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                                                                   Exhibit 10.18

         THIS PURCHASE AGREEMENT MADE THIS 30TH DAY OF NOVEMBER, 2000 WITH
EFFECT AS OF THE 31ST DAY OF AUGUST, 2000.

AMONGST:

                             XBOX TECHNOLOGIES, INC.
                      a corporation incorporated under the
                          laws of the state of Delaware

                     (hereinafter called the "Corporation")

                                                              OF THE FIRST PART;

                                      -AND-

                         TECHINSPIRATIONS INC. (CAYMAN),
                           a Cayman Island corporation

                   (hereinafter referred to as the "Investor")

                                                             OF THE SECOND PART.

RECITALS:

1.       At a June 22nd, 2000 meeting of the Board of Directors of the
         Corporation, the Board of Directors (together with a representative of
         the Investor who is also on the Board of Directors of the Corporation)
         approved, in principle, management of the Corporation negotiating and
         implementing a business and financing plan for the Corporation (the
         "Plan") which included, amongst other matters, focusing the business
         and development operations of the Corporation on the business of its
         subsidiary, Knowledge Mechanics Inc., reorganizing the balance sheet
         and share capital of the Corporation to include revised employee stock
         option plans and the conversion of secured debt furnished by the
         Investor to the Corporation into equity of the Corporation, and
         pursuing additional equity investment in the Corporation;

2.       In furtherance of the implementation of the Plan, senior management of
         the Corporation, representatives of the Investor, and representatives
         of the subsidiary met in Toronto, Canada, on August 10, 2000 and,
         negotiated, agreed in principle and thereafter reduced to writing in a
         memorandum of understanding, various features of the Plan, subject to
         Board approval and legal documentation, including without limitation,
         the conversion of the Investor's secured loans to the Corporation into
         equity of the Corporation with effect as of the Effective Date (the
         "Debt Conversion");

3.       Those agreements in principle implementing the Plan were presented to
         and approved by the Board of Directors of the Corporation (subject to
         approval by a Special Committee of Independent Directors (the "Special
         Committee") at a September 7th, 2000 meeting of the Board of Directors
         of the Corporation, and the Board referred to such Special

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         Committee the particulars of the Debt Conversion and as a result of the
         foregoing, the Investor and the Board instructed their attorneys to
         prepare legal documentation implementing those decisions in accordance
         with the further directions to be provided by the Special Committee;

4.       At a meeting of the Special Committee on October 31, 2000, the Special
         Committee approved this Agreement and the conversion of certain of the
         indebtedness of the Company owed to TECH into shares of convertible
         preferred stock of the Company.

5.       In accordance with the debt conversion aspects of the foregoing, this
         Agreement sets out the terms and conditions whereby the Investor will
         purchase from the Corporation $14,025,137 of Series A Preferred Shares
         of the capital stock of the Corporation, at a purchase price of $16.80
         per share, each Series A Preferred Share convertible into such number
         of shares of common stock of the Corporation as is equal to $16.80
         divided by $0.084 (as such figure may be adjusted from time to time in
         accordance with the Certificate of Designation which created such
         Series A Preferred Shares), which initially results in each share of
         Series A Preferred being convertible into 200 shares of common stock,
         which purchase price shall be paid or satisfied, to the extent of
         $11,806,425.74 thereof, by the conversion of that amount of secured
         loan advances by the Investor to the Corporation as of the Effective
         Date into Series A Preferred Share equity with the balance of the
         purchase price to be paid or satisfied by the conversion of loans by
         the Investor subsequent to the Effective Date.


         NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the
premises and the mutual covenants hereinafter contained, the parties hereto
agree as follows:

                           ARTICLE 1 - INTERPRETATION

1.1      DEFINED TERMS

         Capitalized terms denoting defined terms used in this Agreement that
         are not defined in the recitals or body to this Agreement shall bear
         the meanings attributable to them in Schedule 1.1 to this Agreement.

1.2      CURRENCY

         All dollar amounts referred to in this Agreement are in the lawful
         currency of the United States of America ($US).

1.3      TIME

         Time shall be of the essence of this Agreement and of every part
         hereof.

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1.4      HEADINGS

         The division of this Agreement into sections, clauses and subclauses
         and the insertion of headings are for convenience of reference only and
         shall not affect the construction or interpretation hereof.

1.5      SCHEDULES

         The following are the Schedules attached to and incorporated in this
         Agreement by reference and deemed to be part hereof:

         SCHEDULE                     DESCRIPTION
         --------                     -----------

         1.1                          Definitions
         1.1(j)                       Closing Agenda
         1.1(q)                       Software Description
         1.9                          Series A Preferred Share attributes
         3.3                          Exceptions, if any, to Representations and
                                      Warranties
1.6      JURISDICTIONS

         This Agreement shall be construed in accordance with, and the rights of
         the parties hereto shall be governed by, the laws of the state of
         Minnesota. Each of the parties hereto hereby irrevocably attorns to the
         jurisdiction of the courts of the state of Minnesota.

1.7      CONSTRUCTION

         In this Agreement:

         (a)      words denoting the singular include the plural and vice versa
                  and words denoting any gender include all genders;

         (b)      the word "including" shall mean "including without
                  limitation";

         (c)      any reference to a statute shall mean the statute in force as
                  at the date hereof and any regulation in force thereunder,
                  unless otherwise expressly provided;

         (d)      the use of headings is for convenience of reference only and
                  shall not affect the construction of this Agreement;

         (e)      when calculating the period of time within which or following
                  which any act is to be done or step taken, the date which is
                  the reference day in calculating such period shall be
                  excluded. If the last day of such period is not a Business
                  Day, the period shall end on the next Business Day;

         (f)      any tender of documents under this Agreement may be made upon
                  the parties or their respective counsel; and

         (g)      words or abbreviations which have well known or trade meanings
                  are used herein in accordance with their recognized meanings.

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1.8      ACKNOWLEDGEMENT

         Each of the Parties hereto acknowledges and agrees that the recitals to
         this Agreement are true in substance and in fact and are incorporated
         into this Agreement.

1.9      PREFERRED SHARES

         Pursuant to authority granted in the articles of the Corporation, the
         directors have duly designated, authorized, and created, as of the date
         hereof, 1,000,000 Series A Preferred Shares convertible into Common
         Shares of the Corporation (the "Preferred Shares") which Preferred
         Shares have the attributes rights and privileges more particularly set
         out in the Certificate of Designation attached hereto as Schedule 1.9
         (the "Certificate").

             ARTICLE 2 - PURCHASE OF SHARES, FUNDAMENTAL AGREEMENTS

2.1      SUBSCRIPTION

         Subject to the terms and conditions hereof, the Investor hereby
         subscribes irrevocably for and agrees to purchase from the Corporation,
         and the Corporation agrees to issue to the Investor 834,830 Preferred
         Shares (the "Purchased Shares"). The subscription price (the "Share
         Purchase Price") for the Purchased Shares shall be $16.80 per share, or
         $14,025,137 in the aggregate.

2.2      PAYMENT AND ISSUANCE OF SHARES

         (a)      Payment of the Purchase Price shall be made at the Time of
                  Closing on the Closing Date and shall be made by the Investor
                  tabling its irrevocable direction to convert $11,806,425.74 of
                  the debt owed by the Corporation to the Investor as of the
                  Effective Date in part satisfaction of the Purchase Price
                  pursuant to the Conversion Agreement, dated the date hereof,
                  between the Corporation and the Investor and the balance of
                  the Purchase Price shall be satisfied in cleared funds by
                  advances from the Investor to the Corporation after the
                  Effective Date (the "Advances").

         (b)      The Purchased Shares shall be issued as follows: Such number
                  of Purchased Shares as is equal to $11,806,425.74 divided by
                  the Share Purchase Price shall be issued immediately upon the
                  execution of this Agreement with an effective issue date of
                  August 31, 2000 and the balance of the Purchased Shares (or
                  portion thereof) shall be issued from time to time after the
                  Effective Date at such time as the Investor requests that such
                  Advances be converted into Purchased Shares, provided that
                  such Advances shall automatically be converted into the
                  appropriate number of Purchased Shares at the end of each
                  calendar month following the Agreement Date in the event a
                  request for such conversion is not previously given by
                  Investor and provided further that the aggregate amount of
                  Advances to be converted into Purchase Shares shall be equal
                  to $2,218,711.26, with all such Advances being converted into
                  the number of Purchased Shares as is equal to the amount of
                  such Advances divided by the Share Purchase Price.

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2.3      REGISTRATION RIGHTS

         If the Corporation shall receive from the Investor at any time after
         the Closing Date, a written request that the Corporation effect any
         registration under the Securities Act of 1933, as amended (the
         "Securities Act") with respect to the Purchased Shares or the Common
         Stock underlying the Purchased Shares (provided that the Investor, if
         it is not already done so converts the Purchased Shares in respect of
         such underlying Common Stock for which registration is requested) then,
         with respect to such underlying Common Stock (collectively, the
         "Registrable Securities") the Corporation shall, as soon as a
         practical, use its commercially reasonable efforts to effect such
         registration in accordance with this Agreement (including, without
         limitation, the execution of an undertaking to file post-effective
         amendments, appropriate qualifications under applicable blue sky or
         other state securities laws, and appropriate compliance with applicable
         regulations issued under the Securities Act as may be so requested and
         as would permit or facilitate the sale and distribution of all such
         Registrable Securities as are specified in such request).
         Notwithstanding the foregoing, the Corporation shall not be obligated
         to effect, or take any action to effect, any such registration pursuant
         to this Section: if, upon receipt of a registration request pursuant to
         this Section, the Corporation is advised in writing (with a copy to the
         Investor) by a recognized regional or national independent investment
         banking firm selected by the Corporation that, in such firms opinion, a
         registration at the time and on the terms requested would adversely
         affect any public offering of securities of the Corporation by the
         Corporation with respect to which the Corporation has commenced
         preparation of a registration prior to the receipt of a registration
         request for the Investor pursuant to this Section, then the Corporation
         shall not be required to effect a registration pursuant to this Section
         until the earlier of (x) 30 days after the completion of the
         Corporation's offering, (y) promptly after abandoned meant of the
         Corporation's offering, or (z) 60 days after the date of receipt of a
         registration request by the Investor pursuant to this Section.

         The Investor may request registration from time to time hereunder in
         respect of any Common Stock underlying the Purchased Shares that have
         not previously been subject to a registration request, or that have
         been so subject to a registration request and for any reason were
         withdrawn from registration or were not distributed during the
         effectiveness of the relevant registration statement; provided however,
         that the Investor may not request registration pursuant to this
         Agreement more frequently than once every twelve (12) months. All
         registration expenses incurred in connection with any registration,
         qualification or compliance pursuant to this Agreement shall be borne
         by the Corporation.

2.4      UNDERWRITING

         If any registration request hereunder is to be conducted by an
         underwriter, the Investor and the Corporation shall enter into
         underwriting and related agreements in customary form with the
         representatives of the underwriter or underwriters selected for the
         underwriting of such distribution by the Investor and reasonably
         acceptable to the Corporation. Such underwriting agreement will contain
         such representations and warranties by the Corporation and such other
         terms and provisions as are customarily

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         contained in underwriting agreements with respect to secondary
         distributions, including without limitation, indemnities and
         contribution and the provision of opinions of counsel and accountants
         letters in accordance with customary practice. The said representations
         and warranties by, and the other agreements on the part of, the
         Corporation and such opinions and accountants letter to and for the
         benefit of such underwriters shall also be made to and for the benefit
         of the Investor. The Corporation shall cooperate fully with the
         Investor and the underwriters in connection with any underwritten
         offering. Notwithstanding any other provisions of this Agreement, if
         the representative of the underwriter advises the Investor in writing
         that market factors require a limitation on the number of the shares to
         be underwritten, the number of shares included in the registration by
         the Investor shall be reduced by such minimum number of shares as is
         necessary to comply with such request; and no Registrable Securities or
         any other securities excluded from the underwriting by reason of the
         underwriters marketing limitation shall be included in such
         registration.

2.5      REGISTRATION PROCEDURES

         The Corporation shall execute such further and other documents,
         instruments and agreements and shall do or cause to be done such
         further acts or things as made be necessary to give effect to the full
         nature and intent of section 2.3 and 2.4 hereof, and as may be
         necessary to keep the Investor and the underwriter fully informed (with
         copies of all relevant documents and drafts thereof) of the
         Corporation's progress on such registration request. In addition, and
         without limiting the foregoing, the Corporation will:

         (a)      Keep such registration effective for a period of three months,
                  or until the Investor has completed the distribution described
                  in the registration statement relating thereto, whichever
                  occurs first;

         (b)      Provide the underwriters and the Investor no less than five
                  business days to review and comment upon any registration
                  statement, prospectus, or supplemental documents prior to the
                  filing thereof and accommodate any reasonable comments
                  thereon;

         (c)      Make available at all reasonable times for inspection and
                  review by the Investor, any underwriter, and any attorney or
                  accountant retained by the Investor or any underwriter, all
                  financial and other records, pertinent corporate documents and
                  properties of the Corporation and any document relevant to the
                  registration and cause the officers, directors and employees
                  of the Corporation to supply all information reasonably
                  requested by the Investor, any such underwriter, attorney or
                  accountant in connection with such registration and whether
                  before or after the filing of the applicable registration
                  statement or the effectiveness of the applicable registration
                  statement;

         (d)      Use its commercially reasonable efforts to register or qualify
                  all Registrable Securities covered by such registration under
                  such other securities or blue sky laws of such states of the
                  United States of America where an exemption is not available
                  and as the sellers of Registrable Securities covered by such
                  registration

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                  shall reasonably request and to keep such registration or
                  qualification in effect for so long as the applicable
                  registration statement remains in effect;

         (e)      use its commercially reasonable efforts to obtain the
                  withdrawal of any order suspending the effectiveness of any
                  such registration, or the lifting of any suspension of the
                  qualification (or exemption from qualification) of any of the
                  Registrable Securities for sale in any jurisdiction;

         (f)      Use its commercially reasonable efforts to cause all
                  Registrable Securities included in any registration pursuant
                  hereto to be listed on each securities exchange on which
                  securities of the same class are then listed, or, if not then
                  listed on any securities exchange, to be eligible for trading
                  in any over-the-counter market or trading system in which the
                  Corporation's securities of the same class are then traded.

2.6      OTHER MATTERS

         In the event of any registration of shares of Common Stock pursuant to
         Section 2.3, the Corporation shall indemnify the Investor, its officers
         and directors and each person, if any, who controls such holder within
         the meaning of Section 15 of the Securities Act against all losses,
         claims, damages and liabilities caused by any untrue statement or
         alleged untrue statement of a material fact contained in any
         registration statement or prospectus (and as amended or supplemented)
         relating to such registration, or caused by any omission or alleged
         omission to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading in light of the
         circumstances under which they are made unless such statement or
         omission was made in reliance upon and in conformity with information
         furnished in writing to the Corporation by such holder expressly for
         use therein. The obligations of the Corporation to register any of its
         securities in accordance with the foregoing shall be subject to the
         condition that each holder shall agree in writing to indemnify the
         Corporation, its officers and directors, and each person, if any, who
         controls the Corporation within the meaning of Section 15 of the
         Securities Act, and each underwriter of the Registrable Securities so
         registered, and each person, if any, who controls such underwriter
         within the meaning of Section 15 of the Securities Act, with respect to
         losses, claims, damages and liabilities caused by any untrue statement
         or omission made in reliance upon and in conformity with information
         furnished in writing by such holder to the Corporation expressly for
         use in such registration statement or prospectus. The costs and
         expenses, if any, incurred by the Corporation in connection with any
         registration made pursuant to Section 2.3, including but not limited to
         legal fees, special audit fees, printing expenses, filing fees, fees
         and expenses relating to qualifications under state securities or blue
         sky laws and the premiums for insurance shall be borne entirely by the
         Corporation; provided, however, that the Investor shall bear its own
         underwriting discounts and commissions and the fees and expenses of its
         own counsel or accountants in connection with any such registration.
         The Investor, with respect to the distribution of Registrable
         Securities to be included in any registration, shall furnish to the
         Corporation such information regarding the Investor and the
         distribution proposed by such Investor as the Corporation may
         reasonably request in writing and as shall be reasonably required in
         connection with any registration,

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         qualification or compliance referred to in this Agreement.
         Notwithstanding any other provision contained in the sections 2.3, 2.4,
         2.5, or 2.6, if the board of directors of the Corporation determines in
         good faith that it is in the best interests of the Corporation not to
         disclose the existence of facts surrounding any proposed or pending
         acquisition, disposition, strategic alliance or financing transaction
         involving the Corporation, the Corporation may by notice to the
         Investor in writing postpone any registration request for such period
         of time that the Board of Directors may reasonably determined, but in
         no event fur a period exceeding 60 days.

2.7      AMENDMENT TO SHARE CAPITAL

         The parties acknowledge that as of the date of this Agreement, the
         Corporation does not have authorized common share capital sufficient to
         accommodate the conversion rights contained in the Preferred Shares,
         and the Purchased Shares subset thereof, and, accordingly, the
         Corporation must undertake such corporate proceedings, information
         circulars, SEC filings and approvals, shareholder approvals, and must
         do or cause to be done all such further acts and things (including,
         without limitation, the possible amendment to the par value of the
         Corporation's Common Stock) as the attorneys for the Corporation and
         the Investor advise are reasonably necessary in order to give full
         effect to the conversion rights contained in the Preferred Shares (the
         "Necessary Subsequent Proceedings"). The Investor hereby covenants to
         exercise all votes attached to all shares of the capital stock of the
         Corporation held by it in favor of the approval of the Necessary
         Subsequent Proceedings. Subject to the Investor's compliance with the
         foregoing, the Corporation hereby covenants and agrees with the
         Investor that the Corporation will forthwith after the Closing Date
         initiate, and thereafter diligently pursue, the full implementation of
         the Necessary Subsequent Proceedings on or before March 1st, 2001 (the
         "Outside Date"). If the Corporation does not fulfill the foregoing
         obligations by the Outside Date, the Investor shall have the right to
         elect, in its discretion and without obligation to do so, in
         substitution for any right or remedy it might otherwise have for the
         Corporation's failure to implement the Necessary Subsequent Proceedings
         by the Outside Date, to have the Corporation repurchase the Purchased
         Shares for the Share Purchase Price which obligation shall again become
         a secured interest bearing debt obligation of the Corporation to the
         Investor until fully paid and discharged.

            ARTICLE 3 - REPRESENTATIONS, WARRANTIES AND INDEMNITIES

3.1      THE INVESTOR'S REPRESENTATIONS AND WARRANTIES

         The Investor hereby represents and warrants to the Corporation that the
         following representations are true and correct at the Time of Closing.
         The Investor acknowledges and confirms that the Corporation is relying
         upon such representations and warranties in connection with the
         issuance of the Securities to the Investor and the completion of the
         transactions contemplated under the Agreement.


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                  GOOD STANDING

         (a)      The Investor is a Cayman Island corporation duly constituted
                  and validly subsisting under the laws of the Cayman Islands;

                  INVESTOR AUTHORITY

         (b)      The Investor has power and authority to enter into and perform
                  its obligations under this Agreement and all other Transaction
                  Documents executed and delivered by the Investor in
                  furtherance of the Closing of the transactions contemplated
                  under this Agreement including, without limitation, to
                  subscribe for the Securities in accordance with the terms of
                  this Agreement;

                  AGREEMENT BINDING

         (c)      Each of the Transaction Documents delivered by the Investor on
                  or before the Closing Date are, valid and legally binding
                  obligations of the Investor enforceable in accordance with
                  their respective terms except that: (i) the enforcement
                  thereof may be limited by bankruptcy, insolvency and other
                  laws effecting the enforcement of credits' rights generally,
                  (ii) rights of indemnity, contribution and waiver of
                  contribution thereunder may be limited under applicable law
                  and (iii) equitable remedies, including, without limitation,
                  specific performance and injunctive relief, may be granted
                  only in the discretion of a court of competent jurisdiction.
                  Neither the execution of this Agreement, or such other
                  Transaction Documents by the Investor, nor the performance by
                  the Investor of the various terms and provisions hereof and
                  thereof, will violate the trust instruments constituting the
                  Investor. The Investor is not a party to, subject to or bound
                  by any judgment, injunction or decree of any court or
                  government body that prevents the performance of this
                  Agreement, or any document referred to herein;

                  COMMISSIONS

         (d)      No commissions or brokerage or finders fees are payable by the
                  Corporation, through or on account of any acts of the Investor
                  or its representatives in connection with this Agreement or
                  the Closing Documents;

                  SECURITIES MATTERS

         (e)      The Investor:

                  (i)      is subscribing for the Securities to be issued to be
                           held for its own account not for the purpose of
                           distributing the same in specie to any beneficiary;

                  (ii)     has not been created, established, or formed solely
                           to acquire the Securities without a prospectus in
                           reliance on an exemption from the prospectus
                           requirements of applicable securities legislation;
                           and

                  (iii)    is resident in the Cayman Islands.

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         (f)      The Securities are being acquired for investment for the
                  Investor's own account and not with the view to, or for resale
                  in connection with, any distribution or public offering
                  thereof. The Investor understands that the Securities have not
                  been registered under the Securities Act, or any state
                  securities laws by reason of their contemplated issuance in
                  transactions exempt from the registration requirements of the
                  Securities Act and applicable state securities laws and that
                  the reliance of the Corporation and others upon these
                  exemptions is predicated in part upon this representation by
                  each Investor. The Investor further understands that the
                  Securities may not be transferred or resold without
                  registration under the Securities Act and any applicable state
                  securities laws, or an exemption from the requirements of the
                  Securities Act and applicable state securities laws.

         (g)      The Investor qualifies as an "accredited investor," as defined
                  in Rule 501 of Regulation D under the Securities Act. The
                  Investor acknowledges that the Corporation has made available
                  to each such Investor at a reasonable time prior to the
                  execution of this Agreement the opportunity to ask questions
                  and receive answers concerning the business, operations and
                  financial condition of the Corporation and the terms and
                  conditions of the sale of securities contemplated by this
                  Agreement and to obtain any additional information (which the
                  Corporation possesses or can acquire without unreasonable
                  effort or expense) as may be necessary to verify the accuracy
                  of information furnished to such Investor. The Investor is
                  able to bear the loss of its entire investment in the
                  Securities without any material adverse affect on its
                  business, operations or prospects, and has such knowledge and
                  experience of financial and business matters that it is
                  capable of evaluating the merits and risks of the investment
                  to be made by it pursuant to this Agreement.

3.2      SURVIVAL

         All statements contained in any Transaction Document, certificate or
         other instrument delivered by or on behalf of the Investor pursuant to
         or in connection with the transaction contemplated by this Agreement
         shall be deemed to be made by the Investor hereunder. The
         representations, warranties and covenants of the Investor contained or
         deemed to be contained in this Agreement, or in the other Transaction
         Documents shall survive the Closing of the subscription for, and issue
         of, and sale of the Securities, and notwithstanding such Closing, and
         regardless of any investigation by or on behalf of the Corporation with
         respect thereto, shall continue in full force and effect for the
         benefit of the Corporation for the Corporation's Period as defined
         hereafter. For these purposes, "Corporation's Period" means that period
         of time that obligations are explicitly expressed to survive in each
         particular Transaction Document, or failing any such explicit
         expression of survival, for the period of time starting from and
         including the Closing Date and thereafter forever in the case of the
         covenants herein or in the case of fraud and, otherwise with respect to
         representations and warranties to and excluding the third (3rd)
         anniversary of the Closing Date. After the expiration of the
         Corporation's Period, the Investor shall be released from all
         obligations and liabilities hereunder in respect of such
         representations, warranties and covenants except with respect to any
         claims made by the Corporation in writing prior to the expiration of
         the particular Corporation's Period (in

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         which event, liability shall survive until the final determination or
         settlement of such claims).

3.3      CORPORATION'S REPRESENTATIONS AND WARRANTIES

         Subject to the provisions of Section 7.2, the Corporation hereby
         jointly and severally represents, warrants and covenants to the
         Investor that, save and except as set out in Schedule 3.3 hereto, the
         following representations are true and correct at the Time of Closing.
         The Corporation acknowledges and confirms that the Investor is relying
         upon such representations, warranties and covenants, in connection with
         the subscription by the Investor for the Securities and the completion
         of the transactions contemplated under the Agreement.

                  GOOD STANDING

         (a)      The Corporation is a corporation:

                  (i)      duly incorporated and organized, validly subsisting
                           and in good standing under the laws of the state of
                           Delaware;

                  (ii)     duly authorized, qualified and licensed to own its
                           properties, and to carry on business as presently
                           owned and carried on by it; and

                  (iii)    having the power and authority and the right to enter
                           into and perform its obligations, if applicable,
                           under this Agreement and all other Transaction
                           Documents executed and delivered by such Company in
                           furtherance of the Closing of the transactions
                           contemplated under this Agreement including, without
                           limitation, to issue the Securities in accordance
                           with the terms of this Agreement.

                  CORPORATE AUTHORITY

         (b)      The execution and delivery of the Transaction Documents
                  including, without limitation, this Agreement and the
                  performance by the Corporation, of the transactions
                  contemplated by the Transaction Documents have been duly
                  authorized by all necessary corporate action of the
                  Corporation and by all other necessary corporate proceedings;

                  GUARANTEES AND UNDISCLOSED LIABILITIES

         (c)      The Corporation is not a party to nor bound by any agreement
                  of guarantee, indemnification, assumption or endorsement (or
                  any other like commitment) of the obligations, liabilities,
                  contingent or otherwise, or indebtedness of any other person,
                  firm or corporation, nor is the Corporation subject to any
                  liabilities save and except those disclosed in the SEC
                  Reports, except if incurred since May 31, 2000 to the date
                  hereof in the ordinary course of business consistent with past
                  experience;

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                  AGREEMENT BINDING

         (d)      Each of the Transaction Documents delivered by the
                  Corporation, are valid and legally binding obligations of the
                  Corporation, enforceable in accordance with their respective
                  terms except that: (i) the enforcement thereof may be limited
                  by bankruptcy, insolvency and other laws effecting the
                  enforcement of credits' rights generally, (ii) rights of
                  indemnity, contribution and waiver of contribution thereunder
                  may be limited under applicable law and (iii) equitable
                  remedies, including, without limitation, specific performance
                  and injunctive relief, may be granted only in the discretion
                  of a court of competent jurisdiction. Neither the execution of
                  this Agreement, or such other Transaction Documents by the
                  Corporation nor the performance by the Corporation of the
                  various terms and provisions hereof and thereof will violate
                  the articles of incorporation or other charter documents of
                  the Corporation. The Corporation is not a party to, subject to
                  or bound by any judgment, injunction or decree of any court or
                  governmental body that prevents the performance of this
                  Agreement, or any document referred to herein;

                  CONSENTS

         (e)      All Regulatory Approvals and all necessary consents or
                  approvals of any person or entity under any material contract
                  pertaining to each the Corporation or its assets or under any
                  regulatory authority having jurisdiction for the transactions
                  contemplated by the Transaction Documents have been obtained
                  by the Closing Date;

                  ADVERSE INFORMATION/EVENTS AND SEC REPORTS

         (f)      Other than the cessation of operations of Fullmetrics, Inc.,
                  the Corporation has no information nor knowledge of any facts
                  specific to its business or the Securities and not of general
                  knowledge that have not been disclosed to the Investor which,
                  if known to the Investor, might reasonably be expected to
                  deter an investor from completing the transaction herein. None
                  of the information or documents furnished by the Corporation
                  or the employees or agents of the Corporation, prior to the
                  date hereof to the Agent or the Investor in furtherance of the
                  Transaction Documents or in conjunction with this Agreement is
                  false, misleading or inaccurate in any material respect or
                  omits to state a material fact necessary in order to make any
                  of the statements therein not misleading. The Corporation has
                  previously furnished or made available to the Investor true
                  and complete copies of (i) its Annual Report on Form 10-KSB
                  for the fiscal year ended August 31, 1999, (ii) its quarterly
                  reports on Form 10-QSB filed since the fiscal year end for its
                  most recently filed Annual Report on Form 10-KSB was filed,
                  and (iii) its Proxy Statement relating to its most recent
                  Annual Meeting of Stockholders (collectively, the "SEC
                  Reports"). As of their respective dates, the SEC Reports (x)
                  complied as to form in all material respects with the
                  applicable requirements of the Securities Act and the rules
                  and regulations thereunder and the Securities Exchange Act of
                  1934, as amended, and the rules and regulations thereunder, as

                                       12
<PAGE>   13

                  the case may be, and (y) did not contain any untrue statement
                  of a material fact or omit to state a material fact required
                  to be stated therein or necessary to make the statements
                  therein, in the light of the circumstances under which they
                  were made, not misleading;

                  TRANSACTION COMPLIANCE

         (g)      The entering into of the Transaction Documents by the
                  Corporation, and the completion of the transactions
                  contemplated thereby do not result in the violation of any of
                  the terms and provisions of any indenture or other agreement,
                  written or oral, to which the Corporation may be a party, or,
                  of any applicable federal or state law or regulation;

                  LITIGATION

         (h)      Except as set forth in Schedule 3.3 or in the SEC Reports,
                  there are no actions, suits, arbitrations, or proceedings
                  pending or to the Corporation's knowledge threatened against,
                  by, or affecting the Securities, the business of the
                  Corporation, or the Corporation at law or in equity, or before
                  or by any federal, provincial, municipal or other governmental
                  department, commission, board, bureau, agency or
                  instrumentality, domestic or foreign, which action, suit or
                  proceeding involves the possibility of any judgment against or
                  liability of the Corporation or the Investor, which would have
                  a material adverse effect on the Corporation. The Corporation
                  is not aware of any existing ground on which any such action,
                  claim, or proceeding may be commenced with any reasonable
                  likelihood of success which would produce a material adverse
                  effect;

                  RESIDENCY

         (i)      The Corporation is domiciled in the United States of America
                  for purposes of the Internal Revenue Code of 1986, as amended
                  ("IRS Code");

                  CAPITAL

         (j)      The authorized capital of the Corporation consists of
                  75,000,000 shares of common stock, par value $.10 per share,
                  1,000,000 shares of Series A Convertible Preferred Stock, par
                  value $.10 per share, and 4,000,000 shares of undesignated
                  stock, par value $.10 per share. The SEC Reports sets out the
                  names of all persons who are registered owners of issued and
                  outstanding shares or rights to shares in the capital stock of
                  the Corporation holding 10% or more of the shares and rights
                  to shares of that class together with the number of such
                  shares or rights to shares held by that person and, on a fully
                  diluted basis, the number of shares and rights to shares of
                  each class of stock that are currently issued and outstanding.

                                       13
<PAGE>   14

                  LICENSES

         (k)      The Corporation possess all material certificates, authority,
                  permits or licenses issued by the appropriate state,
                  provincial, municipal or federal regulatory agencies or bodies
                  necessary to conduct the business now operated by it and the
                  Corporation has not received any notice of proceedings
                  relating to the revocation or modification of any such
                  certificate, authority, permit or license which, if the
                  subject of an unfavourable decision, ruling or finding would
                  materially and adversely affect the conduct of the business,
                  operations, financial condition or income of the Corporation;

                  OPTIONS

         (l)      The Corporation is not a party to nor has granted any
                  agreement, warrant or right or privilege capable of becoming
                  an agreement, for the purchase, subscription or issuance of
                  any of the common shares or any other class of shares in the
                  capital stock of the Corporation, or securities convertible
                  into or exchangeable for such shares, other than as described
                  in the SEC Reports or pursuant to its 1995 Amended & Restated
                  Stock Incentive Plan;

                  FINANCIAL STATEMENTS/TITLE TO ASSETS

         (m)      The financial statements of the Corporation included in the
                  SEC Reports present fairly, in all material respects, the
                  financial position of the Corporation as of the periods set
                  out therein in accordance with generally accepted United
                  States accounting principles applied on a consistent basis.
                  The Corporation owns all of its assets recorded as assets on
                  the said financial statements with a full and complete legal
                  and beneficial title thereto free and clear of all liens,
                  claims, or encumbrances save and except as more particularly
                  referred to in the aforesaid financial statements or otherwise
                  disclosed in the SEC Reports or as may have subsequently been
                  disposed of for fair value in the ordinary course of business;

                  COMMISSIONS

         (n)      No commissions, brokerage, or finders fees are payable by the
                  Corporation or the Investor through or on account of any acts
                  of the Corporation, it's shareholders, or it's representatives
                  in connection with this Agreement or the Closing Documents;

                  CEASE TRADING

         (o)      No order ceasing or suspending trading in securities of the
                  Corporation or prohibiting the sale of securities by the
                  Corporation has been issued and no proceedings for this
                  purpose have been instituted, are pending, contemplated or
                  threatened;

                  DIVIDENDS

         (p)      Since May 31, 2000, the Corporation has not, directly or
                  indirectly, declared or paid any dividend or declared or made
                  any other distribution on any of its shares or securities of
                  any class, or, directly or indirectly, redeemed, purchased or

                                       14
<PAGE>   15

                  otherwise acquired any of its shares or securities or agreed
                  to do any of the foregoing;

                  SOFTWARE AND INTELLECTUAL PROPERTY

         (q)      Schedule 3.3(q) annexed hereto contains a description of the
                  software components that constitutes the Corporation's
                  principle product and services lines (the "KSI System").
                  Except as disclosed in Schedules 3.3(m) or 3.3(q), the
                  Corporation has the ultimate right to use, free and clear of
                  any liens, all trade secrets, copyrights, intellectual
                  property, source and object code, documentation, and all other
                  intellectual property that constitutes the KSI System or is
                  furnished by the Corporation to its clients as ancillary to
                  the use of the KSI System. To the best of its knowledge, the
                  Corporation is not using or in any way making use of any
                  confidential information or trade secrets, copyrights, trade
                  marks, or other intellectual property of any third party that
                  is material to the KSI System or the business of the
                  Corporation which is not under a subsisting right or license
                  in good standing granted by such third party to the
                  Corporation, and no claim has been asserted by any person to
                  the contrary effect. The KSI System to date has been
                  developed, coded, structured, and documented in accordance
                  with the standard of care of professional software developers
                  and in accordance with current technical standards. The KSI
                  System that has been supplied to customers of the Corporation
                  up to the date hereof has operated, and hereafter will
                  continue to operate, in accordance with the descriptions,
                  documentation, and specifications pertaining thereto supplied
                  to such customers without any abnormal abends or aborts or
                  invalid or incorrect results or degradation of performance;
                  save and except as experienced within customer expectations
                  and within acceptable industry experience for well developed
                  software and, with respect to future experience with such
                  installed KSI System, at frequency and severity levels no
                  greater than experienced by the Corporation with respect to
                  the KSI System to the date hereof.

         (r)      To the best of the knowledge of the Corporation, the computer
                  systems, including hardware and software used internally in
                  the business of the Corporation, are free from significant
                  viruses and disabling devices, and the Corporation has taken,
                  and shall continue to take, all steps and implement all
                  procedures necessary to ensure, so far as reasonably possible,
                  that such systems are free from viruses and disabling devices
                  and will remain so.

                  SECURITIES

         (s)      Upon receipt of the Purchase Price for the Securities, the
                  Purchased Shares shall be at the Time of Closing duly and
                  validly issued, as fully paid and non-assessable securities of
                  the Corporation. Subject to the implementation of the
                  Necessary Subsequent Proceedings, the Common Stock underlying
                  the Purchased Shares shall, upon exercise of the conversion
                  rights in the Purchased Shares in accordance with the terms of
                  the Certificate and this Agreement, and without

                                       15
<PAGE>   16

                  further payment by the holder, be duly and validly issued, as
                  fully paid and non-assessable Common Shares of the capital
                  stock of the Corporation.

         (t)      The issue and delivery of the Securities to the Investor on
                  the Closing Date or upon conversion of the Purchased Shares,
                  as applicable, shall be made in compliance with all applicable
                  securities laws pertaining to the Corporation or the issue of
                  the Securities and, subject to implementation of the Necessary
                  Subsequent Proceedings, such issue shall be exempt from any
                  requirement respecting the filing of a prospectus or
                  registration statement and no rulings, orders, consents or
                  approvals required to permit the sale of the Securities to the
                  Investor under such securities legislation are required.

         (u)      One year after the date of issuance of the Purchased Shares,
                  the Common Shares issuable upon conversion of the Purchased
                  Shares may be resold pursuant to Rule 144 under the Securities
                  Act, as currently in effect, subject to the volume limitations
                  set forth therein and provided that (x) the Corporation's
                  Common Stock continues to be registered pursuant to Section 12
                  of the Securities and Exchange Act of 1934, as amended (the
                  "Exchange Act") and (y) the Corporation has filed all reports
                  required to be filed under Section 13 or 15(d) of the Exchange
                  Act during the one-year period prior to any resale of
                  Purchased Common Shares.

                  CONTRACTS AND CLIENT RELATIONS

         (v)      A true and complete list of all material contracts (the
                  "Contracts") in effect to which the Corporation is a party
                  have been filed as Exhibits to the SEC Reports and the
                  Corporation has prior to the date hereof provided the Investor
                  with true and complete copies of all such Contracts. All
                  Contracts have been duly authorized and delivered by the
                  Corporation, are in full force and effect against the
                  Corporation and constitute the valid and binding obligations
                  of the Corporation and, to the best of the Corporation's
                  knowledge, the other parties thereto, enforceable in
                  accordance with their respective terms. As to the Contracts,
                  (i) there are no existing breaches or defaults by the
                  Corporation thereunder or, to the knowledge of the Corporation
                  by the other parties to such Contracts, (ii) no event, act or
                  omission has occurred or, as the result of the consummation of
                  the transactions contemplated hereby will occur which (with or
                  without notice, lapse of time or the happening or occurrence
                  of any other event) would result in a default by the
                  Corporation or give cause for termination thereof, provided
                  that insofar as the foregoing representation involves the
                  actions or omissions of parties other than the Corporation it
                  shall be limited to the expressed terms of the Contracts
                  together with the knowledge of the Corporation and (iii) none
                  of the parties to such Contracts have expressed an indication
                  to the Corporation of their intention to cancel, renegotiate
                  or exercise or not exercise any right under such Contracts.

                                       16
<PAGE>   17

                  RELATED TRANSACTIONS

         (w)      Except as disclosed in the SEC Reports no current or former
                  shareholder, director or officer or employee of the
                  Corporation or any Associate of any such person is presently,
                  directly or indirectly, through his or its affiliation with
                  any other person or entity, party to any transaction with the
                  Corporation providing for the furnishing of services (other
                  than employment of such individuals by the Corporation), or
                  products by or to, or rental of real or personal property from
                  or to, or otherwise requiring cash payments to or by, any such
                  persons that would be required to be disclosed in the SEC
                  Reports).

                  SUBSIDIARIES AND INDIRECT INVESTMENTS

         (x)      The Corporation has no subsidiaries, or other indirect
                  investments, except for Fullmetrics, Inc. and Knowledge
                  Mechanics, Inc.

3.4      SURVIVAL OF CORPORATION'S REPRESENTATIONS

         All statements contained in any Transaction Document, certificate or
         other instrument delivered by or on behalf of the Corporation pursuant
         to or in connection with the transaction contemplated by this Agreement
         shall be deemed to be made by the Corporation hereunder. The
         representations, warranties and covenants of the Corporation contained
         or deemed to be contained in this Agreement or in the other Transaction
         Documents, shall survive the Closing of the subscription for, and issue
         of, the Securities, and notwithstanding such Closing, and regardless of
         any investigation by or on behalf of the Investor with respect thereto,
         shall continue in full force and effect for the benefit of the Investor
         for the Investor's Period as defined hereafter. For these purposes,
         "Investor's Period" means that period of time that obligations are
         explicitly expressed to survive in each particular Transaction
         Document, or failing any such explicit expression of survival, for the
         period of time starting from and including the Closing Date and
         thereafter forever in the case of the covenants herein or in the case
         of fraud or in respect of matters pertaining to the shares set out in
         subsection 3.3(s) hereof, and otherwise with respect to representations
         and warranties, to and including the date of expiration of potential
         liability under the IRS Code in respect of liability thereunder, and in
         all other cases, to and excluding the third (3rd) anniversary of the
         Closing Date. After the expiration of the Investor's Period, the
         Corporation shall be released from all obligations and liabilities
         hereunder in respect of such representations, warranties and covenants
         except with respect to any claims made by the Investor in writing prior
         to the expiration of the particular Investor's Period (in which event,
         liability shall survive until the final determination or settlement of
         such claims).

                        ARTICLE 4 - CLOSING ARRANGEMENTS

4.1      PLACE OF CLOSING

         The parties will use all reasonable best efforts to avoid a formal
         closing requiring personal attendance in one place at the same time.
         Instead, the parties will use all reasonable efforts to effect closing
         procedures through escrow of documents at Brien G. McKenna, Barrister &
         Solicitor, Toronto, and through Oppenheimer, Wolff & Donnelly LLP,

                                       17
<PAGE>   18

         Minnesota, in accordance with procedures agreed between those two law
         firms. In the event that a formal closing is required with the
         attendance of parties, such closing will take place at the Time of
         Closing at the offices of:

         Oppenheimer, Wolff & Donnelly LLP
         Attorneys Plaza VII
         45 South Seventh Street
         Suite 3400
         Minneapolis MN  55402-1609

         The time and place for any such closing may be amended by agreement
         between the parties hereto.

4.2      TENDER

         Any tender of documents or money under this Agreement may be made upon
         the parties or their respective counsel and money may be tendered by
         official bank draft drawn upon a USA chartered bank or by negotiable
         cheque payable in USA funds and certified by a Canadian chartered bank
         or trust company.

4.3      CLOSING PROCEDURES FOR SECURITIES

         (a)      Without limiting the other matters to be deduced at the Time
                  of Closing, at the Time of Closing, the Corporation shall
                  deliver to the Investor:

                  (i)      a certificate representing the Securities subscribed
                           for herein duly registered in the name of the
                           Investor; and

                  (ii)     the requisite legal opinion and certificates and
                           other conditions of closing as contemplated in the
                           agenda tabled at Closing;

         (b)      Without limiting the other matters to de deduced at the Time
                  of Closing, at the Time of Closing, the Investor shall deliver
                  to the Corporation:

                  (i)      an irrevocable direction to convert to equity a
                           portion of the Debt owed by the Corporation to the
                           Investor that is equal to the Purchase Price;

                  (ii)     the requisite certificates and other conditions of
                           closing as contemplated in the agenda delivered at
                           Closing.

                ARTICLE 5 - COVENANTS OF THE PARTIES RE CLOSING

5.1      APPROVALS AND CONSENTS

         Prior to the Closing Date, each of the Corporation and Investor have
         obtained all necessary consents of all other third parties, and shall
         after the Closing Date comply with any conditions thereof, which are
         required in connection with the completion of any of the transactions
         contemplated by this Agreement, the execution of this Agreement or the

                                       18
<PAGE>   19

         Closing, or the performance of any of the terms and conditions hereof,
         provided that the Investor shall not be obliged to comply with any such
         conditions unless the same have been disclosed to and accepted by the
         Investor prior to Closing. To the extent that a necessary consent to
         this transaction is to be obtained by the Investor, the Corporation
         shall not be obliged to comply with any conditions of such consent
         unless, prior to Closing, such conditions have been disclosed to and
         accepted by the person(s) from whom compliance is required.

5.2      NATURE OF COVENANTS

         The covenants of the Corporation and the Investor, as the case may be,
         set forth in this Agreement shall survive the Closing and,
         notwithstanding the Closing, shall continue in full force and effect
         for the benefit of the Investor and the Corporation, as the case may
         be.

5.3      COVENANTS OF THE CORPORATION

         The Corporation hereby covenants to and with the Investor that it will:

         (a)      fulfil all legal requirements to permit the issuance and
                  offering of the Securities as contemplated in this Agreement
                  including, without limitation, compliance with all applicable
                  securities laws and regulations to enable the same to be
                  offered for subscription and issued without the necessity of
                  filing a prospectus or registration statement;

         (b)      obtain the necessary regulatory consents to the issue of the
                  Securities, if any; and

         (c)      within the time periods prescribed by law, after the Closing
                  Date (as herein defined), file such documents as may be
                  required under the applicable securities laws relating to the
                  private placement of the Securities, if applicable.

                        ARTICLE 6 - SIMULTANEOUS CLOSING

6.1      SIGN AND CLOSE

         This Agreement has been executed and delivered coincidentally with the
         closing of the transactions contemplated hereunder.

                          ARTICLE 7 - INDEMNIFICATIONS

7.1      INDEMNIFICATION BY INVESTOR

         The Investor hereby agrees to indemnify and save harmless the
         Corporation from and against all manner of debts, losses, demands,
         claims, actions, causes of action, damage, liabilities, costs, expenses
         or penalties whatsoever and howsoever arising (collectively, the
         "Corporation's Damages") incurred by the Corporation at any time
         hereafter, whether directly, or indirectly, that are existing, arising,
         accruing, incurred or outstanding as at the

                                       19
<PAGE>   20

         Time of Closing on the Closing Date, or that arise thereafter in
         respect of transactions to and including the Time of Closing of the
         Closing Date and that are:

         (a)      Attributable to the breach or incorrectness of any and each
                  representations, warranties or covenants given in this
                  Agreement or that are given in any of the Transaction
                  Documents in favour of the Corporation;

         (b)      All reasonable costs and expenses of the Corporation in
                  pursuing its remedies under this Agreement, including
                  reasonable legal fees and expenses on a solicitor and client
                  basis; and

         (c)      Interest on all of the amounts aforesaid at the pre-judgment
                  and post-judgment interest rates allowed by courts of
                  competent jurisdiction in the state of Delaware;

         provided however, that notice of such claim for indemnity is given by
         the Corporation to the Investor during the Corporation's Period. The
         indemnities given in this Section 7.1 are separate and distinct from
         any indemnities given by, or any obligations of, the Investor in any
         other Transaction Document and shall not merge with, or be in
         substitution for, any such indemnities or obligations, all of which are
         hereby expressed to be separately enforceable covenants. The foregoing
         liability of the Investor shall not arise or be effective, except in
         the case of fraud, until the aggregate amount of all liability claims
         hereunder exceeds $25,000.00 at which time the Investor shall be liable
         for all such liability claims including the first $25,000.00 thereof.

7.2      INDEMNIFICATION BY CORPORATION

         The Corporation hereby agrees to indemnify and save harmless the
         Investor from and against all manner of debts, losses, demands, claims,
         actions, causes of action, damage, liabilities, costs, expenses, or
         penalties, whatsoever and howsoever arising (collectively, the
         "Investor's Damages"), incurred by the Investor at any time hereafter,
         whether directly, or indirectly, or through the diminished value of the
         Securities, that are existing, arising, accruing, incurred or
         outstanding as of the Time of Closing on the Closing Date, or that
         arise thereafter in respect of transactions to and including the Time
         of Closing on the Closing Date and that are:

         (a)      Attributable to the breach or incorrectness of any and each of
                  the representations, warranties or covenants in this Agreement
                  or that are given in any of the Transaction Documents in
                  favour of the Investor;

         (b)      All reasonable costs and expenses of the Investor in pursuing
                  its remedies under this Agreement, including reasonable legal
                  fees and expenses on a solicitor and client basis; and

         (c)      Interest on all of the amounts aforesaid at the pre-judgment
                  and post-judgment interest rates allowed by courts of
                  competent jurisdiction in the state of Minnesota;

                                       20
<PAGE>   21

         provided, however, that notice of such claim for indemnity is given by
         the Investor to the Corporation during the Investor's Period. The
         indemnities given in this Section 7.2 are separate and distinct from
         any indemnities given by, or any obligations of, the Corporation in any
         other Transaction Document and shall not merge with, or be in
         substitution for, any such indemnities or obligations, all of which are
         hereby expressed to be separately enforceable covenants. The foregoing
         liability of the Corporation shall not arise or be effective, except in
         the case of fraud, until the aggregate amount of all liability claims
         hereunder exceeds $25,000.00 at which time the Corporation shall be
         liable for all such liability claims including the first $25,000.00
         thereof.

7.3      PROCEDURE FOR INDEMNIFICATION

         (a)      CLAIMS OTHER THAN THIRD PARTY CLAIMS. Following receipt from
                  the Corporation or the Investor, as the case may be (the
                  "Indemnified Party"), of a written notice of a claim for
                  indemnification which has not arisen in respect of a Third
                  Party Claim (as defined in Section 7.3(b) below), the party
                  who is in receipt of such notice (the "Indemnifying Party")
                  shall have 30 days to make such investigation of the claim as
                  the Indemnifying Party considers necessary or desirable. For
                  the purpose of such investigation, the Indemnified Party shall
                  make available to the Indemnifying Party the information
                  relied upon by the Indemnified Party to substantiate the
                  claim. If the Indemnified Party and the Indemnifying Party
                  agree at or prior to the expiration of such 30 day period (or
                  any mutually agreed upon extension thereof) to the validity
                  and amount of the claim, the Indemnifying Party shall
                  immediately pay to the Indemnified Party the full agreed upon
                  amount of the claim. If the Indemnified Party and the
                  Indemnifying Party do not agree within such period (or any
                  mutually agreed upon extension thereof), such dispute shall be
                  resolved by an action in a court of law.

         (b)      THIRD PARTY CLAIMS. The Indemnified Party shall notify the
                  Indemnifying Party in writing as soon as is reasonably
                  practicable after being informed in writing that facts exist
                  which may result in a claim originating from a Person other
                  than the Indemnified Party (a "Third Party Claim") and in
                  respect of which a right of indemnification given pursuant to
                  Section 7.1 or 7.2 may apply. The Indemnifying Party shall
                  have the right to elect, by written notice delivered to the
                  Indemnified Party within 10 days of receipt by the
                  Indemnifying Party of the notice from the Indemnified Party in
                  respect of the Third Party Claim, at the sole expense of the
                  Indemnifying Party, to participate in or assume control of the
                  negotiation, settlement or defense of the Third Party Claim,
                  provided that:

                  (i)      such will be done at all times in a diligent and bona
                           fide matter;

                  (ii)     the Indemnifying Party acknowledges in writing its
                           obligation to defend the Indemnified Party in
                           accordance with the terms contained in this Agreement
                           in respect of that Third Party Claim; and

                                       21
<PAGE>   22

                  (iii)    the Indemnifying Party shall pay all reasonable
                           out-of-pocket expenses incurred by, the Indemnified
                           Party as a result of such participation or
                           assumption.

         If the Indemnifying Party elects to assume such control, the
         Indemnified Party shall cooperate with the Indemnifying Party and its
         counsel and shall have the right to participate in the negotiation,
         settlement or defense of such Third Party Claim at its own expense. If
         the Indemnifying Party does not so elect or, having elected to assume
         such control, thereafter fails to proceed with the settlement or
         defense of any such Third Party Claim, the Indemnified Party shall be
         entitled to assume such control. In such case, the Indemnifying Party
         shall cooperate where necessary with the Indemnified Party and its
         counsel in connection with such Third Party Claim and the Indemnifying
         Party shall be bound by the results obtained by the Indemnified Party
         with respect to such Third Party Claim.

7.4      ADDITIONAL RULES AND PROCEDURES

         The obligation of the parties to indemnify each other pursuant to this
         Article 7 shall also be subject to the following:

         (a)      an Indemnified Party shall only be entitled to make a claim
                  for indemnification pursuant to Section 7.1 or 7.2, as the
                  case be, if written notice containing reasonable particulars
                  of such claim is delivered to the Indemnifying Party within
                  the time periods provided for in Section 3.2 or 3.4, as the
                  case may be;

         (b)      if any Third Party Claim is of a nature such that the
                  Indemnified Party is required by applicable law to make a
                  payment to any Person (a "Third Party") with respect to such
                  Third Party Claim before the completion of settlement
                  negotiations or related legal proceedings, the Indemnified
                  Party may make such payment and the Indemnifying Parry shall,
                  forthwith after demand by the Indemnified Party, reimburse the
                  Indemnified Party for any such payment. If the amount of any
                  liability under the Third Party Claim in respect of which such
                  a payment was made, as finally determined, is less than the
                  amount which was paid by the Indemnifying Party to the
                  Indemnified Party, the Indemnified Party shall, forthwith
                  after receipt of the difference from the Third Party, pay such
                  difference to the Indemnifying Party;

         (c)      except in the circumstances contemplated by subsection 7.4(b)
                  above, and whether or not the Indemnifying Party assumes
                  control of the negotiation, settlement or defense of any Third
                  Party Claim, the Indemnified Party shall not settle or
                  compromise any Third Party Claim except with the prior written
                  consent of the Indemnifying Party;

         (d)      the Indemnifying Party and the Indemnified Party shall provide
                  each other on an ongoing basis with all information which may
                  be relevant to the other's liability relating to a Third Party
                  Claim hereunder and shall supply copies of all relevant
                  documentation promptly as they become available; and

                                       22
<PAGE>   23

         (e)      notwithstanding subsection 7.4(c), the Indemnifying Party
                  shall not settle any Third Party Claim or conduct any related
                  legal or administrative proceeding in a manner which would, in
                  the opinion of the Indemnified Party, acting reasonably, have
                  a material adverse impact on the Indemnified Party.

7.5      RIGHTS CUMULATIVE

         The rights of indemnification contained in this Article 7 are
         cumulative and are in addition to every other right or remedy of the
         parties contained in this Agreement or otherwise.

                              ARTICLE 8 - GENERAL

8.1      NON-MERGER

         Each party hereby agrees that all provisions of this Agreement shall
         not merge on the Closing of the transactions contemplated in this
         Agreement and shall, thereafter, survive for the periods of time
         expressly set out in this Agreement and if such survival is not limited
         in time shall, subject to applicable limitation periods otherwise
         imposed by law, forever survive the execution and delivery of this
         Agreement until fully fulfilled or performed.

8.2      EXPENSES

         Except as set out hereafter, each of the parties hereto shall bear all
         expenses incurred by it in connection with this Agreement including,
         without limitation, the charges of their respective, accountants and
         financial advisors. Notwithstanding the foregoing however, the
         Corporation shall bear the reasonable legal and accounting fees
         incurred by the Investor in connection with its due diligence and the
         drafting and legal review of the transactions, agreements and documents
         contemplated by and directly relating to the transactions contemplated
         herein.

         Such amounts payable by the Corporation accruing to, or known by, the
         Time of Closing shall be paid by the Corporation at the Time of
         Closing.

8.3      FURTHER ASSURANCES

         The parties shall do all such things and provide all such reasonable
         assurances as may be required to consummate the transactions
         contemplated hereby, and each party shall provide such further
         documents or instruments required by any other party as may be
         reasonably necessary or desirable to effect the purpose of this
         Agreement and carry out its provisions, whether before or after the
         closing.

8.4      BENEFIT OF THE AGREEMENT

         This Agreement shall inure to the benefit of and be binding upon the
         respective heirs, executors, administrators, successors and permitted
         assigns of the parties.

                                       23
<PAGE>   24

8.5      ENTIRE AGREEMENT

         With respect to the subject matter of the Transaction Documents, the
         Transaction Documents (a) set forth the entire agreement between the
         parties and any persons who have in the past or who are now
         representing any of the parties, (b) supersedes all prior
         understandings and communications between the parties or any of them,
         oral or written, express or implied including the Letter of Intent, and
         (c) constitutes the entire agreement between the parties. Each party
         acknowledges that it shall have no right to rely upon any amendment,
         promise, modification, statement or representation made or occurring
         subsequent to the execution of this Agreement unless the same is in
         writing and executed by the parties hereto.

8.6      WAIVER

         The failure of any party to enforce at any time any of the provisions
         of this Agreement or any of its rights in respect thereto or to insist
         upon strict adherence to any term of this Agreement shall not be
         considered to be a waiver of such provision, right or term or in any
         way to affect the validity of this Agreement or deprive the applicable
         party of the right thereafter to insist upon strict adherence to that
         term or any other term of this Agreement. The exercise by any party of
         any of its rights provided by this Agreement shall not preclude or
         prejudice such party from exercising any other right it may have under
         this Agreement, irrespective of any previous action or proceeding taken
         by it hereunder. Any waiver by any party of the performance of any of
         the provisions of this Agreement shall be effective only if in writing
         and signed by a duly authorized representative of such party.

8.7      NOTICES

         All communications which may be or are required to be given by any
         party to any other party, shall be in writing and (i) delivered
         personally, (ii) sent by prepaid courier service or mail, or (iii) sent
         by prepaid telecopier or other similar means of electronic
         communication to the parties at their following respective address.

         TO THE CORPORATION:
         ------------------

         XBOX TECHNOLOGIES, INC.
         10400 Viking Drive, Suite 110
         Eden Prairie, Minnesota 55344

         Attention:        President
         Telecopier:       (952) 944-7812 with a copy to:

         Oppenheimer, Wolff & Donnelly LLP
         Attorneys Plaza VII
         45 South Seventh Street
         Suite 3400
         Minneapolis, MN  55402-1609

                                       24
<PAGE>   25

         Attention: Mr. Thomas A. Letscher
         Telecopier:       (612) 607-7100

         TO THE INVESTOR:
         ---------------

         TECHinspirations Inc. (Cayman)
         c/o CIBC Bank and Trust Company (Cayman) Limited
         P.O. Box 694
         CIBC Building, Edward Street
         Georgetown, Grand Cayman
         B.W.I.

         Attention: Mr. Ian Phillips
         Telecopier:       (345) 949-7904

         with a copy to TECHinspirations (Canada) Inc.
         2275 No. 8 Side Road
         R.R. #2
         Milton, Ontario L9T 2X6

         Attention: Mr. Frank van Luttikhuizen
         Telecopier:       (905) 335-1889

         and with a copy to the Investor's counsel at:

         Brien G. McKenna
         60 Bedford Road, 2nd Floor
         Toronto, ON M5R 2K2

         Attention: Mr. Brien G. McKenna
         Telecopier:       (416) 929-9931

8.8      ASSIGNMENT

         Neither this Agreement nor any rights or obligations hereunder shall be
         assignable by any party without the prior written consent of each of
         the other parties.

8.9      SEVERABILITY

         If any provision of this Agreement is invalid or unenforceable, such
         provision shall be severed and the remainder of this Agreement shall be
         unaffected thereby, but shall continue to be valid and enforceable to
         the fullest extent permitted by law.

8.10     COUNTERPARTS

         This Agreement may be executed by the parties in separate counterparts
         (by original or facsimile signature) each of which when so executed and
         delivered shall be an original, but all such counterparts shall
         together constitute one and the same instrument.

                                       25
<PAGE>   26

         IN WITNESS WHEREOF the parties have hereunder duly executed this
         Agreement on the date first above written.


                                             XBOX TECHNOLOGIES, INC.

                                             Per:
                                                 -------------------------------
                                             Name:

                                             Title:


                                             TECHinspirations Inc. (Cayman)

                                             Per:
                                                 -------------------------------
                                             Name:

                                             Title:


                                             TECHinspirations Inc. (Cayman)

                                             Per:
                                                 -------------------------------
                                             Name:

                                             Title:

                                       26
<PAGE>   27

                                  SCHEDULE 1.1

                                   DEFINITIONS

This is Schedule 1.1 of the Agreement between XBOX Technologies, Inc. and
TECHinspirations Inc. (Cayman) made as of the 31st day of October, 2000 with
effect as of the 31st day of August, 2000. Where used herein or in any amendment
hereto, the following terms have the following meanings, respectively:

         (a)      "Advisor" means TECHinspirations, Inc. a Nevada corporation.

         (b)      "Agreement" means this Agreement and includes all Schedules
                  annexed to this Agreement and referenced in Section 1.5 of
                  this Agreement;

         (c)      "Agreement Date" means October 31, 2000;

         (d)      "Authority" means any governmental or regulatory authority,
                  body, agency or department, whether federal, provincial or
                  municipal;

         (e)      "Business Day" means a day other than a Saturday, Sunday or
                  any other day on which the principal commercial banks located
                  at the City of Minneapolis, Minnesota are not open for
                  business during normal banking hours;

         (f)      "Closing" means the completion of the issuance by the
                  Corporation, and subscription by the Investor, of the Security
                  as provided hereunder;

         (g)      Closing Date" or "Date of Closing" means the Agreement Date;

         (h)      "Closing Documents" means all documents of conveyance,
                  instruments and agreements delivered at the Closing of the
                  transactions contemplated hereunder;

         (i)      "Common Shares" or "common shares" or "Common Stock" means
                  shares of common stock, $.10 par value, of the Corporation.;

         (j)      "Corporation's Liabilities" bears the meaning attributable to
                  it in Section 7.1 of the Agreement;

         (k)      "Corporation's Period" bears the meaning attributable to it in
                  Section 3.2 of the Agreement;

         (1)      "Indemnified Party" bears the meaning attributable to it in
                  subsection 7.3(a) of the Agreement;

         (m)      "Indemnifying Party" bears the meaning attributable to it in
                  subsection 7.3(a) of the Agreement;

         (n)      "Investor's Damages" bears the meaning attributable to that
                  term in Section 7.2 of this Agreement;

                                  Sch. 1.1 - 1
<PAGE>   28

         (o)      "Investor's Period" bears the meaning attributable to that
                  term in Section 3.4 of this Agreement;

         (p)      "Person" includes an individual, corporation, partnership,
                  trustee, trust, unincorporated association, organization,
                  syndicate, executor, administrator or other legal or personal
                  representative and pronouns have a similarly extended meaning;

         (q)      "Regulatory Approvals" means all necessary approvals, permits,
                  sanctions, rulings, orders or consents from any government,
                  governmental body, regulatory authority or self-regulatory
                  organization within the United States with respect to the
                  transactions contemplated by this Agreement;

         (r)      "SEC Reports" bears the meaning attributable to that term in
                  paragraph 3.3(f) hereof;

         (s)      "Securities" means the Purchased Shares and the shares of
                  Common Stock issuable upon conversion of the Purchased Shares.

         (t)      "Shares" bears the meaning attributable to that term in
                  Section 2.1 of this Agreement;

         (u)      "Third Party Claim" bears the meaning attributable to it in
                  Section 7.3(b) of the Agreement;

         (v)      "Time of Closing" means 10:00 a.m. (Minnesota time) on the
                  Closing Date or such other time as the Investor and the
                  Corporation may agree upon; and

         (w)      Transaction Documents" collectively means the documents to be
                  delivered at Closing and this Agreement.

                                  Sch. 1.1 - 2
<PAGE>   29

                                  SCHEDULE 3.3
                              TO PURCHASE AGREEMENT
                            DATED AS OF ______, 2000
                       BETWEEN XBOX TECHNOLGIES, INC. AND
                         TECHINSPIRATIONS, INC. (CAYMAN)

         This Disclosure Schedule (the "Disclosure Schedule") which consists of
this cover page and all the accompanying pages arid attachments, is made and
given by XBOX TECHNOLOGIES, INC. (the "Company") to TECHinspirations, Inc.
(Cayman) (the "Investor") in connection with the execution and delivery of the
Purchase Agreement, dated as of _________, 2000, by and between the Company and
the Investor.


                                  Sch. 3.3 - 1
<PAGE>   30

                            SECTION 3.3(h) LITIGATION

         The Company is involved with a dispute with MicroSoft Corporation over
the name "XBOX".

                                  Sch. 3.3 - 2
<PAGE>   31

                SECTION 3.3(q) SOFTWARE AND INTELLECTUAL PROPERTY

         Need input from Bill Klco

                                  Sch. 3.3 - 3