
          bankrupt, insolvent or otherwise become financially incapable of
          commercially exploiting the technology described in the Technology
          Agreement, then in that event, Texas T shall transfer the CPJ
          Technology to Synergy. That obligation shall be deemed to be
          retroactive to the date this document was signed in order to avoid
          violation of any bankruptcy or insolvency law, or any law pertaining
          to fraudulent preferences including the Statutes of Elizabeth. If
          Texas T issues 500,000 shares as referenced in Paragraph 3 and such
          shares are not subject to any resale restrictions, then Texas T shall
          have no other obligation, of any kind, to Synergy regarding the
          technology described in the Technology Agreement other than as set out
          in this Agreement, and as otherwise implied by law. If, prior to the
          transfer of the technology to any third party, both Synergy and Texas
          T become bankrupt or insolvent, all parties to this Agreement
          acknowledge and agree to abide by the terms of that certain letter
          agreement executed by and between Texas T, Synergy and Laxarco Holding
          Ltd., a Cyprus corporation, dated June 25, 1999 (the "Letter
          Agreement") and attached hereto as Schedule "B". Should Laxarco
          Holding Ltd. elect not to perform under the terms of the "Letter
          Agreement", then PJ may repurchase the technology for one Dollar
          ($1.00).

     14.  Synergy and Carbon covenant with Texas T that until the date that the
          Escrow Shares are released to Texas T, Synergy shall not sell,
          transfer, convey, encumber or otherwise relinquish any majority
          ownership interest in Carbon or the CPJ technology, except to a bona
          fide third party pursuant to a bona fide arms-length business
          transaction. It is understood between the parties that this paragraph
          does not prohibit Synergy from dissolving Carbon and operating the CPJ
          Technology as a business unit of Synergy. Such a transaction shall not
          trigger any additional obligations pursuant to this paragraph or this
          Agreement.

     15.  In the event that Synergy and/or Carbon enters into an agreement for
          the sale, transfer, conveyance, encumbrance or other relinquishment of
          more than 50% interest in Carbon or the CPJ technology in accordance
          with paragraph 14 above, prior to the release of the Escrow Shares,
          such sale or transfer shall be accompanied by: (a) the release from
          escrow and delivery to Texas T of the Escrow Shares and (b) the Escrow
          Shares being registered in an effective registration statement filed
          with the Securities and Exchange Commission within 120 days of such
          agreement for transfer. It is understood between the parties that this
          paragraph does not prohibit Synergy from dissolving Carbon and
          operating the CPJ Technology as a business unit of Synergy. Such a
          transaction shall not trigger any additional obligations pursuant to
          this paragraph or this Agreement.

     16.  Each of the parties to this Agreement represent and warrant to each of
          the other parties hereto that as of the date of execution of this
          Agreement and as of the Closing

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          that:

          (a)  With the exception of PJ, it is and, as of the date of Closing,
               will be an entity duly organized, validly existing, and in good
               standing under the laws of the jurisdiction in which it is
               organized and, as of the date of Closing, will be duly qualified
               to do business as a foreign corporation in each jurisdiction
               where the ownership of its property or the conduct of its
               business makes such qualification necessary to enable it to
               enforce all material contracts and to avoid any material penalty;

          (b)  It or he has complete and unrestricted power to enter into this
               Agreement and this Agreement constitutes a legal, valid, and
               binding obligation on them individually or their respective
               entities, enforceable against each of them in accordance with its
               terms, subject only to Texas T and Synergy obtaining the
               approvals specified in paragraph 17 below;

          (c)  Subject to Texas T and Synergy obtaining the approvals specified
               in paragraph 17 below, the execution, delivery, and performance
               of this Agreement by each party hereto does not and, as of the
               date of Closing, will not violate, conflict with, or constitute a
               default under any parties' organizational documents or bylaws, or
               any agreement to which they are a party, or any applicable law or
               regulation, or order or decree of court, or administrative body,
               or result in the creation or imposition of any lien, claim, or
               encumbrance of any nature whatsoever upon any of the assets to be
               conveyed hereunder, except as specified in this Agreement. The
               execution, delivery and performance hereof by the parties hereto
               has been duly authorized by their respective members, managers,
               shareholders and directors; and all necessary consents and
               approvals to the transactions contemplated in this Agreement have
               been obtained by each party hereto;

          (d)  The parties hereto have good and marketable title to the assets
               and stock to be sold and conveyed hereunder, subject to no
               mortgage, pledge, lien, encumbrance, security interest,
               restriction or charge, and all such assets and stock remain
               within the possession, custody and control of the parties hereto;

          (e)  From the date hereof until the date of Closing, each party hereto
               will operate and conduct its business only in the normal and
               ordinary course, will not waive any right or cancel any debt or
               claims, or make any commitments or expenditures, or dispose of
               any property except in each case in the ordinary course of
               business;

          (f)  To the best of the knowledge and belief of each party hereto, no
               representation or warranty by any party in this Agreement nor any
               statement

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               or certificate furnished or to be furnished pursuant hereto, or
               in connection with the transactions contemplated hereby, contains
               or will contain any untrue statement of a material fact, or omits
               or will omit to state a material fact necessary in order to make
               the statements in the light of the circumstances under which they
               were made, not misleading;

          (g)  The foregoing representations and warranties are made by each
               party hereto with the knowledge and expectation that the other
               parties hereto are placing complete reliance thereon. No
               examinations, inspections, or investigations by any party hereto
               or its agents, representatives, or independent contractors shall
               modify or diminish the obligations of each party hereto with
               respect to their warranties and representations set forth herein;
               and

          (h)  There are no undisclosed material transactions currently pending,
               contemplated or under negotiation concerning the development or
               commercialization of the CPJ Technology.

     17.  The obligation of each party hereto to close this transaction is
          subject to the fulfillment by Texas T Resources, Inc., an Alberta
          Corporation, and Synergy, prior to or on the date of Closing, of the
          following conditions:

          (a)  Approval of the terms of this Agreement by vote of the requisite
               number of the shareholders of Texas T Resources, Inc., at a
               meeting of its shareholders to be held on January 25th, 2002;

          (b)  Regulatory approval of the transactions proposed herein by the
               Canadian Venture Exchange, on or before the date of Closing.

          (c)  Approval of the terms of this Agreement by vote of the requisite
               number of the shareholders of Synergy at a meeting of its
               shareholders to be held in January, 2002.

          In the event that any of the approvals contemplated in this paragraph
          are not obtained upon application therefore by the parties, then in
          that event, Carbon shall give Texas T access to the working assets of
          Carbon relative to the CPJ Technology for inspection and evaluation
          purposes at reasonable hours and on reasonable notice regardless of
          the location of such equipment. Notwithstanding the provisions of
          paragraph 25 hereunder, in the event that the inspection rights of
          Texas T under this paragraph are breached or violated, then in that
          event, Texas T may make application to the Court of the jurisdiction
          in which the assets are located for appropriate relief.

     18.  The closing of the contemplated transfers of stock and purchases and
          sales contemplated hereby (the "Closing") shall take place at the
          offices of Synergy, located at 335 25th Street, S.E., Calgary,
          Alberta, Canada at 10:00 a.m. on March 1,

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          2002, or at such other time and place as the parties shall mutually
          agree. To effect such Closing:

          (a)  Texas T shall:

               (i) deliver to Synergy all of its share certificates for Carbon
          Stock, along with appropriate stock powers to effect the transfer of
          same;

               (ii) deliver to Synergy such general assignments and conveyances
          warranty bills of sale, and other endorsements, assignments and
          instruments of transfer, assignment and conveyance as shall be
          effective to vest in Synergy good and marketable title to Carbon Stock
          or any other assets to be conveyed hereunder, subject to no claims,
          liens or encumbrances;

               (iii) from time to time at Synergy's request, whether at or after
          Closing, and without further consideration, execute such other and
          further instruments and documents as Synergy may reasonably request to
          more effectively convey, assign and transfer the assets to be conveyed
          or sold to Synergy hereunder including, without limitation, procuring
          any necessary consents or approvals to effect such transfers or sales.

          (b)  Synergy shall:

               (i) deliver to Texas T a certificate for 400,000 fully paid up
          and non assessable shares of Synergy's common stock free and clear of
          all claims and encumbrances and dated as of the date of this Agreement
          and shall deliver to the Escrow Holder 1,900,000 fully paid up and non
          assessable shares of the common stock of Synergy;

               (ii) deliver to Texas T such certificates, general assignments
          and conveyances, warranty bills of sale, and other endorsements,
          assignments and instruments of transfer, assignment and conveyance as
          shall be necessary to effect the return to Texas T of all Units
          consisting of stock and warrants owned by Synergy in Texas T or any of
          Texas T's parent entities;

               (iii) from time to time at Texas T's request, whether at or after
          Closing, and without further consideration, execute such other and
          further instruments and documents as Texas T may reasonably request to
          more effectively convey, assign and transfer the assets to be conveyed
          or sold to Texas T hereunder including, without limitation, procuring
          any necessary consents or approvals to effect such transfers or sales.

          (c)  PJ shall:

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               (i) surrender to Texas T 500,000 shares of the common stock of
          Capital;

               (ii) deliver to Texas T such certificates, general assignments
          and conveyances, warranty bills of sale, and other endorsements,
          assignments and instruments of transfer, assignment and conveyance as
          shall be necessary to effect the transfer to Texas T of the
          above-referenced common stock of Capital;

               (iii) from time to time at Texas T's request, whether at or after
          Closing, and without further consideration, execute such other and
          further instruments and documents as Texas T may reasonably request to
          more effectively convey, assign and transfer the assets to be conveyed
          or sold to Texas T hereunder including, without limitation, procuring
          any necessary consents or approvals to effect such transfers or sales.

          (d)  Carbon shall:

               (i) deliver to Texas T such certificates, general assignments and
          conveyances, warranty bills of sale, and other endorsements,
          assignments and instruments of transfer, assignment and conveyance as
          shall be necessary to effect the return to Texas T of all Units
          consisting of stock and warrants owned by Carbon in Texas T or any of
          Texas T's parent entities;

               (ii) from time to time at Texas T's request, whether at or after
          Closing, and without further consideration, execute such other and
          further instruments and documents as Texas T may reasonably request to
          more effectively convey, assign and transfer the assets to be conveyed
          or sold to Texas T hereunder including, without limitation, procuring
          any necessary consents or approvals to effect such transfers or sales.

     19.  The terms of this Agreement shall be binding upon, inure to the
          benefit of, and be enforceable by each of the parties to this
          Agreement, their heirs, legal representatives, successors and assigns.
          All representations, warranties and covenants contained herein by any
          party hereto, or contained in any document or certificate to be
          delivered by any party hereto at Closing, shall survive the Closing.

     20.  This Agreement and its terms constitute the entire agreement of the
          parties and supersede any and all prior agreements between the
          parties, written or oral, with respect to the transactions
          contemplated hereby. This Agreement may not be changed or terminated
          orally, but may only be changed by an agreement in writing signed by
          all the parties hereto.

     21.  No party hereto may assign his, her or its rights hereunder to any
          other party without

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          the prior written consent of every other party hereto, which consents
          will not be unreasonably withheld.

     22.  The parties hereto acknowledge that monetary damages may not
          adequately compensate the other parties hereto in the event of a
          breach or threatened breach of this Agreement by any other party
          hereto. Thus, each party hereto understands and agrees that each and
          every party hereto shall be entitled to all and any remedies whether
          at law or in equity including the recovery of damages for breach or
          threatened breach of any covenant contained herein, as well as being
          entitled to obtain specific performance of the terms of this Agreement
          from any party who fails to perform hereunder this Agreement. Further,
          the parties hereto agree not to assert and do hereby waive as a
          defense to any action for injunction, equitable relief or specific
          performance brought to enforce an obligation of any party hereunder,
          the defense that an adequate remedy of law exists or should preclude
          the entry of any such injunction, restraining order, equitable relief
          or order of specific performance.

     23.  This Agreement may be executed in multiple counterparts and by
          facsimile signature, each copy of which will be deemed an original,
          but all of which when taken together shall constitute one and the same
          document.

     24.  Each party shall be responsible for its own costs, legal fees, and
          expenses in the negotiation and consummation of the proposed
          transactions.

     25.  This agreement shall be interpreted under the laws of Alberta, Canada,
          and any dispute arising from any matter contained in or referred to in
          this agreement shall be brought before a court of competent
          jurisdiction in that jurisdiction.

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In witness whereof the parties have hereunto set their hands and/or seals under
the hand of an officer duly authorized for that purpose as of the date above
written.

TEXAS T PETROLEUM, LTD.                     SYNERGY TECHNOLOGIES
                                            CORPORATION

By:________________________________         By:_________________________________

Title:______________________________        Title:______________________________

CAPITAL RESERVE
CORPORATION                                 PIERRE JORGENSEN

By:________________________________         ____________________________________

Title:______________________________

CARBON RESOURCES, LIMITED                   LANISCO HOLDINGS, LIMITED

By:________________________________         By:_________________________________

Title:______________________________        Title:______________________________

                                       10<PAGE>

                                                                  EXECUTION COPY

                         COMMON STOCK PURCHASE AGREEMENT

     COMMON STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of June 20,
2002 by and between SYNERGY TECHNOLOGIES CORPORATION, a Colorado corporation
(the "Company"), and FUSION CAPITAL FUND II, LLC, an Illinois limited liability
company (the "Buyer"). Capitalized terms used herein and not otherwise defined
herein are defined in Section 10 hereof.

                                    WHEREAS:

     Subject to the terms and conditions set forth in this Agreement, the
Company wishes to sell to the Buyer, and the Buyer wishes to buy from the
Company, up to Six Million Dollars ($6,000,000) of the Company's common stock,
par value $0.002 per share (the "Common Stock"). The shares of Common Stock to
be purchased hereunder are referred to herein as the "Purchase Shares."

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

     1.   PURCHASE OF COMMON STOCK.

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

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

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

<PAGE>

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

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

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

          (iii) Company's Right to Increase the Daily Purchase Amount. The
     Company shall have the right (but not the obligation) to increase the
     amount of the Daily Purchase Amount in accordance with the terms and
     conditions set forth in this Section 1(c)(iii) by delivering written notice
     to the Buyer stating the new amount of the Daily Purchase Amount (a "Daily
     Purchase Amount Increase Notice"). A Daily Purchase Amount Increase Notice
     shall be effective five (5) Trading Days after receipt by the Buyer. The
     Company shall always have the right at any time to increase the amount of
     the Daily Purchase Amount up to the Original Daily Purchase Amount. With
     respect to increases in the Daily Purchase Amount above the Original Daily
     Purchase Amount, as the market price for the Common Stock increases the
     Company shall have the right from time to time to increase the Daily
     Purchase Amount as follows. For every $0.25 increase in Threshold Price
     above $0.50 (subject to equitable adjustment for any reorganization,
     recapitalization, non-cash dividend, stock split or other similar
     transaction), the Company shall have the right to increase the Daily
     Purchase Amount by up to an additional $2,500 in excess of the Original
     Daily Purchase Amount. "Threshold Price" for purposes hereof means the
     lowest Sale Price of the Common Stock during the five (5) consecutive
     Trading Days immediately prior to the submission to the Buyer of a Daily
     Purchase Amount Increase Notice (subject to equitable adjustment for any
     reorganization, recapitalization, non-cash dividend, stock split or other
     similar transaction). For example, if the Threshold Price is $0.75, the
     Company shall have the right to increase the Daily Purchase Amount to up to
     $12,500 in the aggregate. If the Threshold Price is $2.00, the Company
     shall have the right to increase the Daily Purchase Amount to up to $25,000
     in the aggregate. Any increase in the amount of the Daily Purchase Amount
     shall continue in effect until the delivery to the Buyer of a Daily
     Purchase Amount Decrease Notice. However, if at any time during any Trading
     Day the Sale Price of the Common Stock is below the applicable Threshold
     Price, such increase in the Daily Purchase Amount shall be void and the
     Buyer's obligations to buy Purchase Shares hereunder in excess of the
     applicable maximum Daily Purchase Amount shall be terminated. Thereafter,
     the Company shall again have the right to increase the amount of the Daily
     Purchase Amount as set forth herein by delivery of a new Daily Purchase
     Amount Increase Notice only if the Sale Price of the Common Stock is above
     the applicable Threshold Price on each of five (5) consecutive Trading Days
     immediately prior to such new Daily Purchase Amount Increase Notice.

                                       2
<PAGE>

     (d)  Limitations on Purchases.

          (i) Limitation on Beneficial Ownership. The Company shall not effect
     any sale under this Agreement and the Buyer shall not have the right to
     purchase shares of Common Stock under this Agreement to the extent that
     after giving effect to such purchase the Buyer together with its affiliates
     would beneficially own in excess of 4.9% of the outstanding shares of the
     Common Stock following such purchase. For purposes hereof, the number of
     shares of Common Stock beneficially owned by the Buyer and its affiliates
     or acquired by the Buyer and its affiliates, as the case may be, shall
     include the number of shares of Common Stock issuable in connection with a
     purchase under this Agreement with respect to which the determination is
     being made, but shall exclude the number of shares of Common Stock which
     would be issuable upon (1) a purchase of the remaining Available Amount
     which has not been submitted for purchase, and (2) exercise or conversion
     of the unexercised or unconverted portion of any other securities of the
     Company (including, without limitation, any warrants) subject to a
     limitation on conversion or exercise analogous to the limitation contained
     herein beneficially owned by the Buyer and its affiliates. If the 4.9%
     limitation is ever reached the Company shall have the option to increase
     such limitation to 9.9% by delivery of written notice to the Buyer.
     Thereafter, if the 9.9% limitation is ever reached this shall not affect or
     limit the Buyer's obligation to purchase the Daily Purchase Amount as
     otherwise provided in this Agreement. For purposes of this Section, in
     determining the number of outstanding shares of Common Stock the Buyer may
     rely on the number of outstanding shares of Common Stock as reflected in
     (1) the Company's most recent Form 10-Q or Form 10-K, as the case may be,
     (2) a more recent public announcement by the Company or (3) any other
     written communication by the Company or its Transfer Agent setting forth
     the number of shares of Common Stock outstanding. Upon the reasonable
     written or oral request of the Buyer, the Company shall promptly confirm
     orally and in writing to the Buyer the number of shares of Common Stock
     then outstanding. In any case, the number of outstanding shares of Common
     Stock shall be determined after giving effect to any purchases under this
     Agreement by the Buyer since the date as of which such number of
     outstanding shares of Common Stock was reported. Except as otherwise set
     forth herein, for purposes of this Section 1(d)(i), beneficial ownership
     shall be determined in accordance with Section 13(d) of the Securities
     Exchange Act of 1934, as amended.

          (ii) Company's Right to Suspend Purchases. The Company may, at any
     time, give written notice (a "Purchase Suspension Notice") to the Buyer
     suspending purchases of Purchase Shares by the Buyer under this Agreement.
     The Purchase Suspension Notice shall be effective only for purchases that
     have a Purchase Date later than one (1) Trading Day after receipt of the
     Purchase Suspension Notice by the Buyer. Any purchase by the Buyer that has
     a Purchase Date on or prior to the first (1st) Trading Day after receipt by
     the Buyer of a Purchase Suspension Notice from the Company must be honored
     by the Company as otherwise provided herein. Such purchase suspension shall
     continue in effect until a revocation in writing by the Company, at its
     sole discretion. So long as a Purchase Suspension Notice is in effect, the
     Buyer shall not be obligated to purchase any Purchase Shares from the
     Company under Section 1 of this Agreement.

          (iii) Purchase Price Floor. The Buyer shall not have the right or the
     obligation to purchase any Purchase Shares under this Agreement in the
     event that the Purchase Price for any purchases of Purchase Shares would be
     less than the Floor Price. The Company may at any time give written notice
     (a "Floor Price Notice") to the Buyer increasing or decreasing the Floor
     Price. The Floor Price Notice shall be effective only for purchases that
     have a Purchase Date later than one (1) Trading Day after receipt of the
     Floor Price Notice by the Buyer. Any purchase by the

                                       3
<PAGE>

     Buyer that has a Purchase Date on or prior to the first Trading Day after
     receipt of a Floor Price Notice from the Company must be honored by the
     Company as otherwise provided herein.

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

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

     2.   BUYER'S REPRESENTATIONS AND WARRANTIES.

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

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

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

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

     (d) Information. The Buyer has been furnished with all materials relating
to the business, finances and operations of the Company and materials relating
to the offer and sale of the Securities that have been reasonably requested by
the Buyer, including, without limitation, the SEC Documents (as defined in
Section 3(f) hereof). The Buyer understands that its investment in the
Securities involves a high degree of risk. The Buyer (i) is able to bear the
economic risk of an investment in the Securities including a total loss, (ii)
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the proposed investment in the
Securities and (iii) has had an opportunity to ask questions of and receive
answers from the officers of the Company concerning the financial condition and
business of the Company and others matters related to an investment in the
Securities. Neither such inquiries nor any other due diligence investigations
conducted by the Buyer or its representatives shall modify, amend or affect the
Buyer's right to rely on the Company's representations and warranties contained
in Section 3 below. The Buyer has sought such accounting, legal and tax advice
as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Securities.

                                       4
<PAGE>

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

     (f) Transfer or Resale. The Buyer understands that except as provided in
the Registration Rights Agreement (as defined in Section 6(a) hereof): (i) the
Securities have not been and are not being registered under the 1933 Act or any
state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder or (B) an exemption
exists permitting such Securities to be sold, assigned or transferred without
such registration; (ii) any sale of the Securities made in reliance on Rule 144
may be made only in accordance with the terms of Rule 144 and further, if Rule
144 is not applicable, any resale of the Securities under circumstances in which
the seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 1933 Act) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the
SEC thereunder; and (iii) neither the Company nor any other person is under any
obligation to register the Securities under the 1933 Act or any state securities
laws or to comply with the terms and conditions of any exemption thereunder.

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

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

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

     3.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

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

     (a) Organization and Qualification. The Company and its "Subsidiaries"
(which for purposes of this Agreement means any entity in which the Company,
directly or indirectly, owns 50% or more of the voting stock or capital stock or
other similar equity interests) are corporations duly organized and validly
existing in good standing under the laws of the jurisdiction in which they are
incorporated, and have the requisite corporate power and authority to own their
properties and to carry on their business as now being conducted. Each of the
Company and its Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which its ownership of
property or the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing could not reasonably be expected to have a Material Adverse
Effect. As used in this Agreement, "Material Adverse Effect" means any material
adverse effect on any of: (i) the business, properties, assets, operations,
results of operations or financial condition of the Company and its
Subsidiaries, if any, taken as a whole, or (ii) the authority or ability of

                                       5
<PAGE>

the Company to perform its obligations under the Transaction Documents (as
defined in Section 3(b) hereof). The Company has no Subsidiaries except as set
forth on Schedule 3(a).

     (b) Authorization; Enforcement; Validity. (i) The Company has the requisite
corporate power and authority to enter into and perform its obligations under
this Agreement, the Registration Rights Agreement (as defined in Section 6(a)
hereof) and each of the other agreements entered into by the parties on the
Commencement Date and attached hereto as exhibits to this Agreement
(collectively, the "Transaction Documents"), and to issue the Securities in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
the Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including without limitation, the
issuance of the Commitment Shares and the reservation for issuance and the
issuance of at least 6,000,000 Purchase Shares which may be issued under this
Agreement, have been duly authorized by the Company's Board of Directors and no
further consent or authorization is required by the Company, its Board of
Directors or its shareholders, (iii) this Agreement has been, and each other
Transaction Document shall be on the Commencement Date, duly executed and
delivered by the Company and (iv) this Agreement constitutes, and each other
Transaction Document upon its execution on behalf of the Company, shall
constitute, the valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies. The
Board of Directors of the Company has approved the resolutions (the "Signing
Resolutions") substantially in the form as set forth as Exhibit D-1 attached
hereto to authorize this Agreement and the transactions contemplated hereby. The
Signing Resolutions are valid, in full forth and effect and have not been
modified or supplement in any respect other than by the resolutions set forth in
Exhibit D-2 attached hereto regarding the registration statement referred to in
Section 4 hereof. The Company has delivered to the Buyer a true and correct copy
of a unanimous written consent adopting the Signing Resolutions executed by all
of the members of the Board of Directors of the Company. No other approvals or
consents of the Company's Board of Directors and/or shareholders is necessary
under applicable laws and the Company's Certificate of Incorporation and/or
Bylaws to authorize the execution and delivery of this Agreement or any of the
transactions contemplated hereby, including, but not limited to, the issuance of
the Commitment Shares and the issuance of the Purchase Shares

     (c) Capitalization. As of the date hereof, the authorized capital stock of
the Company consists of 100,000,000 shares of Common Stock, of which as of the
date hereof, 39,605,537 shares are issued and outstanding, none are held as
treasury shares, 13,409,356 shares are reserved for issuance pursuant to the
Company's stock option plans of which only approximately 5,929,856 shares remain
available and 11,429,631 shares are issuable and reserved for issuance pursuant
to securities (other than stock options issued pursuant to the Company's stock
option plans) exercisable or exchangeable for, or convertible into, shares of
Common Stock. All of such outstanding shares have been, or upon issuance will
be, validly issued and are fully paid and nonassessable. Except as disclosed in
Schedule 3(c), (i) no shares of the Company's capital stock are subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company, (ii) there are no outstanding debt
securities, (iii) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, (iv) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register

                                       6
<PAGE>

the sale of any of their securities under the 1933 Act (except the Registration
Rights Agreement), (v) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries, (vi) there
are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities as described in this
Agreement and (vii) the Company does not have any stock appreciation rights or
"phantom stock" plans or agreements or any similar plan or agreement. The
Company has furnished to the Buyer true and correct copies of the Company's
Certificate of Incorporation, as amended and as in effect on the date hereof
(the "Certificate of Incorporation"), and the Company's By-laws, as amended and
as in effect on the date hereof (the "By-laws"), and summaries of the terms of
all securities convertible into or exercisable for Common Stock, if any, and
copies of any documents containing the material rights of the holders thereof in
respect thereto.

     (d) Issuance of Securities. The Commitment Shares have been duly authorized
and, upon issuance in accordance with the terms hereof, the Commitment Shares
shall be (i) validly issued, fully paid and non-assessable and (ii) free from
all taxes, liens and charges with respect to the issue thereof. 6,000,000 shares
of Common Stock have been duly authorized and reserved for issuance upon
purchase under this Agreement. 202,020 shares of Common Stock (subject to
equitable adjustment for any reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction) have been duly authorized
and reserved for issuance as Additional Commitment Shares in accordance with
Section 4(f) this Agreement. Upon issuance and payment therefore in accordance
with the terms and conditions of this Agreement, the Purchase Shares shall be
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issue thereof, with the holders being entitled to
all rights accorded to a holder of Common Stock.

     (e) No Conflicts. Except as disclosed in Schedule 3(e), the execution,
delivery and performance of the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the reservation for issuance and issuance of the
Purchase Shares) will not (i) result in a violation of the Certificate of
Incorporation, any Certificate of Designations, Preferences and Rights of any
outstanding series of preferred stock of the Company or the By-laws or (ii)
conflict with, or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a
party, or result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations and the
rules and regulations of the Principal Market applicable to the Company or any
of its Subsidiaries) or by which any property or asset of the Company or any of
its Subsidiaries is bound or affected, except in the case of conflicts, defaults
and violations under clause (ii), which could not reasonably be expected to
result in a Material Adverse Effect. Except as disclosed in Schedule 3(e),
neither the Company nor its Subsidiaries is in violation of any term of or in
default under its Certificate of Incorporation, any Certificate of Designation,
Preferences and Rights of any outstanding series of preferred stock of the
Company or By-laws or their organizational charter or by-laws, respectively.
Except as disclosed in Schedule 3(e), neither the Company nor any of its
Subsidiaries is in violation of any term of or is in default under any material
contract, agreement, mortgage, indebtedness, indenture, instrument, judgment,
decree or order or any statute, rule or regulation applicable to the Company or
its Subsidiaries, except for possible conflicts, defaults, terminations or
amendments which could not reasonably be expected to have a Material Adverse
Effect. The business of the Company and its Subsidiaries is not being conducted,
and shall not be conducted, in violation of any law, ordinance, regulation of
any governmental entity, except for possible violations, the sanctions for which
either individually or in the aggregate could not reasonably

                                       7
<PAGE>

be expected to have a Material Adverse Effect. Except as specifically
contemplated by this Agreement and as required under the 1933 Act or applicable
state securities laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self-regulatory agency in order for it
to execute, deliver or perform any of its obligations under or contemplated by
the Transaction Documents in accordance with the terms hereof or thereof. Except
as disclosed in Schedule 3(e), all consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence shall be obtained or effected on or prior to the Commencement Date.
Except as listed in Schedule 3(e), since January 1, 2000, the Company has not
received nor delivered any notices or correspondence from or to the Principal
Market. The Principal Market has not commenced any delisting proceedings against
the Company.

     (f) SEC Documents; Financial Statements. Except as disclosed in Schedule
3(f), since January 1, 2001, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the "1934 Act") (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein being hereinafter
referred to as the "SEC Documents"). As of their respective dates (except as
they have been correctly amended), the SEC Documents complied in all material
respects with the requirements of the 1934 Act and the rules and regulations of
the SEC promulgated thereunder applicable to the SEC Documents, and none of the
SEC Documents, at the time they were filed with the SEC (except as they may have
been properly amended), contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. As of their respective dates (except as they
have been properly amended), the financial statements of the Company included in
the SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto. Such financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except as listed in
Schedule 3(f), the Company has received no notices or correspondence from the
SEC since January 1, 2001. The SEC has not commenced any enforcement proceedings
against the Company or any of its subsidiaries.

     (g) Absence of Certain Changes. Except as disclosed in Schedule 3(g), since
March 31, 2002, there has been no material adverse change in the business,
properties, operations, financial condition or results of operations of the
Company or its Subsidiaries. The Company has not taken any steps, and does not
currently expect to take any steps, to seek protection pursuant to any
Bankruptcy Law nor does the Company or any of its Subsidiaries have any
knowledge or reason to believe that its creditors intend to initiate involuntary
bankruptcy or insolvency proceedings. The Company is financially solvent and is
generally able to pay its debts as they become due.

     (h) Absence of Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened against or affecting the Company, the
Common Stock or any of the Company's Subsidiaries or any of the Company's or the

                                       8
<PAGE>

Company's Subsidiaries' officers or directors in their capacities as such, which
could reasonably be expected to have a Material Adverse Effect. A description of
each action, suit, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body which, as
of the date of this Agreement, is pending or threatened in writing against or
affecting the Company, the Common Stock or any of the Company's Subsidiaries or
any of the Company's or the Company's Subsidiaries' officers or directors in
their capacities as such, is set forth in Schedule 3(h).

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

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

     (k) Dilutive Effect. The Company understands and acknowledges that the
number of Purchase Shares purchasable under this Agreement is not fixed and will
vary depending on the Purchase Price at which such shares are purchased. The
Company further acknowledges that its obligation to issue Purchase Shares under
this Agreement in accordance with the terms and conditions hereof is absolute
and unconditional regardless of the dilutive effect that such issuance may have
on the ownership interests of other shareholders of the Company.

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

     (m) Environmental Laws. The Company and its Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or

                                       9
<PAGE>

contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where, in each of the
three foregoing clauses, the failure to so comply could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

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

     (o) Insurance. The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its Subsidiaries, taken as a whole.

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

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

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

                                       10
<PAGE>

which any officer, director, or any such employee has an interest or is an
officer, director, trustee or partner.

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

     (t) Foreign Corrupt Practices. Neither the Company, nor any of its
Subsidiaries, nor any director, officer, agent, employee or other person acting
on behalf of the Company or any of its Subsidiaries has, in the course of its
actions for, or on behalf of, the Company, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the U.S. Foreign Corrupt
Practices Act of 1977, as amended; or made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

     4.   COVENANTS.

     (a) Filing of Registration Statement. The Company shall within ten (10)
Trading Days from the date hereof file a new registration statement covering the
sale of the Commitment Shares and at least 6,000,000 Purchase Shares. The Buyer
and its counsel shall have a reasonable opportunity to review and comment upon
such registration statement or amendment to such registration statement and any
related prospectus prior to its filing with the SEC. Buyer shall furnish all
information reasonably requested by the Company for inclusion therein. The
Company shall use its best efforts to have such registration statement or
amendment declared effective by the SEC at the earliest possible date.

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

     (c) Notice of Variable Priced Financing. The Company agrees to provide to
the Buyer prior written notice ("Equity Financing Notice") of any equity
financing (including any debt financing with an equity component) that the
Company intends to enter into involving the issuance of any equity securities of
the Company or any Subsidiary or securities convertible or exchangeable into or
for equity securities of the Company or any Subsidiary (including debt
securities with an equity component) which, in any case (i) are convertible into
or exchangeable for an indeterminate number of shares of common stock, (ii) are
convertible into or exchangeable for Common Stock at a price which varies with
the market price of the Common Stock, (iii) directly or indirectly provide for
any "re-set" or adjustment of the purchase price, conversion rate or exercise
price after the issuance of the security, or (iv) contain any "make-whole"
provision based upon, directly or indirectly, the market price of the Common
Stock after the issuance of the security, in each case, other than reasonable
and customary anti-dilution adjustments for issuance of shares of Common Stock
at a price which is below the market price of the Common Stock.

                                       11
<PAGE>

Such Equity Financing Notice shall be delivered to the Buyer five (5) Trading
Days prior to the Company entering into definitive documentation with respect to
such equity financing, together with copies of all proposed definitive
documentation relating to such equity financing.

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

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

     (f) Issuance of Commitment Shares; Limitation on Sales of Commitment
Shares. Immediately upon the execution of this Agreement, the Company shall
issue to the Buyer 424,041 shares of Common Stock (the "Initial Commitment
Shares"). The Initial Commitment Shares include 20,000 shares of Common Stock to
be paid to the Buyer as an expense reimbursement. In connection with each
purchase of Purchase Shares hereunder, the Company agrees to issue to the Buyer
a number of shares of Common Stock (the "Additional Commitment Shares" and
together with the Initial Commitment Shares, the "Commitment Shares") equal to
the product of (x) 202,020 and (y) the Purchase Amount Fraction. The "Purchase
Amount Fraction" shall mean a fraction, the numerator of which is the Purchase
Amount purchased by the Buyer with respect to such purchase of Purchase Shares
and the denominator of which is Six Million Dollars ($6,000,000). The Additional
Commitment Shares shall be equitably adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction.
The Initial Commitment Shares shall be issued in certificated form and (subject
to Section 5 hereof) shall bear the following restrictive legend:

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

                                       12
<PAGE>

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

     (g) Due Diligence. The Buyer shall have the right, from time to time as the
Buyer may reasonably deem appropriate, to perform reasonable due diligence on
the Company during normal business hours. The Company and its officers and
employees shall reasonably cooperate with the Buyer in connection with any
reasonable request by the Buyer related to the Buyer's due diligence of the
Company. Each party hereto agrees not to disclose any Confidential Information
of the other party to any third party and shall not use the Confidential
Information for any purpose other than in connection with, or in furtherance of,
the transactions contemplated hereby. Each party hereto acknowledges that the
Confidential Information shall remain the property of the disclosing party and
agrees that it shall take all reasonable measures to protect the secrecy of any
Confidential Information disclosed by the other party.

     5.   TRANSFER AGENT INSTRUCTIONS.

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

                                       13
<PAGE>

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

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

     (a) The Buyer shall have executed each of the Transaction Documents and
delivered the same to the Company including the Registration Rights Agreement
substantially in the form of EXHIBIT A hereto (the "Registration Rights
Agreement").

     (b) Subject to the Company's compliance with Section 4(a), a registration
statement covering the sale of all of the Commitment Shares, and at least
6,000,000 Purchase Shares shall have been declared effective under the 1933 Act
by the SEC and no stop order with respect to the Registration Statement shall be
pending or threatened by the SEC.

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

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

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

     (a) The Company shall have executed each of the Transaction Documents and
delivered the same to the Buyer including the Registration Rights Agreement
substantially in the form of EXHIBIT A hereto.

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

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

                                       14
<PAGE>

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

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

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

     (g) As of the Commencement Date, the Company shall have reserved out of its
authorized and unissued Common Stock 6,202,020 shares of Common Stock, 6,000,000
shares solely for the purpose of effecting purchases of Purchase Shares
hereunder and 202,020 shares to be issued as Additional Commitment Shares in
accordance with Section 4(f) hereof.

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

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

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

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

     (l) A registration statement covering the sale of all of the Commitment
Shares and at least 6,000,000 Purchase Shares shall have been declared effective
under the 1933 Act by the SEC and no stop order with respect to the registration
statement shall be pending or threatened by the SEC. The Company shall have
prepared and delivered to the Buyer a final form of prospectus to be used by the
Buyer in connection with any sales of any Commitment Shares or any Purchase
Shares. The Company shall have made all filings under all applicable federal and
state securities laws necessary to consummate the issuance of the Commitment
Shares and the Purchase Shares pursuant to this Agreement in compliance with
such laws.

                                       15
<PAGE>

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

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

     8.   INDEMNIFICATION.

     In consideration of the Buyer's execution and delivery of the Transaction
Documents and acquiring the Securities hereunder and in addition to all of the
Company's other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless the Buyer and all of its
affiliates, shareholders, officers, directors, employees and direct or indirect
investors and any of the foregoing person's agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Indemnitees")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby, or
(c) any cause of action, suit or claim brought or made against such Indemnitee
and arising out of or resulting from the execution, delivery, performance or
enforcement of the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, other than with respect to Indemnified
Liabilities which directly and primarily result from the gross negligence or
willful misconduct of the Indemnitee. To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company
shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law.

     9.   EVENTS OF DEFAULT.

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

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

                                       16
<PAGE>

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

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

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

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

     (f) any payment default under any contract whatsoever or any acceleration
prior to maturity of any mortgage, indenture, contract or instrument under which
there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company or for money borrowed the
repayment of which is guaranteed by the Company, whether such indebtedness or
guarantee now exists or shall be created hereafter, which, with respect to any
such payment default or acceleration prior to maturity, is in excess of
$1,000,000;

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

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

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

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

                                       17
<PAGE>

     10.  CERTAIN DEFINED TERMS.

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

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

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

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

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

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

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

     (h) "Floor Price" means initially $0.50, which amount may be increased or
decreased from time to time pursuant to Section 1(d)(iii) hereof, except that in
no case shall the Floor Price be less than $0.30 without the prior written
consent of the Buyer. The Floor Price shall be appropriately adjusted for any
reorganization, recapitalization, non-cash dividend, stock split or other
similar transaction.

                                       18
<PAGE>

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

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

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

     (n) "Principal Market" means The Nasdaq OTC/ Bulletin Board market,
provided, however, that in the event the Company's Common Stock is ever listed
or traded on the Nasdaq National Market, Nasdaq SmallCap Market, New York Stock
Exchange or the American Stock Exchange, than the "Principal Market" shall mean
such other market or exchange on which the Company's Common Stock is then listed
or traded.

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

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

     (q) "Purchase Price" means, as of any date of determination the lower of
the (A) the lowest Sale Price of the Common Stock on such date of determination
and (B) the arithmetic average of the three (3) lowest Closing Sale Prices for
the Common Stock during the ten (10) consecutive Trading Days ending on the
Trading Day immediately preceding such date of determination (to be
appropriately adjusted for any reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction).

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

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

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

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

     11.  MISCELLANEOUS.

     (a) Governing Law; Jurisdiction; Jury Trial. The corporate laws of the
State of Colorado shall govern all issues concerning the relative rights of the
Company and its shareholders. All other

                                       19
<PAGE>

questions concerning the construction, validity, enforcement and interpretation
of this Agreement and the other Transaction Documents shall be governed by the
internal laws of the State of Illinois, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Illinois or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Illinois. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of Chicago, for the adjudication of any dispute hereunder or under the
other Transaction Documents or in connection herewith or therewith, or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

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

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

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

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

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

                                       20
<PAGE>

each case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

         If to the Company:
                  Synergy Technologies Corporation
                  1689 Hawthorne Drive
                  Conroe, TX 77301
                  Telephone:        936-788-8220
                  Facsimile:        936-788-8221
                  Attention:        President

         With a copy to:

                  Ruffa & Ruffa
                  150 East 58th Street
                  New York, NY  10155
                  Telephone:        212-355-0606
                  Facsimile:        212-759-7696
                  Attention:        William P. Ruffa, Jr.

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

         If to the Transfer Agent:
                  American Stock Transfer & Trust Company
                  59 Maiden Lane
                  New York, NY  10038
                  Telephone:        718-921-8145
                  Facsimile:        718-921-8116
                  Attention:        Denise Padilla

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

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

                                       21
<PAGE>

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

     (i) Publicity. The Buyer shall have the right to approve before issuance
any press releases or any other public disclosure (including any filings with
the SEC) with respect to the transactions contemplated hereby; provided,
however, that the Company shall be entitled, without the prior approval of the
Buyer, to make any press release or other public disclosure (including any
filings with the SEC) with respect to such transactions as is required by
applicable law and regulations (although the Buyer shall be consulted by the
Company in connection with any such press release or other public disclosure
prior to its release and shall be provided with a copy thereof).

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

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

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

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

          (iii) In the event that the Commencement shall not have occurred on or
     before September 15, 2002, due to the failure to satisfy the conditions set
     forth in Sections 6 and 7 above with respect to the Commencement (and the
     nonbreaching party's failure to waive such unsatisfied condition(s)), the
     nonbreaching party shall have the option to terminate this Agreement at the
     close of business on such date or thereafter without liability of any party
     to any other party.

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

          (v) At any time after the Commencement Date, the Company shall have
     the option to terminate this Agreement for any reason or for no reason by
     delivering notice (a "Company

                                       22
<PAGE>

     Termination Notice") to the Buyer electing to terminate this Agreement
     without any liability or payment to the Buyer. The Company Termination
     Notice shall not be effective until one (1) Trading Day after it has been
     received by the Buyer.

          (vi) This Agreement shall automatically terminate on the date that the
     Company sells and the Buyer purchases Six Million Dollars ($6,000,000) as
     provided herein, without any action or notice on the part of any party.

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

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

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

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

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

                                       23
<PAGE>

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

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

                                    * * * * *

                                       24
<PAGE>

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

                                            THE COMPANY:

                                            SYNERGY TECHNOLOGIES CORPORATION

                                            By: /s/ Barry Coffey
                                                ---------------------------
                                            Name: Barry Coffey
                                            Title:  Chief Executive Officer

                                            BUYER:

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

                                            By: /s/ Steven G. Martin
                                                ----------------------------

                                            Name: Steven G. Martin
                                            Title: President

                                       25

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