ACQUISITION AGREEMENT

                                 BY AND BETWEEN

                            ADVANCED KNOWLEDGE, INC.,
                             A DELAWARE CORPORATION


                                       AND


                               SOCCER MAGIC INC.,
                             AN ONTARIO CORPORATION





                             As of December 14, 1999




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                                TABLE OF CONTENTS


 ARTICLE                                                                    PAGE
 -------                                                                    ----

     ONE   THE ACQUISITION

           1.01  The Acquisition                                               1
           1.02  Possible Automatic Rescission of the Acquisition              1

     TWO   CALCULATION OF EXCHANGE RATIO AND AKI SHARES TO BE ISSUED

           2.01  Calculation of Exchange Ratio                                 2
           2.02  Calculation of AKI Shares to Be Issued                        2

   THREE   CLOSING AND EFFECTIVE TIME OF THE ACQUISITION

           3.01  The Closing                                                   2
           3.02  Escrow Agreement and Possible Automatic Rescission            2
           3.03  The Effective Time                                            4
           3.04  Directors of AKI at the Effective Time                        4
           3.05  Officers of AKI at the Effective Time                         4
           3.06  Remedy for False Representation and Warranty                  4

    FOUR   REPRESENTATIONS AND WARRANTIES OF SMI

           4.01  Organization and Good Standing                                5
           4.02  Due Authorization                                             5
           4.03  Agreement Not in Breach of Other Instruments                  5
           4.04  Absence of Certain Changes                                    5
           4.05  Real Property Leases                                          6
           4.06  Equipment Leases                                              7
           4.07  Trade Names                                                   7
           4.08  Contracts and Commitments                                     7
           4.09  Licenses and Permits                                          8
           4.10  Litigation                                                    8
           4.11  Insurance                                                     8
           4.12  Inventories                                                   8
           4.13  Compliance with Law                                           8
           4.14  Capitalization                                                9
           4.15  Labor and Employment Matters                                  9
           4.16  Taxes                                                        10
           4.17  Environmental Compliance                                     11
           4.18  Subsidiaries and Affiliates                                  11
           4.19  Banking Facilities                                           11
           4.20  No Assets Owned by Affiliates                                11

                                       ii
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           4.21  Indebtedness to and from Officers, Directors and
                 Shareholders                                                 11
           4.22  Related Party Transactions                                   11
           4.23  No Legal Bar                                                 11
           4.24  Finder's Fees and Brokerage Fees                             11
           4.25  Required Consents                                            12
           4.26  Other Information                                            12
           4.27  SMI Unaudited Financial Statements                           12
           4.28  Regulatory Investigations                                    12
           4.29  Corporate Records                                            12
           4.30  Representations                                              12

    FIVE   REPRESENTATIONS OF AKI

           5.01  Organization, Standing and Power                             13
           5.02  Due Authorization                                            13
           5.03  Agreement Not in Breach of Other Agreements                  13
           5.04  Status of Common Stock                                       13
           5.05  No Bankruptcy                                                13
           5.06  Absence of Certain Changes                                   13
           5.07  Contracts and Commitments                                    14
           5.08  Litigation                                                   14
           5.09  Compliance with Law                                          15
           5.10  Capitalization                                               15
           5.11  Taxes                                                        16
           5.12  Environmental Compliance                                     16
           5.13  Subsidiaries and Affiliates                                  16
           5.14  Indebtedness to and from Officers, Directors and
                 Stockholders                                                 16
           5.15  No Legal Bar                                                 16
           5.16  Finder's Fees and Brokerage Fees                             16
           5.17  Other Information                                            17
           5.18  AKI Financial Statements                                     17
           5.19  Qualification to Use Form S-8 for Consultant Shares          17
           5.20  Reporting Company                                            17
           5.21  Securities Filings                                           17
           5.22  OTC Bulletin Board                                           17
           5.23  Stop Trade Orders                                            17
           5.24  Regulatory Investigations                                    17
           5.25  Corporate Records                                            17
           5.26  Representations                                              18
           5.27  Government Approvals                                         18
           5.28  Required Consents                                            18

     SIX   COVENANTS AND AGREEMENTS OF SMI

           6.01  Conduct of Business                                          18
           6.02  Fulfillment of Conditions and Covenants                      19

                                      iii
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           6.03  Status of Assets                                             19
           6.04  Access to Information                                        19
           6.05  Financial Records and Unaudited Financial Statements         19
           6.06  Audited Financial Statements                                 19
           6.07  Consents                                                     20
           6.08  Transfer of Licenses, Permits and Authorizations             20
           6.09  Employees                                                    20
           6.10  Agreement with Respect to Other Regulatory Filings           20
           6.11  Solicitation of Inquiries                                    20
           6.12  Purchase and Sale Agreements                                 20
           6.13  Public Announcements                                         20
           6.14  Resignations of New AKI Directors and Officers               20
           6.15  Appointment of Successor Directors                           21
           6.16  Payment of Legal Fees                                        21
           6.17  Instruction Letter to Transfer Agent                         21
           6.18  Conduct of Business Prior to Close of Escrow                 21
           6.19  Assumption of Liabilities and Obligations                    21

   SEVEN   COVENANTS AND AGREEMENTS OF AKI

           7.01  Fulfillment of Conditions and Covenants                      21
           7.02  Access to Information                                        22
           7.03  Compliance with Applicable Securities Laws                   22
           7.04  Resignations of Existing Directors and Officers              22
           7.05  Appointment of New Directors and Officers                    22
           7.06  Conduct of Business                                          22
           7.07  Financial Records                                            23
           7.08  Agreement with Respect to Other Regulatory Filings           23
           7.09  Solicitation of Inquiries                                    23
           7.10  Public Announcements                                         23
           7.11  Representation Letter                                        23

   EIGHT   CONDITIONS PRECEDENT IN FAVOR OF SMI

           8.01  Accuracy of and Certificate as to Representations
                 and Warranties                                               24
           8.02  Compliance with Covenants                                    24
           8.03  Action/Proceeding                                            24
           8.04  Consents                                                     24
           8.05  Compliance with Law                                          24
           8.06  Opinion of Counsel for AKI                                   24
           8.07  Delivery of Resolutions                                      25
           8.08  Delivery of AKI Shares                                       25
           8.09  Asset Sale Agreement                                         26
           8.10  Purchase and Sale Agreements                                 26
           8.11  Other Information                                            26
           8.12  Adverse Change                                               26

                                       iv
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           8.13  Corporate Authorization                                      26
           8.14  Certificate of Status                                        26
           8.15  Incumbency Certificate                                       26
           8.16  UCC Search Report                                            26
           8.17  Stockholder Notice                                           26
           8.18  Delivery of All Escrow Items                                 26

    NINE   CONDITIONS PRECEDENT IN FAVOR OF AKI

           9.01  Accuracy of and Certificate as to Representations
                 and Warranties                                               27
           9.02  Compliance with Covenants                                    27
           9.03  Action/Proceeding                                            27
           9.04  Consents                                                     27
           9.05  Compliance with Law                                          27
           9.06  Purchase and Sale Agreements                                 27
           9.07  Opinion of Counsel for SMI                                   27
           9.08  Securities Law Compliance                                    28
           9.09  Other Information                                            28
           9.10  Adverse Change                                               29
           9.11  Corporate Authorization                                      29
           9.12  Certificate of Status                                        29
           9.13  Transfer and Delivery of SMI Shares                          29
           9.14  Asset Sale Agreement                                         29
           9.15  Incumbency Certificate                                       29
           9.16  Stockholder Notice                                           29
           9.17  Delivery of All Escrow Items                                 29
           9.18  PPSA Search Report                                           29

     TEN   TERMINATION AND ABANDONMENT OF THE ACQUISITION

           10.01 Termination                                                  30
           10.02 Notice of Termination                                        30
           10.03 Effect of Termination                                        30

  ELEVEN   INDEMNIFICATION

           11.01 Survival of Representations and Warranties                   31
           11.02 Indemnification                                              31
           11.03 Indemnification Notice                                       31
           11.04 Dispute                                                      32

  TWELVE   LITIGATION COSTS

           12.01 Litigation Costs                                             32

THIRTEEN   CERTAIN ADDITIONAL AGREEMENTS OF THE PARTIES

                                       v
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           13.01 Due Diligence Review                                         33
           13.02 Confidentiality                                              33
           13.03 Provincial Takeover Laws                                     33
           13.04 Procedure for Replacement of New AKI Directors               34

FOURTEEN   MISCELLANEOUS

           14.01 Notices                                                      34
           14.02 Assignment                                                   35
           14.03 Expenses                                                     35
           14.04 Governing Law                                                35
           14.05 Dispute                                                      35
           14.06 Entire Understanding                                         35
           14.07 Further Assurances                                           35
           14.08 Waiver                                                       35
           14.09 Headings                                                     36
           14.10 Counterparts                                                 36
           14.11 Severability                                                 36
           14.12 Binding on Successors                                        36

           SIGNATURE PAGE                                                     37

           LIST OF ATTACHED SCHEDULES                                         38

           LIST OF EXHIBITS                                                   39



                                       vi
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                              ACQUISITION AGREEMENT

     ACQUISITION AGREEMENT ("Agreement"),  dated as of December 14, 1999, by and
between  Advanced  Knowledge,  Inc., a Delaware  corporation  ("AKI") and Soccer
Magic Inc., an Ontario corporation ("SMI"), each herein sometimes being referred
to  individually  as a "party" and  collectively  as the "parties," is made with
reference to the following facts:

                                 R E C I T A L S

     A.  AKI  is  a  publicly  held  corporation  engaged  in  the  development,
production and distribution of management and general workforce training videos.

     B. SMI is a privately  held  corporation  which,  through two  wholly-owned
subsidiaries, is engaged in the design, construction, ownership and operation of
indoor soccer facilities (the "Business").

     C. The parties propose, as of the Effective Time (as hereinafter  defined),
that AKI shall acquire ownership of 100% of the outstanding common shares of SMI
(the  "Acquisition"),  as a result of which (a) SMI will  become a  wholly-owned
subsidiary of AKI and (b) the current holders of the  outstanding  common shares
of  SMI  (the  "SMI   Shareholders")  will  receive  as  consideration  for  the
Acquisition shares of AKI common stock as hereinafter set forth.

     D. The parties wish to establish a means for rescinding the  Acquisition if
certain  conditions  are not  satisfied  by the Private  Placement  Deadline (as
hereinafter defined).

     E. The  Acquisition is to be  effectuated  as a non-taxable  reorganization
under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the
"Code").

     NOW,   THEREFORE,   in   consideration  of  the  promises  and  the  mutual
representations,  warranties,  covenants and agreements  herein  contained,  the
parties hereby agree as follows:


                                   ARTICLE ONE

                                 THE ACQUISITION

     1.01 THE ACQUISITION.  On the terms and subject to the conditions set forth
in this Agreement,  AKI shall acquire 100% of the  outstanding  common shares of
SMI (the "SMI Shares") in exchange for a total of 10,000,000 newly issued shares
of AKI common stock (the "AKI Shares") to be issued to the SMI  Shareholders  in
amounts calculated in accordance with Article Two.

     1.02 POSSIBLE  AUTOMATIC  RESCISSION OF THE  ACQUISITION.  The  Acquisition
shall be subject to a possible automatic rescission, as provided in Section 3.02
hereof.

                                       1


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                                   ARTICLE TWO

            CALCULATION OF EXCHANGE RATIO AND AKI SHARES TO BE ISSUED

     2.01  CALCULATION OF EXCHANGE RATIO.  The number of AKI Shares to be issued
to each of the SMI  Shareholders  for  their  respective  SMI  Shares  shall  be
calculated  in accordance  with the formula in Section  2.02,  using an exchange
ratio of 0.8424408206385  (the "Exchange Ratio"). The Exchange Ratio was derived
by  dividing  the total  number of AKI Shares to be issued  (10,000,000)  by the
total number of SMI Shares (11,870,270).

     2.02 CALCULATION OF AKI SHARES TO BE ISSUED. The number of AKI Shares to be
issued to each of the SMI  Shareholders  for their  respective  shares  shall be
calculated  by (i)  multiplying  (a) the total number of SMI Shares held by each
SMI  Shareholder  by (b) the Exchange Ratio and (ii) rounding the product to the
nearest whole number (subject to other reasonable adjustments needed to maintain
the total number of AKI Shares to be issued at 10,000,000). No fractional shares
of AKI common stock shall be issued in connection with the Acquisition.


                                  ARTICLE THREE

                  CLOSING AND EFFECTIVE TIME OF THE ACQUISITION

     3.01 THE CLOSING. The consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place as soon as practicable  after or upon
the satisfaction or waiver in writing of all of the conditions  precedent to the
obligations of the parties  hereto,  on such date as may be designated by mutual
consent of the  parties  (the  "Closing  Date").  The parties  will  conduct the
Closing at the  offices of Miller & Holguin,  1801  Century  Park East,  Seventh
Floor,  Los Angeles,  California  90067,  or such other place as the parties may
mutually agree.  At the Closing,  the parties will determine that each condition
to the  obligations  of the parties  hereunder  has been  satisfied or waived or
will, at such Closing, be satisfied or waived.

     3.02 ESCROW AGREEMENT AND POSSIBLE AUTOMATIC RESCISSION. At or prior to the
Closing,  the  parties  shall  enter  into  an  escrow  agreement  (the  "Escrow
Agreement") in substantially the form attached as Exhibit A, with an independent
third party  acceptable to the parties  serving  under that  agreement as escrow
agent (the "Escrow Agent").

          (a)  ESTABLISHMENT  OF  ESCROW.  Under the  terms of  Section 2 of the
Escrow  Agreement,  the Escrow Agent shall accept delivery at the Closing of the
following  items  (collectively,  the  "Escrowed  Items") and shall hold them in
escrow  until  required  by the terms of  Section 3 of the Escrow  Agreement  to
release and deliver them:

               (i)  The  certificates   representing  the  SMI  Shares  and  the
accompanying stock powers or other documentation  transferring  ownership of the
SMI Shares from the SMI Shareholders to AKI (the "SMI Escrowed Items"), delivery
of which the Escrow  Agent  shall  receive  for  purposes  of the Closing of the
Acquisition as agent for AKI.

                                       2

<PAGE>


               (ii) The  certificates  representing  the AKI  Shares,  issued in
amounts which have been  calculated  in  accordance  with Article Two hereof and
registered in the respective  names of the SMI  Shareholders  (the "AKI Escrowed
Items"),  delivery of which the Escrow  Agent shall  receive for purposes of the
Closing of the Acquisition as agent for SMI.

               (iii) The conditional written resignations of each of the New AKI
Directors, as defined in Section 3.04 hereof (the "New Director  Resignations"),
which shall become  effective only as provided in Section 3(b)(iv) of the Escrow
Agreement.

               (iv) The conditional written  resignations of each of the New AKI
Officers,  as defined in Section 3.05 hereof (the "New  Officer  Resignations"),
which shall become  effective only as provided in Section  3(b)(v) of the Escrow
Agreement.  (v) The resolutions of the New AKI Directors appointing Buddy Young,
L.  Stephen  Albright  and Dennis  Spiegelman  to serve as directors of AKI (the
"Successor Directors"),  and also appointing Buddy Young to serve as chairman of
AKI's board of directors (the "Successor Chairman"), to become effective only as
contemplated  by  Section  3(b)(ii)  of the  Escrow  Agreement  (the  "Successor
Director  Resolutions").  Delivery to the Escrow Agent of the Successor Director
Resolutions shall be deemed to occur immediately after the Effective Time, i.e.,
after the appointment of the New AKI Directors has become effective.

               (vi) The written  acceptances of Buddy Young, L. Stephen Albright
and Dennis  Spiegelman  to serve as the  Successor  Directors,  and the  written
acceptance  of Buddy Young to serve as the Successor  Chairman,  if and when the
Successor  Director  Resolutions  become  effective,  as contemplated by Section
3(b)(ii) of the Escrow Agreement (the "Successor Director Acceptances").

          (b)  DEFINITIONS.  For  purposes  of this  Agreement  and  the  Escrow
Agreement, the terms listed below shall be defined as follows:

               (i) "Private  Placement" shall mean a private  placement of newly
issued  shares of AKI common  stock made by the New AKI  Officers  which  raises
gross proceeds for AKI of at least US$2,700,000.

               (ii) "Private  Placement  Deadline" shall mean 5:00 p.m.  Pacific
Time on June 30, 2000.

          (c)  RELEASE  AND  DELIVERY  FROM  ESCROW.  The Escrow  Agent shall be
required  under the terms of the Escrow  Agreement to release and deliver all of
the Escrowed Items as follows:

               (i) NO RESCISSION. If the Private Placement is completed prior to
the Private  Placement  Deadline  and AKI is then current in making all required
filings with the U.S.  Securities  and Exchange  Commission  (the  "Commission")
under Sections 13(a) and 14 of the Securities  Exchange Act of 1934, as amended,
the president  and secretary of AKI shall jointly  certify such facts in writing
to the Escrow  Agent (the "Joint  Certification"),  whereupon  the Escrow  Agent
shall be required to release all of the  Escrowed  Items and deliver them as set
forth in Section 3(a) of the Escrow Agreement.

                                       3
<PAGE>


               (ii)  RESCISSION.  If the Escrow  Agent does not  receive a Joint
Certification  from the  president  and  secretary  of AKI prior to the  Private
Placement Deadline, then the Acquisition shall be rescinded and the Escrow Agent
shall release all of the Escrowed Items and deliver them as set forth in Section
3(b) of the Escrow Agreement.

     3.03 THE EFFECTIVE TIME. The Acquisition shall become effective when all of
the items  required by this  Agreement  to be delivered at the Closing have been
delivered  (the  "Effective  Time").  For  purposes of this  Agreement,  the SMI
Escrowed Items and the AKI Escrowed Items shall be deemed to have been delivered
at the Closing when  delivered to the Escrow Agent,  as agent for the respective
parties, as contemplated by Section 3.02 hereof.

     3.04  DIRECTORS OF AKI AT THE EFFECTIVE  TIME.  SMI shall have the right to
nominate up to three new persons to serve as  directors  of AKI at and after the
Effective  Time of the  Acquisition.  SMI shall  identify  any such  nominees in
Schedule  3.04.  As provided in Section 7.05 hereof,  the AKI board of directors
shall adopt  resolutions  appointing  such persons (the "New AKI  Directors") as
directors  (the "New Director  Resolutions"),  which by their terms shall become
operative only at the Effective Time of the Acquisition.

     3.05 OFFICERS OF AKI AT THE EFFECTIVE  TIME. SMI shall identify in Schedule
3.05 those persons it desires to nominate for appointment as the new officers of
AKI at and after the Effective Time of the  Acquisition.  As provided in Section
7.05 hereof, the AKI board of directors shall adopt resolutions  appointing such
persons as the new  officers of AKI (the "New AKI  Officers")  (the "New Officer
Resolutions"), which by their terms shall become operative only at the Effective
Time of the Acquisition.

     3.06 REMEDY FOR FALSE REPRESENTATION AND WARRANTY.  If, after the Effective
Time  and  before  the  Private  Placement  Deadline,   SMI  believes  that  the
representation  and warranty made and given by Buddy Young in the Representation
Letter  (defined in Section  7.11) was untrue in any  material  respect when AKI
delivered the  Representation  Letter to SMI at the Closing,  SMI may submit the
issue to arbitration  pursuant to Section 14.05. If the arbitrator finds,  based
on the evidence  presented to it, that such  representation  and warranty in the
Representation  Letter was, in fact,  untrue in any material respect at the time
of the Closing (the "Finding"),  SMI may deliver or cause to be delivered to the
Escrow Agent a certified written report of the arbitrator's  Finding,  whereupon
(i) the Acquisition shall be rescinded and the Escrow Agent shall be required to
release all of the Escrowed  Items and deliver them as set forth in Section 3(b)
of the Escrow Agreement, and (ii) SMI and the SMI Shareholders shall be released
from their obligations  under this Agreement.  The right of rescission set forth
in this Section 3.06 shall be the exclusive legal and equitable remedy available
to SMI and the SMI  Shareholders  with  respect  to the  Representation  Letter;
provided,  however,  that the Representation  Letter and this Section 3.06 shall
not be deemed to  restrict  or qualify  the  availability  of any  remedies  for
breaches of the  representations  and  warranties  made and given by AKI in this
Agreement. The Escrow Agreement shall include all provisions which are necessary
to implement the purposes of this Section 3.06.

                                       4


<PAGE>


                                  ARTICLE FOUR

                      REPRESENTATIONS AND WARRANTIES OF SMI

     SMI represents and warrants to AKI with respect to SMI and its subsidiaries
as follows:

     4.01  ORGANIZATION AND GOOD STANDING.  SMI is a corporation duly organized,
validly  existing and in good standing under the laws of the Province of Ontario
and has all requisite  corporate  power and authority to own or lease its assets
as now owned or leased by it and to otherwise conduct its business.  SMI has two
subsidiaries,  Soccer Magic (London) Inc. and Soccer Magic (Kingston) Inc., each
of  which is  wholly  owned  by SMI and  each of  which  is a  corporation  duly
organized,  validly existing and in good standing under the laws of the Province
of Ontario and has all requisite  corporate  power and authority to own or lease
its assets as now owned or leased by it and to otherwise  conduct its  business.
All corporate proceedings required by law or by the provisions of this Agreement
to be  taken  by SMI on or  before  the  Closing  Date in  connection  with  the
execution  and  delivery  of  this  Agreement  and  the   consummation   of  the
transactions  contemplated  by this  Agreement  have  been  or will be duly  and
validly taken.

     4.02  DUE   AUTHORIZATION.   This   Agreement  and  each  other   agreement
contemplated  hereby to be executed in connection  herewith by SMI have been (or
upon execution will have been) duly executed and delivered by SMI and constitute
(or upon execution will constitute) legal, valid and binding  obligations of SMI
enforceable  in accordance  with their  respective  terms,  except as limited by
bankruptcy,  insolvency,  reorganization  or other laws affecting  generally the
enforcement of creditors' rights.

     4.03  AGREEMENT  NOT IN  BREACH  OF OTHER  INSTRUMENTS.  Except as noted on
Schedule  4.03,  the  execution  and  delivery of this  Agreement by SMI and the
consummation of the transactions contemplated hereby will not result in a breach
of any of the terms  and  provisions  of, or  constitute  a  default  under,  or
conflict with, any material  agreement,  indenture or other  instrument to which
SMI or any  subsidiary  of SMI is a party or by which  they or their  assets are
bound.

     4.04  ABSENCE OF CERTAIN  CHANGES.  Except as set forth in  Schedule  4.04,
since  August 31,  1999 there has not been any  material  adverse  change in the
working capital, financial condition, assets, liabilities, reserves, contractual
allowances,  business  operations  or  prospects of SMI, and neither SMI nor any
subsidiary of SMI has:

          (a) Engaged in any material transaction outside the ordinary course of
business;

          (b) Made any capital expenditures other than in the ordinary course of
business;

          (c) Paid,  loaned or  advanced  (other than the payment of salaries or
reimbursement of expenses in the ordinary course of business) any amounts to, or
sold,  transferred  or leased any  properties  or assets to or entered  into any
other transactions with any of its officers or directors, any of its affiliates,
or any officer or director of its affiliates;

          (d) Made any material change in any method of accounting or accounting
practice;

                                       5
<PAGE>


          (e) Incurred any material  indebtedness or leasehold expense in excess
of $5,000;

          (f) Entered into any  material  guaranties  or  otherwise  incurred or
suffered to exist any material contingent liabilities;

          (g) Paid or declared any dividend or other  distribution in respect of
its capital stock, or set aside any sums for the payment of any such dividend or
other distribution;

          (h) Issued or sold any common shares or other equity security, granted
any stock option or warrant,  or otherwise issued any security  convertible into
capital stock;

          (i) Canceled any indebtedness due it except upon full payment thereof;

          (j) Increased the compensation  payable or to become payable by SMI to
any of its respective  directors,  officers,  employees or agents,  or any bonus
payments or arrangement made to or with any thereof;

          (k)  Agreed,  whether  in  writing  or  otherwise,  to do  any  of the
foregoing;

          (l) Suffered any labor  trouble or any  controversies  with any of its
employees;

          (m) Suffered any damage,  destruction or loss,  whether or not covered
by insurance,  materially adversely affecting the business or properties of SMI;
or

          (n)  Received  notice  that any person or entity  with which SMI has a
significant  business  relationship intends to cancel or terminate such business
relationship.

     4.05 REAL  PROPERTY  LEASES.  SMI has delivered to AKI correct and complete
copies of the real property leases  described on Schedule 4.05 hereto (the "Real
Property Leases"), as amended to date, which constitute all of the real property
leases to which SMI or any  subsidiary  of SMI is a party.  With respect to each
Real Property Lease:

          (a) The lease is legal,  valid,  binding and  enforceable  and in full
force and effect;

          (b) The lease will continue to be legal, valid,  binding,  enforceable
and in full force and effect on identical terms following the Closing;

          (c) No party to the lease is in breach  or  default,  and no event has
occurred  which,  with  notice or lapse of time,  would  constitute  a breach or
default or permit termination, modification or acceleration thereunder;

          (d) no party to the lease has repudiated any provision thereof;

          (e) there are no disputes,  oral agreements or forbearance programs in
effect as to the lease;

                                       6

<PAGE>


          (f) Neither SMI nor any  subsidiary of SMI has assigned,  transferred,
conveyed,  mortgaged,  deeded in trust or encumbered  any interest in the lease;
and

          (g) All facilities  leased  thereunder  have received all approvals of
governmental authorities (including licenses and permits) required in connection
with the operation  thereof and have been operated and  maintained in accordance
with applicable laws, rules and regulations.

     4.06 EQUIPMENT LEASES. SMI has delivered to AKI correct and complete copies
of the  equipment  leases  described  on Schedule  4.06  hereto (the  "Equipment
Leases"),  as amended to date,  which  constitute all of the equipment  property
leases to which SMI or any subsidiary of SMI is a party. Each Equipment Lease is
a valid  and  binding  obligation  of SMI or a  subsidiary  of SMI  and,  to the
knowledge of SMI,  each of the other  parties  thereto;  and to the knowledge of
SMI, no party to any Equipment  Lease is in default with respect to any material
term or condition thereof,  nor has any event occurred which through the passage
of time or the giving of notice, or both, would constitute a default thereunder,
except as it may relate to the assignments pursuant hereto.

     4.07 TRADE NAMES.  Attached  hereto as Schedule  4.07 is a true and correct
description  of all trade names,  trademarks  and service marks ("Trade  Names")
utilized by SMI or its subsidiaries in the conduct of their business.  Except as
indicated in Schedule 4.07 hereto:

          (a) SMI or a subsidiary  of SMI is the legal and  beneficial  owner in
Canada of all right,  title and interest in and to the Trade Names identified in
Schedule  4.07 free and clear of all  liens,  encumbrances,  equities  and other
adverse claims (and any agreement or commitment to grant any of such), and, with
respect  to the  Trade  Names,  no other  person,  corporation  or firm has been
authorized  to make any use  whatsoever  of any of the same.  SMI shall,  at its
cost,  cause all  conditions,  restrictions,  liens or other  matters  listed on
Schedule 4.07 to be fully  satisfied or removed on or prior to the Closing Date,
unless otherwise agreed to in writing by AKI; and

          (b) SMI or a subsidiary  of SMI has the right and authority to use the
Trade  Names in  connection  with the  conduct of their  business  in the manner
presently  conducted,  and such use does not  conflict  with,  infringe  upon or
violate  any trade name,  trademark  or service  mark,  or any  registration  or
pending  application   relating  thereto,  or  involve  the  unlicensed  use  of
confidential information of any other person, firm or corporation.

     4.08 CONTRACTS AND COMMITMENTS.  All references to SMI in this Section 4.08
shall be deemed to refer to both SMI and its subsidiaries.  Attached as Schedule
4.08 is a list of all agreements which materially  affect SMI, to which SMI is a
party or by which SMI or any of its property is bound which exist as of the date
of execution of this Agreement (including,  without limitation, joint venture or
partnership agreements,  personal property leases,  conditional sales contracts,
notes or other evidence of  indebtedness,  or other  contracts,  agreements,  or
commitments)  (collectively,  the "Contracts").  SMI now has, and at the Closing
will have,  valid and enforceable  interests in and to the Contracts.  Except as
set forth in Schedules  4.03 and 4.08, SMI is not in default with respect to any
material  term or condition  of any such  Contract,  nor has any event  occurred
which  through  the  passage  of time or the giving of  notice,  or both,  would
constitute a default thereunder.  SMI has received no notice that any party to a
Contract  intends to cancel or terminate  such Contract or to exercise or not to
exercise any option thereunder.

                                       7
<PAGE>


     4.09 LICENSES AND PERMITS.  Schedule  4.09 lists all licenses  ("Licenses")
and permits  ("Permits") held by SMI and its subsidiaries in connection with the
operation of their  business as currently  conducted or to the occupancy and use
of the premises upon which their  business is  conducted.  No breach of any such
License or Permit currently exists, nor has any event occurred which through the
passage of time or the  giving of notice,  or both,  would  constitute  a breach
thereunder.

     4.10 LITIGATION. All references to SMI in this Section 4.10 shall be deemed
to refer to both SMI and its subsidiaries. Except as listed in Schedule 4.10 and
except for  collection  actions  instituted by SMI involving less than Cdn$5,000
individually:

          (a) there is no  action,  suit or  proceeding  to which SMI is a party
(either as a plaintiff or defendant)  pending  before any court or  governmental
agency, authority or body, or any arbitrator or arbitral body, which, if decided
or  concluded  adversely,  would  have a  materially  adverse  impact  upon  the
operation  by SMI  of  the  Business  or on  SMI's  ability  to  consummate  the
transactions contemplated herein, and SMI has no knowledge that any such action,
suit or proceeding has been threatened against SMI;

          (b) SMI has not been permanently or temporarily enjoined by any order,
judgment or decree of any court or tribunal or any other agency from engaging in
or continuing any conduct or practice in connection with the Business; and

          (c) There is not in existence  on the date hereof any order,  judgment
or decree of any court or other  tribunal or other agency or any  arbitrator  or
arbitral  body,  enjoining or requiring  SMI to take any action of any kind with
respect to the business, properties or assets of the Business.

     4.11 INSURANCE.  All of the properties,  business and operations of SMI and
its subsidiaries are adequately  insured  consistent with businesses of the same
or similar nature,  and all such policies of insurance are described in Schedule
4.11,  which  schedule  reflects the  policies'  numbers,  identity of insurers,
terms,  amounts and  coverage  which exist as of the date of  execution  of this
Agreement. All of such policies have been, are now and will be until the Closing
in full force and effect with no premium arrearages. Copies of all such policies
and any endorsements  thereto have been or will be delivered to AKI prior to the
Closing.

     4.12   INVENTORIES.   All  the  inventory  and  supplies  of  SMI  and  its
subsidiaries  on hand as of the date of execution of this  Agreement are, and as
of the Effective  Time will be, of a quality and quantity  usual in the ordinary
course of the business of SMI.

     4.13 COMPLIANCE WITH LAW. Except as set forth in Schedule 4.13:

                                       8

<PAGE>


          (a) SMI and its subsidiaries  currently have no outstanding  notice or
notification from any court or governmental agency, authority or body that, with
respect to the  operations of the  Business,  it is in violation in any material
respect of or not in  substantial  compliance  with any federal,  provincial  or
local laws, statutes,  ordinances, rules, regulations,  decrees, orders, permits
or other similar items (including, but not limited to, those related to employee
safety,  employment discrimination and environmental protection or conservation)
or that upon the passage of time it will be in violation in any material respect
of any of the foregoing;

          (b) The conduct of the Business  within the five-year  period prior to
the date hereof has not been in violation of any  federal,  provincial  or local
laws, statutes,  ordinances,  rules,  regulations,  decrees,  orders, permits or
other  similar items  (including,  but not limited to, those related to employee
safety,  employment discrimination and environmental protection or conversation)
in force on the date  hereof,  the  enforcement  of which would  materially  and
adversely affect the condition (financial or otherwise),  business or properties
of SMI or its subsidiaries;

          (c) Neither  SMI,  its  subsidiaries,  nor any  shareholder,  officer,
employee or agent of SMI or its subsidiaries has, directly or indirectly, within
the five year period  prior to the date hereof  given or agreed to give any gift
or  similar  benefit  to any  customer,  supplier,  competitor  or  governmental
employee or official  or has  engaged in any other  practice,  which in any such
case would  subject  SMI to any damage or  penalty  in any  civil,  criminal  or
governmental  litigation or proceeding or which would be grounds for termination
or modification of any material  contract,  license or other instrument to which
SMI or any subsidiary of SMI is a party; and

          (d) All  outstanding  securities  issued by SMI  (including all common
stock and  securities  convertible  into or  exercisable  for common stock) were
issued in compliance with all applicable securities laws. All of the outstanding
common shares of SMI are, and any common shares of SMI issuable upon  conversion
or exercise of any other  security,  when issued  pursuant to such conversion or
exercise will be, duly authorized,  validly issued, fully paid and nonassessable
and not subject to preemptive  rights created by statute,  the charter documents
of SMI or any agreement to which SMI is a party or is bound.

     4.14  CAPITALIZATION.  The  authorized  capital stock of SMI consists of an
unlimited number of common shares, of which 11,870,270 shares are outstanding on
the date hereof.  Such issued and outstanding  shares have been duly and validly
authorized  and are fully paid and  nonassessable.  There are no other shares of
capital stock of SMI outstanding, authorized or reserved for issuance; there are
no  outstanding  options,  warrants,  or  rights  to  purchase  or  acquire,  or
securities  convertible into or exchangeable for, any shares of capital stock of
SMI,  and  there  are no  contracts,  commitments,  agreements,  understandings,
arrangements  or  restrictions  which require SMI to issue,  sell or deliver any
shares of  capital  stock of SMI.  Attached  as  Schedule  4.14 is a list of the
shareholders  of SMI as of the date hereof,  indicating the number of SMI common
shares owned by them beneficially and of record.

     4.15 LABOR AND  EMPLOYMENT  MATTERS.  All references to SMI in this Section
4.15 shall be deemed to refer to both SMI and its subsidiaries.

                                       9

<PAGE>


          (a)  GENERAL.  Except  as set  forth  in  Schedule  4.15,  there is no
collective bargaining  agreement,  service or employment contract or other labor
or  employment  agreement  or  scheme to which SMI is a party or by which SMI is
bound; no profit sharing,  deferred  compensation,  bonus,  stock option,  stock
purchase, pension, retainer, consulting,  retirement, welfare or incentive plan,
contract,  arrangement  or  scheme  to which  SMI is a party or by which  SMI is
bound; and no plan, contract,  arrangement or scheme under which fringe benefits
(including,  but not limited to, vacation plans or programs, sick leave plans or
programs and related  benefits) are afforded to employees of SMI.  Except as set
forth in Schedule 4.15, all accrued material obligations of SMI (whether arising
by  operation  of law,  contract or past custom) for payments by SMI pursuant to
any plan,  contract,  arrangement  or scheme  listed in Schedule  4.15 have been
paid.

          (b)  PERFORMANCE.  Except as set forth in Schedule  4.15,  neither SMI
nor, to the best  knowledge  of SMI, any other party to any  agreement,  plan or
contract set forth in Schedule  4.15, is in default with respect to any material
term or condition thereof,  nor has any event occurred which through the passage
of time or the giving of notice, or both, would constitute a default thereunder.
SMI has  withheld and paid to the  appropriate  governmental  authorities  or is
withholding for payment not yet due to such authorities, all amounts required to
be  withheld  from  employees  of SMI,  and SMI is not liable for any arrears of
wages,  taxes,  penalties  or other sums for  failure to comply  with any of the
foregoing.

          (c) LABOR DISPUTES.  Except as set forth in Schedule 4.15, there is no
pending unfair labor practice  complaint (or the equivalent)  against SMI before
any federal, provincial, local or foreign agency; pending labor strike affecting
SMI;  grievance or unfair  dismissal  proceeding  pending  against SMI;  pending
representation  question  respecting the employees of SMI;  pending  arbitration
proceeding arising out of or under any collective  bargaining agreement to which
SMI is a party;  or any basis for which a material claim may be made against SMI
under any service or employment  contract,  collective  bargaining  agreement or
other labor scheme to which SMI is a party or by which it is bound.

          (d) GOVERNMENTAL BENEFIT OBLIGATIONS.  Except as set forth in Schedule
4.15, all accrued  material  obligations of SMI (whether arising by operation of
law, by contract or past custom) for payments by SMI to trusts or other funds or
to any governmental agency, with respect to unemployment  compensation benefits,
social  security or similar  benefits,  health or welfare  benefits or any other
governmental  benefits for  employees of SMI with respect to  employment of said
employees have been paid.

     4.16  TAXES.  All taxes and other  governmental  charges  in respect of the
properties,  income,  sales and payrolls of SMI and its  subsidiaries  have been
duly paid or reserved. There are no pending questions with governmental agencies
relating  to,  or  claims  or  assessments  for,  taxes  payable  by  SMI or its
subsidiaries,  and SMI and its  subsidiaries  have not given,  and have not been
requested to give,  any waivers  extending  the  statutory  period of limitation
applicable  to any income tax return  for any  period;  and proper and  accurate
amounts have been withheld by SMI and its subsidiaries  from their employees for
all periods in full and complete compliance with the tax withholding  provisions
of all applicable laws.

                                       10

<PAGE>


     4.17 ENVIRONMENTAL  COMPLIANCE.  All references to SMI in this Section 4.17
shall be deemed to refer to both SMI and its  subsidiaries.  There  have been no
uses, disposals,  burials or releases of Hazardous Materials (as defined) on any
premises  used in the Business,  either before or after SMI's  occupancy of such
premises, except in substantial compliance with applicable laws. For purposes of
this Section 4.17,  the term  "Hazardous  Materials"  shall mean any  substances
defined as or included in the definition of "hazardous  substances,"  "hazardous
wastes,"  "hazardous  materials," "toxic substances" and similar terms under any
applicable federal,  provincial or local laws or regulations.  The operations of
SMI at SMI's  premises  have been in  material  compliance  with all  applicable
federal,  provincial  or local  environmental  laws or  regulations.  SMI  shall
indemnify and hold harmless AKI and its  successors and assigns from and against
any and all claims, demands, damages, actions, penalties, liabilities, causes of
action and government proceedings of any kind or nature whatsoever,  arising out
of or in any manner directly or indirectly  connected with the presence prior to
Closing of  Hazardous  Materials  at such  premises  or the  violation  prior to
Closing of any applicable  federal,  provincial or local  environmental  laws or
regulations  at such  premises,  including,  but not  limited  to, any claims of
indemnification or contribution  under any federal,  provincial or local laws or
regulations.

     4.18  SUBSIDIARIES  AND AFFILIATES.  Except for the two subsidiaries of SMI
named in Section  4.01 and except as set forth in  Schedule  4.18,  SMI does not
have,  directly  or  indirectly,   an  equity  investment  in  any  corporation,
partnership,  joint venture or other business entity which investment represents
or upon  conversion  would  represent  more than ten percent (10%) of the voting
power or interest in the profits of such entity.

     4.19 BANKING  FACILITIES.  Attached  hereto as Schedule  4.19 is a true and
complete list of each bank, savings and loan or similar financial institution in
which SMI has an account or with which SMI has a credit facility.

     4.20 NO ASSETS OWNED BY AFFILIATES.  There are no  properties,  tangible or
intangible,  owned by the  shareholders  of SMI,  or owned by any  affiliate  or
relative  of such  shareholders,  which have been used in the normal  day-to-day
operations of the Business any time since November 1, 1998.

     4.21 INDEBTEDNESS TO AND FROM OFFICERS, DIRECTORS AND SHAREHOLDERS.  Except
as set forth in Schedule 4.21, SMI is not indebted to any officer,  director, or
shareholder of SMI in any amount  whatsoever other than for salaries or services
rendered  since the  start of SMI's  current  pay  period  and for  reimbursable
business expenses, nor is any such officer,  director or shareholder indebted to
SMI  except  for  advances  made in the  ordinary  course  of  business  to meet
anticipated reimbursable business expenses to be incurred by such obligor.

     4.22 RELATED PARTY TRANSACTIONS. All references to SMI in this Section 4.22
shall be deemed to refer to both SMI and its  subsidiaries.  Except as set forth
in Schedules 4.21 and 4.22, no officer, director, or shareholder of SMI, nor any
affiliate or relative of any such  person,  now has or within the last three (3)
years has had,  either  directly  or  indirectly,  a  material  interest  in any
contract, agreement or commitment to which SMI is or was a party, or under which
SMI is or was obligated or bound, or to which any of SMI's  properties may be or
may have been subject, other than any contract,  agreement or commitment between
SMI and such persons in their capacities as employees,  officers or directors of
SMI.

     4.23 NO LEGAL BAR. SMI is not prohibited by any order, writ,  injunction or
decree of any body of competent  jurisdiction from consummating the transactions
contemplated  by this  Agreement,  and no such action or  proceeding  is pending
against  SMI  which  questions  the  validity  of this  Agreement  or any of the
transactions contemplated hereby.

     4.24  FINDER'S  FEES AND  BROKERAGE  FEES.  Except as set forth in Schedule
4.24,  SMI has not had any  dealings  with any person  which would  entitle such
person to any finder's fee or brokerage  fees in connection  with this Agreement
or any transaction contemplated hereby.

                                       11

<PAGE>


     4.25  REQUIRED  CONSENTS.  Except as set forth in Schedule 4.25 hereto (the
"Required  Consents"),  no consent,  waiver or other  authorization of any third
party (including,  without limitation, any third party to a Real Property Lease,
Equipment Lease, Contract,  License,  Permit or other instrument to which SMI or
any  subsidiary  of SMI is a party or by which SMI or any  subsidiary  of SMI is
bound) is required to the consummation of the transactions  contemplated by this
Agreement.

     4.26 OTHER  INFORMATION.  SMI has disclosed or will,  prior to the Closing,
disclose  to AKI all  information  requested  by AKI  and  known  to SMI  (after
reasonable investigation and inquiry) to be material to the condition (financial
or  otherwise),  business  or  properties  of  SMI  and  its  subsidiaries.  The
information concerning SMI and its subsidiaries set forth in this Agreement,  in
the schedules hereto  furnished by SMI, and in any other document,  statement or
certificate  furnished or to be furnished to AKI pursuant  hereto,  does not and
will not  contain  any untrue  statement  of a material  fact or omit to state a
material  fact  required to be stated herein or therein or necessary to make the
statements and facts contained herein or therein,  in light of the circumstances
in which they are made, not false or misleading.  All  information  contained or
referred to in the schedules hereto furnished by SMI is accurate in all material
respects  and SMI (after  having  made  reasonable  inquiry) is not aware of any
other fact or matter which renders any such information  materially  misleading.
Copies of all documents  heretofore or hereafter  delivered or made available to
AKI were or will be complete and accurate  copies of such  documents on the date
such copies are delivered.

     4.27 SMI  UNAUDITED  FINANCIAL  STATEMENTS.  SMI has  delivered  to AKI its
unaudited  consolidated financial statements for the year ended October 31, 1998
and the ten months ended August 31, 1999, and such financial statements are true
and correct and fully represent the financial condition of SMI at such dates and
the  results of  operations,  shareholders  equity and cash flows of SMI for the
periods  covered.  SMI has  also  delivered  to AKI its  unaudited  consolidated
financial  statements  for the nine months ended  October 31, 1997 and the three
months  ended  January 31,  1998,  and such  financial  statements  are true and
correct and fully represent the financial condition of SMI at such dates and the
results of operations, shareholders equity and cash flows of SMI for the periods
covered,  and comply with  Canadian  generally  accepted  accounting  principles
consistently applied throughout the periods covered.

     4.28  REGULATORY   INVESTIGATIONS.   To  SMI's  knowledge,   there  are  no
investigations  or inquiries pending against SMI or its directors or officers by
any stock exchange,  securities  regulatory  authority,  taxing authority or any
other governmental department or agency.

     4.29 CORPORATE RECORDS. All of the minute books and corporate and financial
records of SMI are, or prior to the Closing will be, in all  material  respects,
complete, up to date and accurate.

     4.30  REPRESENTATIONS.  All representations and warranties of SMI are true,
accurate and complete in all material respects as of the date hereof and will be
true,  accurate and  complete as of the Closing as if made at such time,  except
with respect to the effect of  transactions  in the ordinary  course of business
and transactions contemplated or permitted by this Agreement. Any exception to a
representation  or warranty of SMI which is  disclosed  in any of the  schedules
hereto furnished by SMI shall be deemed to apply only to the  representation  or
warranty   referenced  by  such  schedule,   and  shall  not,  unless  scheduled
separately,  be considered an exception to any other  representation or warranty
of SMI in this Agreement.

                                       12

<PAGE>


                                  ARTICLE FIVE

                             REPRESENTATIONS OF AKI

     AKI represents and warrants to SMI as follows:

     5.01 ORGANIZATION, STANDING AND POWER. AKI is a corporation duly organized,
validly  existing and in good  standing  under the laws of the State of Delaware
and has all requisite  corporate  power and authority to own or lease its assets
as now  owned  or  leased  by it and to  otherwise  conduct  its  business.  All
corporate  proceedings required by law or by the provisions of this Agreement to
be taken by AKI on or before the Closing Date in  connection  with the execution
and  delivery  of  this  Agreement  and  the  consummation  of the  transactions
contemplated by this Agreement have been or will be duly and validly taken.

     5.02  DUE   AUTHORIZATION.   This   Agreement  and  each  other   agreement
contemplated  hereby to be executed in  connection  herewith by AKI or have been
(or upon  execution  will have  been) duly  executed  and  delivered  by AKI and
constitute  (or  upon  execution  will  constitute)  legal,  valid  and  binding
obligations of AKI enforceable in accordance with their respective terms, except
as limited by  bankruptcy,  insolvency,  reorganization  or other laws affecting
generally the enforcement of creditors' rights.

     5.03  AGREEMENT  NOT IN  BREACH OF OTHER  INSTRUMENTS.  The  execution  and
delivery  of this  Agreement  by AKI and the  consummation  of the  transactions
contemplated  hereby  will  not  result  in a  breach  of any of the  terms  and
provisions  of, or constitute a default  under,  or conflict  with, any material
agreement,  indenture or other instrument to which AKI is a party or by which it
or its properties are bound.

     5.04  STATUS  OF  COMMON  STOCK.  Upon  consummation  of  the  transactions
contemplated  by  this  Agreement,  the  AKI  Shares  to be  issued  to the  SMI
Shareholders,  when  issued  and  delivered,  will be duly  authorized,  validly
issued,  fully paid and non-assessable and free of any and all liens,  claims or
encumbrances, but subject to the terms of the Escrow Agreement.

     5.05 NO  BANKRUPTCY.  Neither  AKI nor its  assets  are the  subject of any
proceeding involving either a voluntary or an involuntary bankruptcy, insolvency
or receivership.

     5.06 ABSENCE OF CERTAIN CHANGES.  Since August 31, 1999, there has not been
any material adverse change in the financial condition, assets or liabilities of
AKI, and AKI has not:

          (a) Engaged in any material transaction outside the ordinary course of
business;

          (b) Made any capital expenditures other than in the ordinary course of
business;

          (c) Paid,  loaned or  advanced  (other than the payment of salaries or
reimbursement of expenses in the ordinary course of business) any amounts to, or
sold,  transferred  or leased any  properties  or assets to or entered  into any
other transactions with any of its officers or directors, any of its affiliates,
or any officer or director of its affiliates;

                                       13

<PAGE>


          (d) Made any material change in any method of accounting or accounting
practice;

          (e) Incurred any material  indebtedness or leasehold expense in excess
of $5,000;

          (f) Entered into any  material  guaranties  or  otherwise  incurred or
suffered to exist any material contingent liabilities;

          (g) Paid or declared any dividend or other  distribution in respect of
its capital stock, or set aside any sums for the payment of any such dividend or
other distribution;

          (h)  Issued or sold any  shares of  common  stock or any other  equity
security,  granted any stock option or warrant, or otherwise issued any security
convertible  into capital stock,  except that AKI has agreed to issue a total of
2,000,000  shares of common stock pursuant to individual  consulting  agreements
with  Louis  Shefsky,  Pascale  Cassidy,  Sam  Lighter  and Howard  Borden  (the
"Consulting Agreements");

          (i)  Agreed,  whether  in  writing  or  otherwise,  to do  any  of the
foregoing;

          (j) Suffered any labor  trouble or any  controversies  with any of its
employees; or

          (k) Suffered any damage,  destruction or loss,  whether or not covered
by insurance, materially adversely affecting the business or properties of AKI.

     5.07 CONTRACTS AND COMMITMENTS. All agreements which materially affect AKI,
to which AKI is a party or by which AKI or any of its  property  is bound  which
exist as of the date of execution of this  Agreement have been filed as exhibits
to documents filed by AKI with the Commission under the Securities  Exchange Act
of 1934 (collectively,  the "Contracts").  AKI is not in default with respect to
any material term or condition of any such Contract,  nor has any event occurred
which  through  the  passage  of time or the giving of  notice,  or both,  would
constitute a default thereunder.

     5.08 LITIGATION.

          (a) There is no  action,  suit or  proceeding  to which AKI is a party
(either as a plaintiff or defendant)  pending  before any court or  governmental
agency, authority or body, or any arbitrator or arbitral body, which, if decided
or  concluded  adversely,  would  have a  materially  adverse  impact  upon  the
operation  by AKI  of  its  business  or on  AKI's  ability  to  consummate  the
transactions contemplated herein, and AKI has no knowledge that any such action,
suit or proceeding has been threatened against AKI;

          (b) AKI has not been permanently or temporarily enjoined by any order,
judgment or decree of any court or tribunal or any other agency from engaging in
or continuing any conduct or practice in connection with its business; and

          (c) There is not in existence  on the date hereof any order,  judgment
or decree of any court or other  tribunal or other agency or any  arbitrator  or
arbitral  body,  enjoining or requiring  AKI to take any action of any kind with
respect to its business, properties or assets.

                                       14

<PAGE>


     5.09 COMPLIANCE WITH LAW.

          (a) AKI currently has no outstanding  notice or notification  from any
court or  governmental  agency,  authority  or body  that,  with  respect to the
operations of AKI's business,  it is in violation in any material  respect of or
not in substantial  compliance with any federal,  state or local laws, statutes,
ordinances, rules, regulations,  decrees, orders, permits or other similar items
(including,  but not limited to, those  related to employee  safety,  employment
discrimination  and  environmental  protection or conservation) or that upon the
passage of time it will be in violation  in any  material  respect of any of the
foregoing;

          (b) The conduct of AKI's business within the five-year period prior to
the date hereof has not been in violation  of any federal,  state or local laws,
statutes,  ordinances,  rules,  regulations,  decrees,  orders, permits or other
similar items (including,  but not limited to, those related to employee safety,
employment discrimination and environmental protection or conversation) in force
on the date hereof,  the  enforcement  of which would  materially  and adversely
affect the condition (financial or otherwise), business or properties of AKI;

          (c) Neither AKI nor any shareholder, officer, employee or agent of AKI
has,  directly  or  indirectly,  within the five year  period  prior to the date
hereof  given or agreed to give any gift or  similar  benefit  to any  customer,
supplier,  competitor or governmental employee or official or has engaged in any
other  practice,  which in any such  case  would  subject  AKI to any  damage or
penalty in any civil, criminal or governmental litigation or proceeding or which
would be grounds for  termination  or  modification  of any  material  contract,
license or other instrument to which AKI is a party; and

          (d) All  outstanding  securities  issued by AKI  (including all common
stock and  securities  convertible  into or  exercisable  for common stock) were
issued in compliance with all applicable securities laws. All of the outstanding
shares of AKI common stock are, and any shares of AKI common stock issuable upon
conversion  or exercise  of any other  security,  when  issued  pursuant to such
conversion or exercise will be, duly authorized,  validly issued, fully paid and
nonassessable  and not subject to  preemptive  rights  created by  statute,  the
charter documents of AKI or any agreement to which AKI is a party or is bound.

     5.10  CAPITALIZATION.  The  authorized  capital  stock of AKI  consists  of
25,000,000  shares of common stock, of which 4,000,000 shares are outstanding on
the date hereof.  Such issued and outstanding  shares have been duly and validly
authorized and are fully paid and nonassessable.  Other than 2,000,000 shares of
common  stock  which are  reserved  for  issuance  by AKI  under the  Consulting
Agreements,  there are no other  shares  of  capital  stock of AKI  outstanding,
authorized or reserved for issuance, there are no outstanding options, warrants,
or rights to purchase or acquire, or securities convertible into or exchangeable
for,  any  shares  of  capital  stock  of  AKI,  and  there  are  no  contracts,
commitments,  agreements,  understandings,  arrangements or  restrictions  which
require  AKI to issue,  sell or  deliver  any  shares of  capital  stock of AKI.
Attached as Schedule 5.10 is a list of the  stockholders  of AKI  indicating the
number of AKI common shares owned of record by them as of a recent date.

                                       15

<PAGE>


     5.11 TAXES.  All tax returns  required to be filed with respect to AKI have
been duly filed and all taxes and other  governmental  charges as  reflected  on
such tax  returns as being due and owing in respect of the  properties,  income,
sales and  payrolls of AKI have been duly paid.  There are no pending  questions
with  governmental  agencies  relating to, or claims or  assessments  for, taxes
payable by AKI, and AKI has not given,  and has not been  requested to give, any
waivers  extending the statutory  period of limitation  applicable to any income
tax return for any period; and proper and accurate amounts have been withheld by
AKI from its employees for all periods in full and complete  compliance with the
tax withholding provisions of all applicable laws.

     5.12 ENVIRONMENTAL COMPLIANCE.  There have been no uses, disposals, burials
or releases of Hazardous  Materials  (as defined) on any premises  used in AKI's
business,  either before or after AKI's  occupancy of such  premises,  except in
substantial  compliance with applicable laws. For purposes of this Section 5.12,
the term "Hazardous  Materials" shall mean any substances defined as or included
in the  definition of "hazardous  substances,"  "hazardous  wastes,"  "hazardous
materials," "toxic  substances" and similar terms under any applicable  federal,
state or local laws or regulations. The operations of AKI at AKI's premises have
been in  material  compliance  with  all  applicable  federal,  state  or  local
environmental laws or regulations. AKI shall indemnify and hold harmless SMI and
its  successors  and  assigns  from and  against  any and all  claims,  demands,
damages,  actions,  penalties,  liabilities,  causes  of action  and  government
proceedings  of any kind or nature  whatsoever,  arising out of or in any manner
directly or indirectly connected with the presence prior to Closing of Hazardous
Materials at such premises or the violation  prior to Closing of any  applicable
federal,  state or local  environmental  laws or  regulations  at such premises,
including,  but not limited to, any claims of  indemnification  or  contribution
under any federal, state or local laws or regulations.

     5.13  SUBSIDIARIES  AND  AFFILIATES.  AKI has no direct or indirect  equity
investment in any  corporation,  partnership,  joint  venture or other  business
entity.

     5.14 INDEBTEDNESS TO AND FROM OFFICERS, DIRECTORS AND STOCKHOLDERS.  Except
as  described  in AKI's  annual  report on Form 10-KSB for the fiscal year ended
August 31, 1999 (the "AKI Annual Report") and Schedule 5.14, AKI is not indebted
to any officer,  director,  or stockholder of AKI in any amount whatsoever other
than for  salaries or  services  rendered  since the start of AKI's  current pay
period and for reimbursable business expenses, nor is any such officer, director
or stockholder  indebted to AKI except for advances made in the ordinary  course
of business to meet anticipated reimbursable business expenses to be incurred by
such obligor.

     5.15 NO LEGAL BAR. AKI is not prohibited by any order, writ,  injunction or
decree of any body of competent  jurisdiction from consummating the transactions
contemplated  by this  Agreement,  and no such action or  proceeding  is pending
against  AKI  which  questions  the  validity  of this  Agreement  or any of the
transactions contemplated hereby.

     5.16 FINDER'S FEES AND  BROKERAGE  FEES.  AKI has not had any dealings with
any person which would entitle such person to any finder's fee or brokerage fees
in connection with this Agreement or any transaction contemplated hereby.

                                       16

<PAGE>


     5.17 OTHER  INFORMATION.  AKI has disclosed or will,  prior to the Closing,
disclose  to SMI all  information  requested  by SMI  and  known  to AKI  (after
reasonable investigation and inquiry) to be material to the condition (financial
or otherwise), business or properties of AKI. The information concerning AKI set
forth  in this  Agreement,  in the AKI  Annual  Report  (including  the  audited
financial statements contained therein (the "AKI Financial Statements")), in any
schedules  hereto  furnished  by AKI,  and in any other  document,  statement or
certificate  furnished or to be furnished to AKI pursuant  hereto,  does not and
will not  contain  any untrue  statement  of a material  fact or omit to state a
material  fact  required to be stated herein or therein or necessary to make the
statements and facts contained herein or therein,  in light of the circumstances
in which they are made, not false or misleading.  All  information  contained or
referred to in the schedules hereto furnished by AKI is accurate in all material
respects  and AKI (after  having  made  reasonable  inquiry) is not aware of any
other fact or matter which renders any such information  materially  misleading.
Copies of all documents  heretofore or hereafter  delivered or made available to
AMI were or will be complete and accurate  copies of such  documents on the date
such copies are delivered.

     5.18 AKI FINANCIAL STATEMENTS. The AKI Financial Statements fully represent
the financial condition of AKI at August 31, 1999 and the results of operations,
shareholders  equity  and cash  flows of AKI for the  periods  covered.  The AKI
Financial  Statements  comply  with  generally  accepted  accounting  principles
consistently applied throughout the periods covered.

     5.19  QUALIFICATION TO USE FORM S-8 FOR CONSULTANT SHARES. AKI qualifies to
use Form S-8 to register under the  Securities Act of 1933 the 2,000,000  shares
of AKI common  stock which AKI has agreed to issue  pursuant  to the  Consulting
Agreements (the "Consultant  Shares").  The Consultant Shares, when issued under
an  effective  Form S-8  registration  statement  after  delivery  by AKI of the
required  Form S-8  prospectus,  will be  unrestricted  securities,  will not be
required to bear a legend under  applicable  securities laws, and will have been
validly issued as fully paid and non-assessable shares of AKI.

     5.20 REPORTING COMPANY. AKI is a reporting company registered under Section
12(g) of the Securities Exchange Act of 1934 and is in compliance with all laws,
rules and regulations applicable to reporting companies generally.

     5.21  SECURITIES  FILINGS.  AKI is current  with  respect  to all  required
filings  with  state  and  federal  securities  regulatory  authorities  and the
contents of all such filings are complete and accurate in all material respects.

     5.22 OTC  BULLETIN  BOARD.  AKI's common stock is posted for trading on the
OTC Bulletin Board under the symbol "AVKN."

     5.23 STOP TRADE  ORDERS.  There are no  pending,  and there have never been
any, stop trade orders issued against AKI or any of its directors or officers or
those of any affiliates of AKI by any securities regulatory authority whether in
the United States or in any other jurisdiction.

     5.24  REGULATORY   INVESTIGATIONS.   To  AKI's  knowledge,   there  are  no
investigations  or inquiries pending against AKI or its directors or officers by
any stock exchange,  securities  regulatory  authority,  taxing authority or any
other governmental department or agency.

     5.25 CORPORATE RECORDS. All of the minute books and corporate and financial
records of AKI are, or prior to the Closing will be, in all  material  respects,
complete, up to date and accurate.

                                       17

<PAGE>


     5.26  REPRESENTATIONS.  All representations and warranties of AKI are true,
accurate and complete in all material respects as of the date hereof and will be
true,  accurate and  complete as of the Closing as if made at such time,  except
with respect to the effect of  transactions  in the ordinary  course of business
and transactions contemplated or permitted by this Agreement. Any exception to a
representation  or warranty of AKI which is  disclosed  in any of the  schedules
hereto furnished by AKI shall be deemed to apply only to the  representation  or
warranty   referenced  by  such  schedule,   and  shall  not,  unless  scheduled
separately,  be considered an exception to any other  representation or warranty
of AKI in this Agreement.

     5.27  GOVERNMENT  APPROVALS.  Other  than (i) the  pre-Closing  filing  and
delivery to stockholders of the Stockholder Notice described in Section 8.17 and
(ii) the post-Closing filing of securities  exemption notice filings required in
the State of California and the Province of Ontario,  no  governmental  notices,
filings,  approvals  or consents  are  required in order for AKI to complete the
transactions contemplated by this Agreement.

     5.28 REQUIRED CONSENTS.  No consent,  waiver or other  authorization of any
third party (including,  without limitation,  any third party to a real property
lease, equipment lease, contract,  license,  permit or other instrument to which
AKI is a party or by which AKI is bound) is required to the  consummation of the
transactions contemplated by this Agreement.


                                   ARTICLE SIX

                         COVENANTS AND AGREEMENTS OF SMI

     All  references to SMI in this Article shall be deemed to refer to both SMI
and its subsidiaries,  except where the context requires  otherwise.  SMI hereby
covenants and agrees, between the date hereof and the Closing (and, with respect
to Sections  6.06,  6.10,  and 6.15 through 6.19,  also after the  Closing),  as
follows:

     6.01 CONDUCT OF BUSINESS.  SMI shall conduct the operations of its Business
only in the ordinary  course and in a manner  consistent  with a maximization of
the value of the  Business.  SMI shall use  reasonable  efforts to preserve  the
goodwill of its customers and others with whom it has business relations. Except
as otherwise  contemplated  by this Agreement or consented to by AKI in writing,
between the date of this Agreement and the Closing, SMI shall not:

          (a) Engage in any material  transaction outside the ordinary course of
business;

          (b) Make any capital expenditures other than in the ordinary course of
business;

          (c) Enter into any material guaranties or otherwise incur or suffer to
exist any material contingent liabilities;

          (d)  Enter  into  any  material  new   indebtedness,   or  cancel  any
indebtedness due it except upon full payment thereof;

                                       18

<PAGE>


          (e) Make any payment of dividends  or other  unusual  distribution  of
cash or assets to shareholders or employees,  including repayment of outstanding
indebtedness;

          (f) Make any material change in any method of accounting or accounting
practice;

          (g)  Enter  into  or  engage  in any  transaction  with  any  officer,
director, shareholder or affiliate, except for the payment of salaries and other
activities in the ordinary course of business;

          (h) Fail to pay when due, or fail to maintain a reserve  adequate  for
the payment when due of, any applicable local, provincial or federal taxes;

          (i) Issue or sell any common  shares or other equity  security,  grant
any stock option or warrant,  or otherwise issue any security  convertible  into
capital stock;

          (j) Take any other  action which would  render any  representation  or
warranty of SMI herein inaccurate as of the date such action is taken; or

          (k)  Agree,  whether  in  writing  or  otherwise,  to do  any  of  the
foregoing.

     6.02  FULFILLMENT OF CONDITIONS AND  COVENANTS.  SMI shall not  voluntarily
undertake  any  course  of  action  inconsistent  with the  satisfaction  of the
requirements  or conditions  applicable to it as set forth in this Agreement and
shall  promptly  do all acts and take all such  steps as it deems  necessary  or
appropriate to enable it to perform as early as possible the obligations  herein
provided.

     6.03 STATUS OF ASSETS.  SMI's title to its assets shall be  maintained  and
preserved at all times from the date hereof until  completion  of the Closing in
material  accordance with the representations and warranties of SMI set forth in
Article Four hereof.

     6.04 ACCESS TO  INFORMATION.  Upon  reasonable  notice from AKI,  SMI shall
deliver to the  representatives  of AKI,  or grant such  representatives  access
during normal business hours to, the books,  records and financial statements of
SMI to make such reviews,  examinations and investigations  thereof as AKI deems
necessary.

     6.05  FINANCIAL  RECORDS  AND  UNAUDITED  FINANCIAL  STATEMENTS.  SMI shall
accurately  maintain its books and records and promptly advise AKI in writing of
any material adverse change in the condition  (financial or otherwise),  assets,
liabilities, earnings or Business of SMI.

     6.06 AUDITED  FINANCIAL  STATEMENTS.  SMI agrees that it shall use its best
efforts to complete,  at its own cost, as soon as practicable following the date
of this  Agreement,  an audit of the financial  statements of SMI in conformance
with the requirements of Form 8-K (items 2 and 7) and other applicable rules and
regulations of the  Commission.  Such audit shall, in any event, be completed in
time for AKI to timely file the audited  financial  statements of SMI,  together
with all required pro forma  financial  statements,  with the Commission on Form
8-K, i.e., within 75 days after the Effective Time.

                                       19

<PAGE>


     6.07 CONSENTS.  Between the date hereof and the Closing,  SMI shall, at its
cost,  obtain from third  parties any  Required  Consents in writing;  provided,
however,  that the terms  and  conditions  of any  agreements  as to which  such
consents are obtained shall not be less favorable following the Acquisition than
those terms and conditions to which SMI is currently subject.

     6.08  TRANSFER OF LICENSES,  PERMITS AND  AUTHORIZATIONS.  Between the date
hereof and the Closing, SMI shall, if required by applicable law or regulations,
at its cost,  obtain new Licenses and Permits or transfers of existing  Licenses
and Permits and any  governmental or other consents or  authorizations  required
for the  consummation  of the  Acquisition  and the  conduct  of SMI's  Business
following the Closing; provided,  however, that the terms and conditions of such
new or  transferred  Licenses and Permits shall not be less favorable than those
terms and conditions to which SMI is currently subject.

     6.09 EMPLOYEES.  Between the date hereof and the Closing, SMI shall use its
best  efforts to ensure  that all of the key  employees  of SMI shall  remain as
employees of SMI (subject to Section 14.05 below).

     6.10 AGREEMENT WITH RESPECT TO OTHER REGULATORY FILINGS. SMI agrees that it
shall  cooperate  with AKI in the  preparation of any document or other material
which may be required by any governmental  agency as a predicate to or result of
the transactions herein contemplated.

     6.11  SOLICITATION  OF  INQUIRIES.  From the date  hereof to the earlier to
occur of (i) the Closing or (ii) the  termination of this Agreement  pursuant to
Article Ten hereof  (which  period  shall be referred to herein as the  "No-Shop
Period"),  neither SMI nor its directors,  employees,  agents or representatives
shall,  without the prior written consent of AKI, solicit from any other person,
firm or corporation any inquiry or proposal relating to a merger, consolidation,
amalgamation,  purchase  or sale of assets,  exchange of  securities  or similar
transaction  involving SMI, other than in the ordinary  course of business,  nor
shall they deliver to any other  person any  information  concerning  SMI or its
business,  financial  affairs or prospects for the purpose or with the intent of
permitting  such  person  or  entity  to  evaluate  the  possibility  of  such a
transaction involving SMI.

     6.12 PURCHASE AND SALE AGREEMENTS.  SMI shall distribute to each of the SMI
Shareholders a Purchase and Sale Agreement in substantially the form attached as
Exhibit B (the "Purchase and Sale  Agreement") to be signed by them and returned
to SMI for delivery to AKI at the Closing.  SMI shall also distribute to each of
the SMI  Shareholders  for  informational  purposes (i) a copy of the AKI Annual
Report, (ii) a copy of this Agreement and (iii) a copy of the Escrow Agreement.

     6.13 PUBLIC  ANNOUNCEMENTS.  Except as required by any applicable law, rule
or regulation,  prior to the Closing SMI shall not issue nor permit to be issued
any press  release or otherwise  make or permit to be made any public  statement
with respect to the  transactions  contemplated  by this  Agreement  without the
prior written consent of AKI.

     6.14  RESIGNATIONS OF NEW AKI DIRECTORS AND OFFICERS.  SMI shall deliver to
the Escrow Agent at the Closing the conditional written  resignations of each of
the New AKI Directors and New AKI Officers.

                                       20

<PAGE>


     6.15 APPOINTMENT OF SUCCESSOR DIRECTORS. The persons to be appointed as the
New AKI  Directors  at the  Effective  Time shall adopt the  Successor  Director
Resolutions and shall deliver an original signed copy of such resolutions to the
Escrow Agent in connection with the Closing as provided in Section 3.02(a)(v).

     6.16 PAYMENT OF LEGAL FEES.  SMI agrees to pay to Miller & Holguin,  at the
time of the Closing, one-half of its total legal fees and costs for all services
rendered as counsel to AKI in connection with the  transactions  contemplated by
this Agreement.

     6.17  INSTRUCTION  LETTER TO TRANSFER AGENT. SMI agrees to deliver to AKI's
stock transfer agent, in connection with the Closing,  an irrevocable  letter of
instructions in substantially the form attached hereto as Exhibit C.

     6.18  CONDUCT OF  BUSINESS  PRIOR TO CLOSE OF  ESCROW.  SMI  covenants  and
agrees,  at all times after the Effective  Date while any of the Escrowed  Items
continue  to be held in  escrow  under  the terms of the  Escrow  Agreement,  as
follows:

          (a) SMI and its subsidiaries  will operate their  businesses  separate
and apart from AKI;

          (b) SMI and its  subsidiaries  will not  transfer  or  assign  to AKI,
directly  or  indirectly,  by any means  whatsoever,  any of SMI's  liabilities,
debts,  expenses,  losses,  judgments,  claims, damages or other obligations and
will not cause AKI to incur any liabilities, debts, expenses, losses, judgments,
claims,  damages or other obligations on behalf or for the benefit of SMI or its
subsidiaries; and

          (c) SMI and its  subsidiaries  will pay in a timely  manner all legal,
accounting  and other costs and expenses of AKI incurred in connection  with the
Private Placement and incurred for any other purpose, including, but not limited
to, costs and expenses of effecting a change of AKI's corporate name,  preparing
and filing reports and statements under the Securities Exchange Act of 1934, and
satisfying all other applicable laws and regulations.

     6.19 ASSUMPTION OF LIABILITIES AND OBLIGATIONS.  Upon the occurrence of any
rescission of the  Acquisition  under the terms of this Agreement and the Escrow
Agreement,  SMI hereby  assumes and agrees to pay and satisfy in a timely manner
any and all liabilities, debts, expenses, losses, judgments, claims, damages and
other obligations of AKI which may be in existence at that time.


                                  ARTICLE SEVEN

                         COVENANTS AND AGREEMENTS OF AKI

     AKI hereby  covenants  and agrees,  between the date hereof and the date of
Closing (and, with respect to Section 7.08, also after the Closing), as follows:

     7.01  FULFILLMENT OF CONDITIONS AND  COVENANTS.  AKI shall not  voluntarily
undertake  any  course  of  action  inconsistent  with the  satisfaction  of the
requirements and conditions applicable to it as set forth in this Agreement, and
AKI shall promptly do all acts and take all such measures as may be necessary or
appropriate to enable it to perform as early as possible the obligations  herein
provided.

                                       21

<PAGE>


     7.02 ACCESS TO  INFORMATION.  Upon  reasonable  notice from SMI,  AKI shall
deliver to the  representatives  of SMI,  or grant such  representatives  access
during normal business hours to, the books,  records and financial statements of
AKI to make such reviews,  examinations and investigations  thereof as SMI deems
necessary.

     7.03 COMPLIANCE WITH APPLICABLE SECURITIES LAWS. AKI agrees to use its best
efforts to comply with all  applicable  securities  laws in connection  with the
offer  and  sale of the AKI  Shares  to the SMI  Shareholders  and  will pay all
expenses incident thereto.

     7.04  RESIGNATIONS  OF  EXISTING  DIRECTORS  AND  OFFICERS.  The  board  of
directors  of AKI shall  obtain  written  resignations  of each of the  existing
directors and officers of AKI, to become  effective at the Effective  Time,  and
shall deliver them to SMI at the Closing.

     7.05  APPOINTMENT OF NEW DIRECTORS AND OFFICERS.  The board of directors of
AKI shall adopt the New Director  Resolutions  (as defined in Section  3.04) and
the New  Officer  Resolutions  (as  defined in Section  3.05) and shall  deliver
certified copies of such resolutions to SMI at the Closing.

     7.06 CONDUCT OF BUSINESS.  AKI shall conduct the operations of its business
only in the ordinary course. Except as otherwise  contemplated by this Agreement
or consented to by SMI in writing,  between the date of this  Agreement  and the
Closing, AKI shall not:

          (a) Engage in any material  transaction outside the ordinary course of
business;

          (b) Make any capital expenditures other than in the ordinary course of
business;

          (c) Enter into any material guaranties or otherwise incur or suffer to
exist any material contingent liabilities;

          (d)  Enter  into  any  material  new   indebtedness,   or  cancel  any
indebtedness due it except upon full payment thereof;

          (e) Make any payment of dividends  or other  unusual  distribution  of
cash or assets to stockholders or employees,  including repayment of outstanding
indebtedness;

          (f) Make any material change in any method of accounting or accounting
practice;

          (g)  Enter  into  or  engage  in any  transaction  with  any  officer,
director, shareholder or affiliate, except for the payment of salaries and other
activities in the ordinary course of business;

          (h) Fail to pay when due, or fail to maintain a reserve  adequate  for
the payment when due of, any applicable local, state or federal taxes;

          (i) Issue or sell any shares of common stock or other equity security,
grant any stock option or warrant,  or otherwise issue any security  convertible
into capital stock;

                                       22

<PAGE>


          (j) Take any other  action which would  render any  representation  or
warranty of AKI herein inaccurate as of the date such action is taken; or

          (k)  Agree,  whether  in  writing  or  otherwise,  to do  any  of  the
foregoing.

     7.07 FINANCIAL RECORDS. AKI shall accurately maintain its books and records
and  promptly  advise  SMI in  writing  of any  material  adverse  change in the
condition (financial or otherwise), assets, liabilities or business of AKI.

     7.08 AGREEMENT WITH RESPECT TO OTHER REGULATORY FILINGS. AKI agrees that it
shall  cooperate  with SMI in the  preparation of any document or other material
which may be required by any governmental  agency as a predicate to or result of
the transactions herein contemplated.

     7.09  SOLICITATION  OF  INQUIRIES.   Unless  otherwise  permitted  by  this
Agreement,  during the No-Shop  Period (as defined in Section  6.11) neither AKI
nor its directors, employees, agents or representatives shall, without the prior
written consent of SMI,  solicit from any other person,  firm or corporation any
inquiry  or  proposal  relating  to  a  merger,   consolidation,   amalgamation,
arrangement,  purchase  or sale of assets,  exchange  of  securities  or similar
transaction  involving AKI, other than in the ordinary  course of business,  nor
shall they deliver to any other  person any  information  concerning  AKI or its
business,  financial  affairs or prospects for the purpose or with the intent of
permitting  such  person  or  entity  to  evaluate  the  possibility  of  such a
transaction involving AKI.

     7.10 PUBLIC  ANNOUNCEMENTS.  Except as required by any applicable law, rule
or regulation,  prior to the Closing AKI shall not issue nor permit to be issued
any press  release or otherwise  make or permit to be made any public  statement
with respect to the  transactions  contemplated  by this  Agreement  without the
prior written consent of SMI.

     7.11  REPRESENTATION  LETTER.  AKI shall  deliver  to SMI at the  Closing a
representation  letter signed by Buddy Young in substantially  the form attached
hereto as Exhibit D (the "Representation Letter").


                                  ARTICLE EIGHT

                      CONDITIONS PRECEDENT IN FAVOR OF SMI

     The obligations of SMI contemplated herein are subject to the satisfaction,
at or before the Closing,  of all of the conditions set out hereinbelow.  If any
such condition is not satisfied, SMI shall have the right, at its sole election,
either to waive the  condition  in question  and proceed with the Closing or, in
the alternative,  to terminate this Agreement  without  liability.  In the event
that SMI elects to waive the condition in question and proceed with the Closing,
the condition in question  shall be deemed to have been satisfied and shall have
no further force or effect hereunder in the absence of any  misrepresentation of
AKI to SMI with respect to such condition.

                                       23

<PAGE>


     8.01 ACCURACY OF AND CERTIFICATE AS TO REPRESENTATIONS AND WARRANTIES.  The
representations  and warranties of AKI contained  herein and in all documents to
be delivered  pursuant hereto shall be true and correct in all material respects
as of the Closing, as if made at such time, and SMI shall have received from AKI
a  certificate,  dated as of the Closing and signed by an  executive  officer of
AKI, certifying that all such  representations and warranties of AKI remain true
and correct as of the Closing.

     8.02 COMPLIANCE  WITH  COVENANTS.  AKI shall have performed and complied in
all material respects with all covenants,  agreements and conditions required by
this Agreement to be performed or satisfied by AKI.

     8.03  ACTION/PROCEEDING.  No court  shall  have  issued an order  effective
against a party to restrain or prohibit the transactions herein contemplated.

     8.04  CONSENTS.  SMI shall have  obtained  all Required  Consents  from the
parties from whom consent is required,  as listed on Schedule  4.25 hereto,  and
from  any  other  third  party  (including  any  federal,  provincial  or  local
governmental  agency or  instrumentality)  as may be necessary or appropriate in
connection  with  the  execution  and  delivery  of  this  Agreement,  or to the
consummation  of the  transactions  contemplated  hereby,  and  SMI  shall  have
obtained documentation or other evidence confirming same.

     8.05  COMPLIANCE  WITH LAW.  There  shall  have been  obtained  any and all
permits,  approvals and consents of all  governmental  bodies or agencies  which
counsel  for  SMI  may   reasonably   deem  necessary  or  appropriate  so  that
consummation  of the  transactions  contemplated  by this  Agreement  will be in
compliance in all material respects with applicable laws.

     8.06  OPINION OF COUNSEL  FOR AKI.  SMI shall have  received  an opinion of
Miller & Holguin, counsel to AKI, dated as of the Closing, which is addressed to
SMI and the SMI  Shareholders  and is  satisfactory in form and substance to SMI
and its counsel, to the effect that:

          (a) AKI is a corporation duly organized,  validly existing and in good
standing under the laws of the State of Delaware;

          (b) AKI is qualified to do business in the State of California;

          (c)  AKI  has  corporate  power  and  authority  to  enter  into  this
Agreement,  the Escrow Agreement, the Purchase and Sale Agreements and the Asset
Sale Agreement and to perform its obligations thereunder,  and AKI has corporate
power and authority to own its  properties and assets and to conduct its present
business;

          (d) The  execution,  delivery and  performance of the agreements to be
delivered  pursuant  hereto by AKI have been duly authorized and approved by AKI
and  constitute  the valid and binding  obligations  of AKI duly  enforceable in
accordance  with  their  terms  except as such  enforcement  may be  limited  by
bankruptcy,  insolvency and other similar laws affecting the rights of creditors
generally, and will not contravene constating documents,  by-laws,  contracts or
instruments by which AKI or its assets are bound or to which they are subject;

          (e) The AKI Shares to be issued and  delivered at the Closing are duly
authorized,   validly  issued,  fully  paid  and  nonassessable,   and  free  of
pre-emptive rights;

                                       24

<PAGE>


          (f) The offer and sale of the AKI Shares to be issued and delivered at
the  Closing  does not  require  registration,  qualification  or  delivery of a
prospectus under the Securities Act of 1933 or any state securities laws;

          (g) Other than (i) the pre-Closing filing and delivery to stockholders
of the Stockholder  Notice  described in Section 8.17 and (ii) the  post-Closing
filing  of  securities  exemption  notice  filings  required  in  the  State  of
California  and the  Province  of Ontario,  no  governmental  notices,  filings,
approvals or consents are required in order for AKI to complete the transactions
contemplated by this Agreement;

          (h) To counsel's knowledge, without investigation,  AKI is not a party
to any litigation or the subject of any judgment or actual or threatened claim;

          (i) To counsel's knowledge,  without  investigation,  AKI has not been
the subject of any  investigation,  stop order or legal action by the Commission
or any state securities authorities having jurisdiction;

          (j)  The   transactions   contemplated  by  this  Agreement  will  not
contravene any applicable law, rule or regulation to which AKI is subject;

          (k) To counsel's  knowledge,  based solely on a recently  dated search
report in respect of registrations  under the California Uniform Commercial Code
("UCC")  made  against  AKI,  provided by a  professional  search  service  (the
"California  Report"),  AKI is not  referenced  as a  debtor  in the  California
Report,  other than in  respect of those  filings  described  in the  California
Report; and

          (l) The  Consultant  Shares,  when issued under an effective Form S -8
registration   statement  after  delivery  by  AKI  of  the  required  Form  S-8
prospectus, will not be "restricted securities" as defined by Rule 144 under the
Securities Act of 1933,  will not be required to bear a legend under  applicable
U.S.  securities  laws,  and will have  been  validly  issued as fully  paid and
non-assessable shares of AKI.

     In rendering  its opinion,  counsel for AKI may rely upon  certificates  of
officers  of AKI and  certificates  of  governmental  authorities  as to factual
matters.

     8.07  DELIVERY OF  RESOLUTIONS.  The board of  directors  of AKI shall have
adopted the New Director  Resolutions  (as defined in Section  3.04) and the New
Officer  Resolutions  (as  defined  in Section  3.05) and shall  have  delivered
certified copies of such resolutions to SMI at the Closing.

     8.08 DELIVERY OF AKI SHARES. Pursuant to the terms of the Escrow Agreement,
AKI shall have  delivered  to the Escrow  Agent at the Closing the  certificates
representing the AKI Shares (which may be done concurrently with the delivery by
SMI to the  Escrow  Agent of the  certificates  representing  the SMI Shares and
related stock powers or other transfer documentation as provided in Section 9.13
hereof).

                                       25

<PAGE>


     8.09  ASSET  SALE  AGREEMENT.  AKI shall  have  entered  into an Asset Sale
Agreement in  substantially  the form attached hereto as Exhibit E providing for
the transfer by AKI to Mr. Young or an entity  owned or  controlled  by him (the
"Buyer")  immediately  after the Effective Time of the Acquisition of all of the
assets and liabilities  held by AKI  immediately  prior to the Effective Time of
the Acquisition, and AKI and the Buyer shall have taken all appropriate steps to
be ready to complete such transfer of assets and liabilities.

     8.10  PURCHASE  AND SALE  AGREEMENTS.  SMI  shall  have  received  properly
executed  Purchase  and Sale  Agreements  from all of the SMI  Shareholders  for
delivery to AKI at the Closing.

     8.11 OTHER  INFORMATION.  SMI shall have received such other  certificates,
opinions  and other  documents  as it or its counsel may  reasonably  require in
order to consummate the transactions  contemplated hereby, all of which shall be
in form and substance satisfactory to it and its counsel.

     8.12 ADVERSE CHANGE. AKI shall not have suffered any material change,  loss
or damage,  whether or not covered by insurance,  since the date of execution of
this Agreement.

     8.13  CORPORATE  AUTHORIZATION.  AKI shall have  delivered to SMI certified
copies of all  appropriate  resolutions of AKI's board of directors  authorizing
the transactions contemplated by this Agreement.

     8.14  CERTIFICATE OF STATUS.  AKI shall have delivered to SMI a certificate
of good standing and a tax clearance  certificate from the Delaware Secretary of
State  with  respect  to AKI  dated  not more  than ten (10)  days  prior to the
Closing.

     8.15 INCUMBENCY CERTIFICATE.  AKI shall have delivered to SMI a certificate
of  incumbency  with respect to those persons who are the directors and officers
of AKI at the time of the Closing.

     8.16 UCC  SEARCH  REPORT.  AKI shall  have  delivered  to SMI a copy of the
California Report made as of a recent date.

     8.17 STOCKHOLDER NOTICE. At least ten days prior to the Closing,  AKI shall
have filed with the Commission and sent to AKI's  stockholders  the notice which
is required by Section  14(f) of the  Securities  Exchange  Act of 1934 and Rule
14f-1  promulgated  thereunder  (the  "Stockholder  Notice") with respect to the
anticipated change in control of AKI's board of directors at the Effective Time.

     8.18 DELIVERY OF ALL ESCROW ITEMS.  AKI shall have  delivered to the Escrow
Agent all items which AKI is required to deliver in connection  with the Closing
under the Escrow Agreement.

                                       26



<PAGE>

                                  ARTICLE NINE

                      CONDITIONS PRECEDENT IN FAVOR OF AKI

     The obligations of AKI contemplated herein are subject to the satisfaction,
at or before the Closing,  of all of the conditions set out hereinbelow.  If any
such condition is not satisfied, AKI shall have the right, at its sole election,
either to waive the  condition  in question  and proceed with the Closing or, in
the alternative,  to terminate this Agreement  without  liability.  In the event
that AKI elects to waive the condition in question and proceed with the Closing,
the condition in question  shall be deemed to have been satisfied and shall have
no further force or effect hereunder in the absence of any  misrepresentation of
SMI to AKI with respect to such condition.

     9.01 ACCURACY OF AND CERTIFICATE AS TO REPRESENTATIONS AND WARRANTIES.  The
representations  and warranties of SMI contained  herein and in all documents to
be delivered  pursuant hereto shall be true and correct in all material respects
as of the Closing, as if made at such time, and AKI shall have received from SMI
a  certificate,  dated as of the Closing and signed by an authorized  officer of
SMI, certifying that all such  representations and warranties of SMI remain true
and correct as of the Closing.

     9.02 COMPLIANCE  WITH  COVENANTS.  SMI shall have performed and complied in
all material respects with all covenants,  agreements and conditions required by
this Agreement to be performed or satisfied by SMI.

     9.03  ACTION/PROCEEDING.  No court  shall  have  issued an order  effective
against a party to restrain or prohibit the transactions herein contemplated.

     9.04  CONSENTS.  SMI shall have  obtained  all Required  Consents  from the
parties from whom consent is required,  as listed on Schedule  4.25 hereto,  and
from  any  other  third  party  (including  any  federal,  provincial  or  local
governmental  agency or  instrumentality)  as may be necessary or appropriate in
connection  with  the  execution  and  delivery  of  this  Agreement,  or to the
consummation  of the  transactions  contemplated  hereby,  and  AKI  shall  have
obtained from SMI documentation or other evidence confirming same.

     9.05  COMPLIANCE  WITH LAW.  There  shall  have been  obtained  any and all
permits,  approvals and consents of all  governmental  bodies or agencies  which
counsel  for  AKI  may   reasonably   deem  necessary  or  appropriate  so  that
consummation  of the  transactions  contemplated  by this  Agreement  will be in
compliance in all material respects with applicable laws.

     9.06  PURCHASE  AND SALE  AGREEMENTS.  SMI shall  have  delivered  to AKI a
properly executed Purchase and Sale Agreement from each of the SMI Shareholders.

     9.07  OPINION OF COUNSEL FOR SMI.  AKI shall have  received an opinion from
Chitiz  Pundit  Pathak  &  Sokoloff,  counsel  to SMI,  which is dated as of the
Closing and is satisfactory in form and substance to AKI and its counsel, to the
effect that:

          (a) SMI and each of its subsidiaries are corporations  duly organized,
validly existing and in good standing under the laws of the Province of Ontario;

          (b) SMI and each of its  subsidiaries  are qualified to do business in
the Province of Ontario;

          (c)  SMI  has  corporate  power  and  authority  to  enter  into  this
Agreement,  the Escrow Agreement and the Asset Sale Agreement and to perform its
obligations  thereunder,  and SMI and its subsidiaries  have corporate power and
authority to own their  respective  properties  and assets and to conduct  their
present businesses;

                                       27

<PAGE>


          (d) The  execution,  delivery and  performance of the agreements to be
delivered  pursuant  hereto by SMI have been duly authorized and approved by SMI
and  constitute  the valid and binding  obligations  of SMI duly  enforceable in
accordance  with  their  terms  except as such  enforcement  may be  limited  by
bankruptcy,  insolvency and other similar laws affecting the rights of creditors
generally, and will not contravene constating documents,  by-laws,  contracts or
instruments  by  which  SMI,  its  subsidiaries,  or  the  assets  of SMI or its
subsidiaries are bound or to which they are subject;

          (e) The SMI Shares to be delivered at the Closing are duly authorized,
validly issued, fully paid and nonassessable, and free of pre-emptive rights;

          (f) The sale to AKI of the SMI Shares at the  Closing  is exempt  from
all applicable provincial takeover statutes, rules and regulations;

          (g) No  governmental  notices,  filings,  approvals  or  consents  are
required  in order for SMI to complete  the  transactions  contemplated  by this
Agreement;

          (h) To counsel's knowledge, without investigation,  SMI is not a party
to any  litigation or the subject of any judgment or actual or threatened  claim
except as disclosed in the Agreement or the schedules thereto;

          (i) To counsel's knowledge,  without  investigation,  SMI has not been
the subject of any  investigation,  stop order or legal action by any securities
authorities having jurisdiction; and

          (j)  The   transactions   contemplated  by  this  Agreement  will  not
contravene any applicable law, rule or regulation to which SMI is subject; and

          (k) To counsel's  knowledge,  based solely on a recently  dated search
report in respect of  registrations  under the Personal  Property Act  (Ontario)
made against SMI,  provided by a professional  search service (the "Ontario PPSA
Report"),  SMI is not  referenced as a debtor in the Ontario PPSA Report,  other
than in respect of those filings described in the Ontario PPSA Report.

          In rendering its opinion,  counsel for SMI may rely upon  certificates
of officers of SMI and  certificates of  governmental  authorities as to factual
matters.

     9.08  SECURITIES LAW COMPLIANCE.  All applicable  securities laws have been
satisfied in connection with the offer and sale of the AKI Shares.

     9.09 OTHER  INFORMATION.  AKI shall have received such other  certificates,
opinions  and other  documents  as it or its counsel may  reasonably  require in
order to consummate the transactions  contemplated hereby, all of which shall be
in form and substance satisfactory to it and its counsel.

                                       28

<PAGE>


     9.10  ADVERSE  CHANGE.  No  material  adverse  change  in  the  results  of
operations  or the  financial  condition of SMI which  materially  impairs SMI's
ability to conduct its Business shall have occurred other than for changes which
occur from the fact that SMI has entered into this  Agreement  with AKI, and SMI
shall not have  suffered any  material  change,  loss or damage,  whether or not
covered by  insurance,  since the date of  execution  of this  Agreement,  which
change,  loss or damage  materially  affects  or impairs  the  ability of SMI to
conduct its Business.  Without limitation of the foregoing, there shall not have
occurred any  destruction  of or damage or loss to all or any part of the assets
of SMI from any cause  whatsoever,  including,  but not limited to, fire, flood,
accident,  acts of  God,  earthquake,  insurrection,  riot  or any  other  cause
commonly referred to as FORCE MAJEURE,  which destruction,  damage or loss shall
not have been fully repaired to AKI's satisfaction.

     9.11  CORPORATE  AUTHORIZATION.  SMI shall have  delivered to AKI certified
copies of all  appropriate  resolutions of SMI's board of directors  authorizing
the transactions contemplated by this Agreement.

     9.12  CERTIFICATE OF STATUS.  SMI shall have delivered to AKI a certificate
of status from the  Ministry of Consumer  Commercial  Relations  of Ontario with
respect  to SMI and each of its  subsidiaries  dated not more than ten (10) days
prior to the Closing.

     9.13  TRANSFER  AND  DELIVERY OF SMI  SHARES.  Pursuant to the terms of the
Escrow  Agreement,  SMI shall have  delivered to the Escrow Agent at the Closing
the  certificates  representing  the SMI Shares,  together  with stock powers or
other  transfer  documentation  pursuant  to  which  the SMI  Shareholders  have
transferred  ownership of their  respective SMI Shares to AKI (which may be done
concurrently  with the delivery by AKI to the Escrow  Agent of the  certificates
representing the AKI Shares as provided in Section 8.08 hereof).

     9.14  ASSET  SALE  AGREEMENT.  AKI shall  have  entered  into an Asset Sale
Agreement in  substantially  the form attached hereto as Exhibit E providing for
the transfer by AKI to Mr. Young or an entity  owned or  controlled  by him (the
"Buyer")  immediately  after the Effective Time of the Acquisition of all of the
assets and liabilities  held by AKI  immediately  prior to the Effective Time of
the Acquisition, and AKI and the Buyer shall have taken all appropriate steps to
be ready to complete such transfer of assets and liabilities.

     9.15 INCUMBENCY CERTIFICATE.  SMI shall have delivered to AKI a certificate
of  incumbency  with respect to those persons who are the directors and officers
of SMI at the time of the Closing.

     9.16 STOCKHOLDER NOTICE. At least ten days prior to the Closing,  AKI shall
have filed with the Commission and sent to AKI's  stockholders  the  Stockholder
Notice described in Section 8.17.

     9.17 DELIVERY OF ALL ESCROW ITEMS.  SMI shall have  delivered to the Escrow
Agent all items which SMI is required to deliver in connection  with the Closing
under the Escrow Agreement.

     9.18 PPSA  SEARCH  REPORT.  SMI shall have  delivered  to AKI a copy of the
Ontario PPSA Report made as of a recent date.

                                       29

<PAGE>

                                  ARTICLE TEN

                 TERMINATION AND ABANDONMENT OF THE ACQUISITION

     10.01  TERMINATION.  This Agreement may be terminated  and the  Acquisition
abandoned (notwithstanding any shareholder approval of the Acquisition) prior to
the Effective Time:

          (a) by mutual written consent of AKI and SMI at any time;

          (b) by SMI at any time after  February 29, 2000,  provided that SMI is
not in material breach of any covenant,  agreement,  representation  or warranty
made by it in this Agreement;

          (c) by AKI at any time after  February 29, 2000,  provided that AKI is
not in material breach of any covenant,  agreement,  representation  or warranty
made by it in this Agreement;

          (d) by AKI or SMI at any time if an order is  entered  by any court or
governmental agency having jurisdiction enjoining AKI or SMI, respectively, from
consummating  any of the  transactions  contemplated  by this Agreement and such
order  shall not have been  vacated,  reversed  or  withdrawn  on or before  the
thirtieth (30th) day after the date on which such order was first issued; or

          (e) by AKI or SMI if (i) any  representation  or warranty of the other
hereunder  shall not have been true and correct as of the time at which made, or
(ii) any conditions  precedent to the  obligations of such party as set forth in
Article  Eight or Nine are not satisfied in a timely  fashion,  or (iii) default
shall  be made by the  other  hereunder  in the due  and  timely  observance  or
performance of any of its covenants and agreements herein  contained,  in either
event only if such representation or warranty cannot be made true and correct or
such default  cannot be cured on or prior to the fifteenth  (15th) day after the
non-defaulting  or breaching party notifies the other in writing of such default
or breach, specifying the nature thereof.

     10.02  NOTICE OF  TERMINATION.  The power of  termination  provided  for by
Section  10.01  hereof may be  exercised  only by a notice  given in writing and
signed on behalf of AKI by Buddy Young and on behalf of SMI by Brian Rattenbury.

     10.03 EFFECT OF  TERMINATION.  In the event of termination  and abandonment
pursuant to this  Article  Ten,  this  Agreement  shall  become void and have no
effect,  without  any  liability  on the part of any of the  parties,  except as
otherwise provided in Articles Eleven and Twelve hereof. Any announcement of the
termination of this Agreement and the  abandonment of the  Acquisition  shall be
made by means of a press release issued jointly by AKI and SMI unless  otherwise
required to be made by AKI pursuant to the federal or state securities laws.

                                       30


<PAGE>

                                 ARTICLE ELEVEN

                                 INDEMNIFICATION

     11.01 SURVIVAL OF REPRESENTATIONS  AND WARRANTIES.  The representations and
warranties  of each party  hereto  shall  survive  the  Closing and shall not be
affected  by any  investigation  made by or on behalf of AKI or SMI, as the case
may be. The  representations  and warranties  set forth in this Agreement  shall
expire with,  and be terminated  and  extinguished  upon,  the expiration of the
applicable  statute  of  limitations  with  respect  to the  matters  referenced
therein.  After  the  applicable  expiration  with  respect  to  any  particular
representation  or  warranty,  neither AKI nor SMI shall be under any  liability
whatsoever with respect to any such  representation  or warranty.  All covenants
and  agreements of the parties  contained  herein shall survive the Closing Date
and shall continue for the period required to fulfill the applicable covenant or
agreement.

     11.02 INDEMNIFICATION. The parties shall indemnify each other as follows:

          (a) SMI'S INDEMNITY.  SMI hereby agrees to indemnify,  defend and hold
harmless  AKI and its  stockholders,  directors,  officers  and agents  from and
against  all  losses,  judgments,  liabilities,  claims,  damages,  or  expenses
(including  reasonable  attorneys' fees) of every kind,  nature and description,
whether known or unknown,  absolute or  contingent,  joint or several  ("Loss"),
arising  out  of or  relating  to  (i)  any  misrepresentation,  breach  of  any
representation  or warranty,  or  non-fulfillment,  non-performance,  failure to
timely  or  fully  perform,  or  breach  of any  covenant,  agreement  or  other
obligation to be performed by SMI contained in this  Agreement or any exhibit or
schedule hereto, (ii) the conduct of SMI's Business prior to the Effective Time,
or (iii) the conduct of SMI's business after the Effective Time and prior to any
rescission of the Acquisition.

          (b) AKI'S INDEMNITY.  AKI hereby agrees to indemnify,  defend and hold
harmless SMI, the SMI Shareholders and SMI's directors, officers and agents from
and  against any Loss  arising out of or relating to (i) any  misrepresentation,
breach of any representation or warranty,  or non-fulfillment,  non-performance,
failure to timely or fully  perform,  or breach of any  covenant,  agreement  or
other  obligation  to be  performed by AKI  contained  in this  Agreement or any
exhibit or schedule  hereto,  or (ii) the conduct of AKI's business prior to the
Effective Time.

     11.03 INDEMNIFICATION NOTICE.

          (a) THIRD PARTY  CLAIM.  In the event that SMI, AKI or any other party
entitled to indemnification  under Section 11.02 hereof shall choose to assert a
claim for Loss or  potential  Loss based upon a claim by a third  party  ("Third
Party Claim"),  the party seeking  indemnification  ("Indemnified  Party") shall
notify the party against which indemnification is sought ("Indemnifying  Party")
in writing of such claim,  promptly following the occurrence of the event giving
rise  thereto,  certifying  that  such a claim has been  asserted  and the basis
therefor which shall be set forth in reasonable detail ("Notification").

                                       31

<PAGE>


               (i) The  Indemnifying  Party  shall  acknowledge  receipt  of the
Notification and advise the Indemnified  Party in writing twenty (20) days after
receipt thereof as to whether the Indemnifying  Party agrees to such Third Party
Claim and whether the  defense of the Third Party Claim shall be  undertaken  by
counsel of the choice of and at the expense of the  Indemnifying  Party.  If the
Indemnifying  Party so agrees,  the  Indemnifying  Party shall be deemed to have
accepted any  indemnifiable  Loss suffered  arising from such Third Party Claim,
the  defense  of which  has  been  assumed  by the  Indemnifying  Party.  If the
Indemnifying  Party advises the  Indemnified  Party that it shall  undertake the
defense of the Third Party Claim,  the  Indemnified  Party shall deliver all the
documents  related to the Third Party Claim to the Indemnifying  Party or to its
counsel, after which the responsibility of the Indemnified Party for the defense
of the Third Party Claim shall cease,  except that the  Indemnified  Party shall
make available all documents, books and records in its possession related to the
Third Party  Claim,  at no expense to the  Indemnifying  Party,  and shall fully
cooperate  with counsel for the  Indemnifying  Party,  including  providing  its
personnel  who are  acquainted  with the  facts or the  documents  or books  and
records related to the Third Party Claim.

               (ii) If the Indemnifying Party advises the Indemnified Party that
the  defense  of the  Third  Party  Claim  will not be  undertaken,  either  the
Indemnified Party shall settle such Third Party Claim (in which case, the amount
of such  settlement and all attorneys' fees attendant to the achievement of such
settlement  shall be deemed included in any  computation to determine  Loss), or
the Indemnified Party shall notify the Indemnifying Party of the identity of the
counsel  for the  Indemnified  Party who has been  selected  to defend the Third
Party Claim. The  Indemnifying  Party shall fully cooperate with the Indemnified
Party and its counsel to the extent that the Indemnifying Party has knowledge of
the facts or circumstances relating to the Third Party Claim and the Indemnified
Party shall cause its counsel to be available to the  Indemnifying  Party or its
counsel to respond to any inquiries of the  Indemnifying  Party  concerning  the
progress of such defense. In the event that the Indemnified Party shall assert a
claim  for Loss as a result of any loss  suffered  by the  Indemnified  Party in
settling or defending such Third Party Claim, the Indemnified Party shall notify
the Indemnifying  Party in writing of such claim.  The Indemnifying  Party shall
pay all costs related to the  settlement or the defense  within thirty (30) days
after a demand for the Loss or any component part is made.

          (b) NON-THIRD PARTY CLAIM.  In the event the  Indemnified  Party shall
choose to assert a claim for Loss or  potential  Loss by reason of other  than a
Third Party Claim, the Indemnified Party shall notify the Indemnifying  Party in
writing of such claim and the reasons therefor, which reasons shall be set forth
in reasonable  detail. The Indemnifying Party shall pay to the Indemnified Party
the  amount of the Loss  within  thirty  (30) days of  demand  pursuant  to this
Section 11.03.

     11.04 DISPUTE.

          (a) If the Indemnifying  Party disputes any claim for  indemnification
or its  obligation to indemnify any claim pursuant to this Article  Eleven,  the
Indemnifying  Party shall notify the  Indemnified  Party of such dispute  within
twenty  (20)  days of  receipt  of the  Notification.  If the  matter  cannot be
reconciled  by mutual  agreement,  the  matter  shall be  submitted  to  binding
arbitration as provided in Section 14.05 hereof.

          (b) If the Indemnifying  Party fails to fulfill its obligations  under
this Article, the Indemnified Party may submit the matter to binding arbitration
as provided in Section 14.05 hereof.


                                 ARTICLE TWELVE

                                LITIGATION COSTS

     12.01  LITIGATION  COSTS.  If  any  legal  action,   arbitration  or  other
proceeding  is brought for the  enforcement  of this  Agreement or because of an
alleged dispute,  breach, default or misrepresentation in connection with any of
the provisions of this  Agreement,  the successful or prevailing  party shall be
entitled  to recover  reasonable  attorneys'  fees,  court costs and other costs
incurred in such action or proceeding,  in addition to any other relief to which
it or they may be entitled.

                                       32

<PAGE>


                                ARTICLE THIRTEEN

                  CERTAIN ADDITIONAL AGREEMENTS OF THE PARTIES

     13.01 DUE DILIGENCE REVIEW.  The parties hereto  acknowledge and agree that
as of the date of this Agreement  neither AKI nor SMI has had the opportunity to
conduct  a  full  and  complete  due  diligence   investigation  of  the  other.
Consequently,   each  party  shall  continue  to  conduct  their  due  diligence
investigation of the other after the execution hereof,  and each party agrees to
provide  the other with all  materials  which may be  required  in order for the
other to complete this investigation.  In this regard, SMI acknowledges that SMI
has retained its own counsel in connection with the transactions contemplated by
this Agreement,  that SMI's counsel will advise SMI as to due diligence  issues,
and that SMI is not  relying on AKI or counsel for AKI for the  satisfaction  of
SMI's own due diligence requirements.

     If,  in the  course  of such  due  diligence  investigation,  either  party
determines  prior to the  Closing  that any facts or  circumstances  exist  with
respect to the other which are materially  inconsistent with the representations
and warranties  contained in this Agreement,  then such party may terminate this
Agreement by written notice to the other prior to Closing as provided in Article
Ten  hereof.  Any waiver by either  party of its right to  terminate  under this
Section shall not constitute a waiver of any other  condition for the benefit of
such party set forth in this Agreement.

     13.02  CONFIDENTIALITY.  Except as may be required  by law or as  otherwise
permitted  herein,  the parties hereto shall cause all  information  obtained by
them in connection  with the negotiation and performance of this Agreement to be
treated as confidential  and will not use, and will not knowingly  permit others
to  use,  any  such  information  in  any  manner   detrimental  to  the  other.
Notwithstanding  the  foregoing,  such  information  may  be  disclosed  (i)  in
connection with any filings or permit applications with governmental authorities
as may be necessary in order to complete the  transactions  contemplated by this
Agreement;  (ii) as necessary in order to obtain any Required  Consents of third
parties  to the  transactions  contemplated  by  this  Agreement;  or  (iii)  as
otherwise  necessary in order for AKI to close the transactions  contemplated by
this Agreement.  The provisions of this Section shall survive any termination of
this Agreement.

     13.03  PROVINCIAL  TAKEOVER  LAWS.  If  any  provincial  takeover  laws  or
regulations  shall  be  applicable  to the  transactions  contemplated  by  this
Agreement,  AKI and SMI shall use their  reasonable  best  efforts  to take such
actions and obtain such  approvals  as are  necessary  so that the  transactions
contemplated  by this Agreement may be consummated as promptly as practicable on
the terms  contemplated  by this Agreement and otherwise to minimize the effects
of such provisions on the transactions contemplated by this Agreement.

                                       33

<PAGE>


     13.04  PROCEDURE  FOR  REPLACEMENT  OF NEW  AKI  DIRECTORS.  If any New AKI
Director resigns,  is removed, or otherwise ceases to serve as a director of AKI
prior to the Private Placement Deadline,  the vacancy thereby created on the AKI
board of  directors  may be  filled  by the  election  or  appointment  of a new
director  prior to any  release of Escrowed  Items  pursuant to Section 3 of the
Escrow Agreement only if the person who is to become a director  delivers his or
her conditional  written  resignation to the Escrow Agent in  substantially  the
same form as the New Director Resignations received by the Escrow Agent from the
New AKI  Directors at the Closing.  In such a case,  that  person's  conditional
written  resignation  shall for all  purposes  be  deemed  to be a New  Director
Resignation and shall become  effective in the event of a rescission as provided
in Section 3(b)(iv) of the Escrow Agreement.


                                ARTICLE FOURTEEN

                                  MISCELLANEOUS

     14.01 NOTICES.  All notices,  waivers or other  communications  required or
contemplated  hereby shall be deemed given if delivered  personally,  or sent by
registered or certified  mail or air courier,  postage  prepaid,  return receipt
requested, or by telex or telecopier addressed to the parties so to be served as
follows:

                  If to SMI:

                           Mr. Manny Gross
                           Soccer Magic Inc.
                           10 Planchet Road, Unit #21
                           Concord, Ontario L4K 2C8

                  With a copy to:

                           Manoj Pundit, Esq.
                           Chitiz Pundit Pathak & Sokoloff
                           85 Richmond Street West, Suite 901
                           Toronto, Ontario M5H 2C9

                  If to AKI:

                           Mr. Buddy Young
                           Advanced Knowledge, Inc.
                           17337 Ventura Boulevard, Suite 224
                           Encino, California 91316

                  With a copy to:

                           J. Brad Wiggins, Esq.
                           Miller & Holguin
                           1801 Century Park East, Seventh Floor
                           Los Angeles, California 90067

                                       34

<PAGE>


     Service  of any such  notice  or  demand  so made by mail  shall be  deemed
complete  on the date of actual  delivery  thereof  as shown by the  addressee's
registry  or  certification  receipt,  or upon  the  expiration  of  seven  days
following  the date of mailing.  Any party hereto from time to time by notice in
writing  served upon the other as aforesaid  may  designate a different  mailing
address to which, or a different or additional  person to whom, all such notices
or demands thereafter shall be addressed.

     14.02 ASSIGNMENT. Neither the Agreement nor any of the rights hereunder may
be assigned by either party without the prior written consent of the other.

     14.03 EXPENSES.  Except as otherwise provided in this Agreement, each party
hereto  shall bear all  expenses  and costs  incurred by it with respect to this
Agreement and the transactions contemplated hereby.

     14.04  GOVERNING  LAW.  This  Agreement  shall be governed and construed in
accordance with the internal law of the State of California without reference to
its rules as to conflicts of law.

     14.05 DISPUTE.  Any controversy or claim arising out of or relating to this
Agreement,  or breach thereof,  including without  limitation claims against any
party or its affiliates, employees,  professionals,  officers or directors shall
be settled by binding arbitration in Los Angeles, California, in accordance with
the Commercial  Rules of the American  Arbitration  Association.  The arbitrator
shall  be an  active  member  of the  California  bar.  In the  proceeding,  the
arbitrator  shall apply California  substantive law and the California  Evidence
Code.  The  arbitrator  shall  prepare an award in writing,  which shall include
factual  findings  and any legal  conclusions  on which the  decision  is based.
Judgment upon any award  rendered by the  arbitrator may be entered in any court
having jurisdiction thereof. In any such proceeding,  the prevailing party shall
be entitled,  in addition to any other relief  awarded or adjudged,  such sum as
the arbitrator may fix as and for reasonable  attorneys' fees and costs, and the
same shall be included in the award and any judgment.

     14.06  ENTIRE   UNDERSTANDING.   All  prior  agreements,   representations,
discussions,  negotiations,  commitments and understandings  between the parties
are  incorporated  in this  Agreement  and the exhibits and  schedules  attached
hereto which  constitute the entire contract  between the parties.  The terms of
this  Agreement  are  intended  by the  parties as a final  expression  of their
agreement  with  respect  to such  terms as are  included  herein and may not be
contradicted  by  evidence  of any  prior  or  contemporaneous  written  or oral
representations,  agreements or understandings,  whether express or implied. The
parties  further  intend  that  this  Agreement  constitutes  the  complete  and
exclusive  statement of its terms and that no extrinsic evidence  whatsoever may
be introduced in any judicial proceeding,  if any, involving this Agreement.  No
amendment or variation of the terms of this Agreement shall be valid unless made
in writing and signed by each of the parties.

     14.07 FURTHER ASSURANCES.  Each party, both prior to and after the Closing,
shall reasonably cooperate with the other, at the other's request, in furnishing
information,  documents,  testimony and other  assistance in connection with the
transactions contemplated hereby.

     14.08 WAIVER. Each party may at any time waive compliance by the other with
any covenants or conditions  contained in this Agreement,  but only by a written
instrument executed by the party waiving such compliance. If either party waives
a condition of Closing,  the other party shall have no liability  hereunder with
respect to the matters so waived.

                                       35

<PAGE>


     14.09  HEADINGS.   All  Section  and  Article  headings  are  included  for
convenience only and are not intended to be full or accurate descriptions of the
contents thereof.

     14.10 COUNTERPARTS. This Agreement may be executed simultaneously in one or
more  counterparts,  each of which may be deemed  an  original  but all of which
together shall constitute one and the same  instrument.  In making proof of this
Agreement,  it shall not be  necessary  to produce or account  for more than one
counterpart.

     14.11 SEVERABILITY.  If any provision of this Agreement,  as applied to any
party or to any circumstance,  shall be adjudged by a court to be void,  invalid
or  unenforceable,  the same shall in no way affect any other  provision of this
Agreement,  the  application of such provision in any other  circumstance or the
validity or enforceability of this Agreement.

     14.12 BINDING ON SUCCESSORS. All of the terms, provisions and conditions of
this  Agreement  shall be  binding  upon and shall  inure to the  benefit of the
parties  hereto  and  their  respective  heirs,  successors,  assigns  and legal
representatives.

                       [REST OF PAGE INTENTIONALLY BLANK]


                                       36

<PAGE>


     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed in multiple originals as of the day and year first above written.


"AKI"

ADVANCED KNOWLEDGE, INC.


By:______________________________________
Name:  Buddy Young
Title: President and Chief Executive Officer


By:______________________________________
Name:  L. Stephen Albright
Title: Secretary



"SMI"

SOCCER MAGIC INC.


By:______________________________________
Name:  Manny Gross
Title: Chief Executive Officer


By:______________________________________
Name:  Myron Grunberg
Title: President

                                       37


<PAGE>


                           LIST OF ATTACHED SCHEDULES

  SCHEDULE      DESCRIPTION

   3.04         New AKI Directors
   3.05         New AKI Officers
   4.03         Breaches and Defaults
   4.04         Certain Changes
   4.05         Real Property Leases
   4.06         Equipment Leases
   4.07         Trade Names
   4.08         Contracts and Commitments
   4.09         Licenses and Permits
   4.10         Litigation
   4.11         Insurance Policies
   4.13         Compliance with Law
   4.14         Shareholders of SMI
   4.15         Matters Relating to Labor and Employment
   4.18         Subsidiaries and Affiliates
   4.19         Banking Facilities
   4.21         Indebtedness to and from Affiliates
   4.22         Related Transactions
   4.24         Finder's Fees and Brokerage Fees
   4.25         Required Consents
   5.10         Stockholders of AKI
   5.14         Indebtedness to and from Officers, Directors and Stockholders


                                       38

<PAGE>


                                LIST OF EXHIBITS

Exhibit A                  Escrow Agreement
Exhibit B                  Purchase and Sale Agreement
Exhibit C                  Instruction Letter
Exhibit D                  Representation Letter
Exhibit E                  Asset Sale Agreement

                                       39

<PAGE>


                                  SCHEDULE 3.04
                                NEW AKI DIRECTORS


Manny Gross
1122-7905 Bayview Avenue
Markham, Ontario
L3T 7N3

Myron Grunberg
922-7805 Bayview Avenue
Markham, Ontario
L3T 7N1

Brian Rattenbury
10 Regis Drive
Toronto, Ontario
M2M 3J5

                                       40

<PAGE>


                                  SCHEDULE 3.05
                                NEW AKI OFFICERS


Manny Gross
Chairman and Chief Executive Officer
1122-7905 Bayview Avenue
Markham, Ontario
L3T 7N3

Myron Grunberg
President
922-7805 Bayview Avenue
Markham, Ontario
L3T 7N1

Brian Rattenbury
Secretary/Treasurer
10 Regis Drive
Toronto, Ontario
M2M 3J5

                                       41


<PAGE>


                                  SCHEDULE 4.03
                              BREACHES AND DEFAULTS


Soccer Magic (Kingston) Inc. is in default, as at October 31, 1999, with respect
to payments in arrears on the following contractual commitments:

  Real property lease with ABNA Investments Ltd.
  (4 payments of Cdn$3,300)                                           Cdn$13,200

  Property taxes owing under the terms of the real
  property lease with ABNA Investments Ltd.                           Cdn$62,641

  Air structure leases with Four Courts Limited
  (3 payments of Cdn$6,285)                                           Cdn$18,855

  GE Capital Modular Sales Limited (6 payments of Cdn$3,743)          Cdn$22,458


Soccer Magic (London) Inc. is in default,  as at October 31, 1999,  with respect
to payments in arrears on the following contractual commitments:

     Property taxes owing under the terms of the real property
     lease with Carlton Realty (London) Limited                       Cdn$54,158

     Air structure leases with Four Courts Limited
     (3 payments of Cdn$6,185)                                        Cdn$18,555

     GE Capital Modular Sales Limited (6 payments of Cdn$3,743)       Cdn$22,458

                                       42


<PAGE>


                                  SCHEDULE 4.04
                                 CERTAIN CHANGES


None.

                                       43



<PAGE>


                                  SCHEDULE 4.05
                              REAL PROPERTY LEASES


Soccer Magic (Kingston) Inc. - 23 Soccer Lane,  Kingston,  Ontario,  leased from
ABNA Investments Ltd., Scotland Road, RR#1, Odessa, Ontario

Soccer Magic (London) Inc. - 6 Cuddy  Boulevard,  London,  Ontario,  leased from
Carlton Realty (London) Ltd. c/o ICORR  Properties,  410 - 700 Richmond  Street,
London, Ontario, N6A 5C7

                                       44


<PAGE>


                                  SCHEDULE 4.06
                                EQUIPMENT LEASES


Soccer Magic (Kingston) Inc.

     Air  Structure  lease with Four Courts  Limited,  550 Imperial  Road North,
     Guelph,  Ontario,  N1H 7M3 Air Lock lease  with Four  Courts  Limited,  550
     Imperial Road North,  Guelph,  Ontario,  N1H 7M3 Clubhouse modular building
     lease with GE Capital Modular Sales, 2300 Meadowvale Boulevard,
         Mississauga, Ontario, L5N 5P9

Soccer Magic (London) Inc.

     Air  Structure  lease with Four Courts  Limited,  550  Imperial  Road North
     Guelph,  Ontario,  N1H 7M3 Air Lock lease  with Four  Courts  Limited,  550
     Imperial Road North,  Guelph,  Ontario,  N1H 7M3 Clubhouse modular building
     lease with GE Capital Modular Sales, 2300 Meadowvale Boulevard,
         Mississauga, Ontario, L5N 5P9

                                       45


<PAGE>


                                  SCHEDULE 4.07
                                   TRADE NAMES


Trademarks registered in Canada only:

     "Soccer Magic"

     "In a league of its own"

                                       46


<PAGE>


                                  SCHEDULE 4.08
                            CONTRACTS AND COMMITMENTS


1.   Lease agreement between Soccer Magic (Kingston) Inc. ("SMI  Kingston"),  as
     tenant, and Abna Investments Ltd., as landlord,  in respect of the lease of
     approximately 2 acres situated at 23 Soccer Lane, Kingston,  Ontario, for a
     term of ten years from September 1, 1997, for annual rent of  approximately
     $42,000;

2.   Lease  agreement  between  Soccer Magic (London) Inc.  ("SMI  London"),  as
     tenant,  and Carlton Realty  (London) Ltd., as landlord,  in respect of the
     lease of  approximately  2.1 acres situated at 6 Cuddy  Boulevard,  London,
     Ontario,  for a term of ten years from November 1, 1997, for annual rent of
     approximately $45,000;

3.   Master  equipment lease  agreement  between Four Courts Limited ("FCL") and
     SMI  Kingston,  dated  June 16,  1997,  in  respect of the lease of certain
     equipment by SMI Kingston from FCL including the dome,  furnace,  inflation
     unit, ventilation fan and related equipment, for monthly payments of $6,000
     over a term of 120  months  commencing  February  1,  1998;  which  FCL has
     assigned to Republic National Bank of New York (Canada) Inc.;

4.   Master equipment lease agreement between FCL and SMI London, dated July 21,
     1997, in respect of the lease of certain equipment by SMI Kingston from FCL
     including the dome,  furnace,  inflation unit,  ventilation fan and related
     equipment,  for  monthly  payments  of  $5,900  over a term  of 120  months
     commencing March 1, 1998; which FCL has assigned to Republic  National Bank
     of New York (Canada) Inc.;

5.   Finance lease between General Electric Capital Canada, Inc., as the lessor,
     and  SMI  Kingston,  as  the  lessee,  in  respect  of  the  lease  of  the
     prefabricated building leading to the dome, providing for a down payment of
     $30,000 and monthly payments of $3,743 over a term of 60 months, commencing
     February 1, 1998, secured by an assignment of all insurance proceeds on the
     leased assets, with an option to purchase the leased assets for $1.00;

6.   Finance lease between General Electric Capital Canada, Inc., as the lessor,
     and SMI London, as the lessee, in respect of the lease of the prefabricated
     building  leading to the dome,  providing for a down payment of $30,000 and
     monthly  payments of $3,743 over a term of 60 months,  commencing  March 1,
     1998,  secured by an  assignment  of all  insurance  proceeds on the leased
     assets, with an option to purchase the leased assets for $1.00;

                                       47

<PAGE>


7.   Loan  agreement  between  SMI  Kingston  and Hong Kong Bank of Canada  (the
     "Bank"),  dated August 29,  1997,  in respect of a demand loan of $250,000,
     repayable  in monthly  principal  payments  plus  interest,  with  interest
     accruing on the  principal  amount at the Bank's  prime rate plus 2.25%;  a
     general security  agreement dated September 8, 1997,  pursuant to which SMI
     Kingston has granted the Bank a security  interest in all of SMI Kingston's
     property.  As  additional  security,  SMI  Kingston  has executed a general
     assignment  of  accounts  receivable  in favour  of the  Bank,  dated as of
     September  8, 1997,  and has assigned  all risk  insurance  over all of its
     assets (except for assets under the capital leases)  indicating the Bank as
     first loss  payee;  additionally,  Soccer  Magic Inc.  has  guaranteed  SMI
     Kingston's  obligations  to the Bank  pursuant to an agreement  dated as of
     September 8, 1997. SMI has postponed and  subordinated all indebtedness and
     obligations  of SMI  Kingston to SMI in favor of the  security  held by the
     Bank in respect of SMI Kingston's  debt to the Bank. Each of Manny M. Gross
     and Brian B. Rattenbury has executed a limited personal  guarantee of SMI's
     indebtedness to the Bank under the loan agreement to a maximum of $62,500.

8.   Loan agreement  between SMI London and the Bank,  dated August 29, 1997, in
     respect  of a demand  loan of  $250,000,  repayable  in  monthly  principal
     payments plus interest,  with interest  accruing on the principal amount at
     the Bank's  prime  rate plus  2.25%;  a general  security  agreement  dated
     September  8, 1997,  pursuant  to which SMI London has  granted  the Bank a
     security interest in all of SMI London's property.  As additional security,
     SMI London has  executed a general  assignment  of accounts  receivable  in
     favour of the Bank,  dated as of  September  8, 1997,  and has assigned all
     risk  insurance over all of its assets (except for assets under the capital
     leases) indicating the Bank as first loss payee; additionally, Soccer Magic
     Inc. has  guaranteed  SMI London's  obligations  to the Bank pursuant to an
     agreement dated as of September 8, 1997. SMI has postponed and subordinated
     all  indebtedness  and  obligations  of SMI  London  to SMI in favor of the
     security held by the Bank in respect of SMI London's debt to the Bank. Each
     of Manny M. Gross and Brian B.  Rattenbury has executed a limited  personal
     guarantee of SMI's  indebtedness  to the Bank under the loan agreement to a
     maximum of $62,500.

                                       48


<PAGE>


                                  SCHEDULE 4.09
                              LICENSES AND PERMITS


None.

                                       49

<PAGE>


                                  SCHEDULE 4.10
                                   LITIGATION


By  statement  of claim dated  February  17,  1998,  Mican  Excavating  Inc. has
commenced an action in the Supreme Court of Ontario  (previously,  Ontario Court
(General  Division))  against  Soccer  Magic Inc.  and Carlton  Realty  (London)
Limited,  pursuant to the  Construction  Lien Act (Ontario),  for (I) the sum of
$54,275.36; or (II) all proper directions to be given that in default of payment
of the said $54,275.36 and costs by the defendants,  the lands municipally known
as 6 Cuddy Boulevard,  London, Ontario, be sold and the proceeds applied towards
payment of the plaintiff's claim and costs; and (III) pre-judgment  interest and
post-judgment  interest pursuant to the provisions of the Courts of Justice Act;
and (IV) its costs of the action on a solicitor and client  basis;  and (V) such
further and other relief as the nature of this case may require.

                                       50


<PAGE>


                                  SCHEDULE 4.11
                               INSURANCE POLICIES


Commercial/comprehensive

     CGU Group: Policy (binder) # 14601-50 Effective October 30, 1999 to October
30, 2000

Liability

     Elliott  Special  Risk:  Policy # 891496  Effective  September  16, 1999 to
September 16, 2000

                                       51

<PAGE>


                                  SCHEDULE 4.13
                               COMPLIANCE WITH LAW


1.   Federal and  Provincial  Corporate  Income Tax Returns  have not been filed
     since incorporation for Soccer Magic Inc. ("SMI"),  Soccer Magic (Kingston)
     Inc. ("SMI Kingston") and Soccer Magic (London) Inc. ("SMI London").

2.   Premiums  have not been paid  under  applicable  legislation  to  Workplace
     Safety and  Insurance  Board  ("WSIB") by any of SMI,  SMI  Kingston or SMI
     London; an estimated Cdn.$8,000 is owed to WSIB.


                                       52


<PAGE>


                                  SCHEDULE 4.14
                               SHAREHOLDERS OF SMI


         DATE                       NAME                          SHARES HELD
         ----                       ----                          -----------

1.       01/29/97          Gross, Manny                         3,385,500 Common

2.       01/29/97          Grunberg, Myron                        878,400 Common

3.       01/29/97          Grunberg, Marja                        878,400 Common

4.       01/29/97          Grunberg, Myron, in trust              805,200 Common
                           for:  Grunberg, Caroline

5.       01/29/97          Grunberg, Myron, in trust              823,500 Common
                           for:  Grunberg, Jared

6.       01/29/97          N.R. Holdings Limited                1,647,000 Common

7.       01/29/97          Buckley, John                          640,500 Common

8.       01/29/97          Buckley, Juanita                       640,500 Common

9.       01/29/97          Shefsky, Lynda                         640,500 Common

10.      01/29/97          Kagan, Marilyn                         640,500 Common

12.      07/21/99          B&M Shebib Investments                 890,270 Common
                           Limited

                                       53


<PAGE>


                                  SCHEDULE 4.15
                    MATTERS RELATING TO LABOR AND EMPLOYMENT


None.

                                       54



<PAGE>


                                  SCHEDULE 4.18
                           SUBSIDIARIES AND AFFILIATES


None.

                                       55

<PAGE>


                                  SCHEDULE 4.19
                               BANKING FACILITIES


HSBC Bank Canada
70 York Street
Toronto, Ontario
M5J 1S9

Bank of Nova Scotia
10 North Rivermede Road
Concord, Ontario
L2K 2H2

Canada Trust
7976 Yonge Street
Thornhill, Ontario
L3T 2C4

                                       56


<PAGE>


                                  SCHEDULE 4.21
                       INDEBTEDNESS TO AND FROM AFFILIATES


The following are balances owing to shareholders and related  corporations as at
August 31, 1999 (in Canadian dollars):

     Institutional Promotions of Canada Limited            $1,391,205
     Mr. Manny Gross                                         $813,113
     Mr. Brian Rattenbury                                     $90,000
     NR Holdings Limited                                      $80,050
     Lynda Shefsky                                            $75,000
     B&M Shebib Investments Limited                           $70,000
     Mr. Myron Grunberg                                       $14,110

                                       57


<PAGE>


                                  SCHEDULE 4.22
                           RELATED PARTY TRANSACTIONS


None.

                                       58


<PAGE>


                                  SCHEDULE 4.24
                        FINDER'S FEES AND BROKERAGE FEES


None.

                                       59

<PAGE>


                                  SCHEDULE 4.25
                                REQUIRED CONSENTS


None.

                                       60


<PAGE>


                                  SCHEDULE 5.10
                              AKI STOCKHOLDER LIST


Attached.

                                       61

<PAGE>


                                  SCHEDULE 5.14
          INDEBTEDNESS TO AND FROM OFFICERS, DIRECTORS AND STOCKHOLDERS


1.   See Item 12, "Certain  Relationships  and Related  Transactions,"  in AKI's
     annual  report on Form  10-K for the year  ended  August  31,  1999,  for a
     description of AKI's indebtedness under the Note and Security Agreement (as
     defined) to Buddy Young, who is the chairman,  chief executive  officer and
     chief financial officer and a principal  stockholder of AKI. As of November
     30, 1999,  AKI owed  principal and interest to Mr. Young under the Note and
     Security Agreement totaling $182,962.

                                       62