SECURITY AGREEMENT


                 Securing a $450,000 - One Year Convertible Note


         THIS SECURITY AGREEMENT  ("Agreement") is made effective as of the 16th
day  of  October,  2000,  by  and  between  Accesspoint  Corporation,  a  Nevada
corporation ("Accesspoint"), Processing Source International, Inc., a California
corporation ("PSI"), and RoyCap Inc., a Canadian corporation  ("Secured Party").
Accesspoint  and  PSI are  sometimes  herein  referred  to  individually  and/or
collectively as "Debtor." Debtor and Secured Party are sometimes herein referred
to individually as a "party" and collectively as the "parties."

         WHEREAS, Secured Party desires to lend to Accesspoint the principal sum
of $450,000.00  evidenced by, and in exchange for, a convertible  note issued by
Accesspoint in the principal amount of $450,000.00  bearing interest at the rate
of eight percent (8%) per annum, all due and payable in one (1) year ("Note");

         WHEREAS,  the  parties  desire  to  secure  the Note in part  against a
reserve account ("Reserve Account") required to be established and maintained by
PSI pursuant to a certain Merchant  Program  Processing  Agreement  ("Processing
Agreement")  by and between PSI on the one hand,  and Chase  Merchant  Services,
L.L.C., and The Chase Manhattan Bank on the other hand (collectively "Chase");

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which is hereby  acknowledged,  Debtor and Secured  Party hereby
agree as follows:

1.   GRANT OF SECURITY INTEREST.

         1.1  Debtor  hereby  grants to Secured  Party,  subject to any prior or
superior security interest or other interest of Chase or other party pursuant to
the Processing Agreement,  a security interest in the Reserve Account, all funds
deposited   therein,   and  any  and  all  additions  and  accessions   thereto,
substitutions  therefore,  and proceeds thereof,  up to, but not exceeding,  the
total sum of  USD$250,000.00  (collectively,  the  "Collateral"),  as collateral
security  for the  satisfaction  and the prompt and full  performance  of all of
Debtor's  obligations under the Note, as the Note may be amended,  modified,  or
extended from time to time  (including,  without  limitation,  the obligation to
make payments of principal and interest thereon).

         1.2 The  parties  acknowledge  that the  security  interest in favor of
Secured  Party  contemplated  herein  shall be a lien or  encumbrance  junior in
priority  to any  lien  or  encumbrance  arising  by  reason  of the  Processing
Agreement  and is expressly  made subject to the  provisions  of the  Processing
Agreement. Nothing in this Agreement shall

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defeat, impair or prejudice the lien, encumbrance or interest of Chase in and to
the Reserve  Account  pursuant to the terms of the  Processing  Agreement or any
other related document or instrument.

         1.3 Debtor shall  execute and deliver to Secured  Party for filing,  at
Debtor's  cost and expense,  a financing  statement  on Form UCC-1  covering the
Collateral.  Debtor  shall  execute  such  financing  statements  and shall take
whatever  other actions may be reasonably  requested by Secured Party to perfect
and continue Secured Party's security interest in the Collateral.

         1.4 A true and correct copy of this Agreement  shall be attached to the
Note as an  exhibit  and the terms of the Note shall be  incorporated  into this
Agreement by this reference.

2.       DEFAULT.  Any of the following events shall constitute an event of
default hereunder:

         2.1 The failure by Debtor to make full and timely  payment  when due of
any sum as  required  to be paid to  Secured  Party  under  the Note  after  any
applicable  notice of non-payment  provided for in the Note has been given,  and
any period within which to cure the non-payment has elapsed.

         2.2 This Agreement, or any of the instruments created hereunder, ceases
to be in  full  force  and  effect  (including  the  failure  of any  collateral
documents to create a valid and perfected security interest or lien) at any time
and for any reason.

         2.3 The filing by or against Debtor of any petition, or commencement by
Debtor of any proceeding,  under the Bankruptcy Act or any state  insolvency law
which remains undismissed or otherwise unstayed for a period of sixty (60) days.

         2.4      The making by Debtor of any general assignment for the benefit
of creditors.

         2.5  The  filing  of a  voluntary  or  involuntary  application  for or
appointment  of  a  receiver  with  regard  to  Debtor,   which  filing  remains
undismissed or otherwise unstayed for a period of sixty (60) days.

         2.6 The occurrence of any such petition,  filing or application  naming
Debtor  which  then  results  in  entry  of an  order  for  relief  and any such
adjudication or appointment remains undischarged,  undismissed or unstayed for a
period of sixty (60) days.

         2.7      The liquidation of Debtor.

         2.8      The dissolution of Debtor.

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         2.9      The substantial cessation of business by Debtor for a material
amount of time.


3.   INSPECTION  OF  RECORDS.   Secured   Party  shall  have,   subject  to  any
confidentiality  or  non-disclosure   provisions  contained  in  the  Processing
Agreement  or any other  agreement  between  Debtor and Chase,  the right,  upon
reasonable prior notice, to inspect all financial books,  records and reports of
Debtor regarding the Collateral at Debtor's premises or wherever the same may be
maintained during normal business hours.

4.       REMEDIES UPON DEFAULT.

         4.1  Subject  to  the  terms  of the  Processing  Agreement,  upon  the
occurrence of an event of default,  in addition to any and all other remedies at
law or in equity  available  to Secured  Party,  Debtor  hereby  authorizes  and
empowers  Secured Party, at Secured Party's option and without notice to Debtor,
except as  specifically  herein provided (and, to the extent  necessary,  hereby
irrevocably  appoints  Secured  Party  as  Debtor's  attorney-in-fact  for  such
purposes)  to require  Debtor to assemble  any and all of the deposit or account
documents  pertaining to the  Collateral  and make the same available to Secured
Party at the  premises  wherein  the same is located and  execute  such  drafts,
assignments,  documents or instruments as may be reasonably  required by Secured
Party to access and apply the funds in the Reserve Account as set forth herein.

         4.2 In the event of any such default,  the Collateral shall, subject to
the terms of the Processing Agreement,  be applied to pay, satisfy and discharge
the obligations of Debtor to Secured Party under the Note which are then due and
payable  pursuant  to the  terms of the  Note.  If all of the  Note  obligations
secured by this Agreement are then discharged and satisfied, Secured Party shall
pay the surplus, if any, to Debtor.

5.       COVENANTS AND REPRESENTATIONS OF DEBTOR.Debtor hereby makes the follow-
ing covenants and representations for the benefit of Secured Party, subject only
the Processing Agreement:

         5.1  Debtor is  contractually  obligated  pursuant  to the terms of the
Processing  Agreement  to  establish  the  Reserve  Account.  Debtor is  further
contractually  obligated  pursuant to the terms of the  Processing  Agreement to
replenish  the  amount of funds held in the  Reserve  Account if such funds fall
below certain amounts.

         5.2 The  Processing  Agreement  expressly  grants  to  Chase a lien and
security  interest in and to any funds in the Reserve  Account.  The  Processing
Agreement  allows Chase to set off, recoup and appropriate  funds in the Reserve
Account,  without notice to Debtor, in order to cover chargebacks,  adjustments,
fees and other  charges  which

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are owed by Debtor (or merchants) to Chase under the Processing Agreement or any
other any other agreement between Debtor and Chase.  There is no other agreement
or obligation owed by Debtor to Chase.

         5.3 Nothing in the Processing Agreement purports to prevent Debtor from
granting the security  interest granted to Secured Party  hereunder.  Nothing in
the  Processing  Agreement  purports to prevent  Secured  Party from  exercising
Secured Party's rights and remedies under this Agreement.

         5.4 Nothing in the Processing  Agreement purports to provide Chase with
the right to access the Reserve  Account solely because of the creation or grant
of the security interest set forth in this agreement.

         5.5 Debtor shall at all times  maintain the  Collateral  in  accordance
with the  Processing  Agreement and consistent  with good business  practice and
will pay any and all taxes thereon or applicable thereto prior to delinquency.

         5.6  Debtor  shall not  remove  the  Collateral  from any  location  or
depository without the prior written consent of Secured Party.

         5.7 Debtor shall promptly  notify Secured Party upon the termination of
the  Processing  Agreement  and/or  upon the  termination  or  amendment  of any
provisions  thereof which might relieve Debtor of the obligation to maintain the
Reserve Account.

         5.8 Debtor shall not sell, transfer,  assign, encumber,  hypothecate or
otherwise alienated any part of the Collateral, or any interest of Debtor in and
to the  Collateral,  or any part thereof,  without the prior written  consent of
Secured Party.

6.  DEBTOR'S  RIGHT  TO  POSSESSION.  Subject  to the  terms  of the  Processing
Agreement,  until default,  Debtor may have possession of the tangible  personal
property and  beneficial  use of all the Collateral and may use it in any lawful
manner not  inconsistent  with this  Agreement,  provided  that Debtors right to
possession and beneficial use shall not apply to any Collateral where possession
of the Collateral by Secured Party is required by law to perfect Secured Party's
security  interest  in  such  Collateral.  If  Secured  Party  at any  time  has
possession  of any  Collateral,  whether  before  or after an Event of  Default,
Secured Party shall be deemed to have exercised  reasonable  care in the custody
and  preservation  of the Collateral if Secured Party takes such action for that
purpose as Debtor shall  request or as Secured  Party,  in Secured  Party's sole
discretion, shall deem appropriate under the circumstances, but failure to honor
any request by Debtor  shall not of itself be deemed to be a failure to exercise
reasonable care. Secured Party shall not be required to take any steps necessary
to preserve any rights in the Collateral  against prior parties except as may be
directed by Chase or its agents or representatives.

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7. NO WAIVER BY SECURED PARTY.  Any  forbearance,  failure,  or delay by Secured
Party in exercising any right,  power or remedy hereunder shall not be deemed to
be a waiver of such right,  power, or remedy, and any single or partial exercise
of any right,  power or remedy of Secured  Party  shall not  preclude  the later
exercise of any other right,  power, or remedy,  each of which shall continue in
full force and effect until such right,  power, or remedy is specifically waived
by an instrument in writing, executed by Secured Party.

8.   EFFECTIVENESS  OF  AGREEMENT.   This  Agreement  and  Debtor's  duties  and
obligations  and Secured  Party's powers to dispose of the  Collateral,  and all
other rights,  powers,  and remedies  granted to Secured Party  hereunder  shall
remain in full force and effect until Debtor shall have satisfied and discharged
all of Debtor's obligations to Secured Party secured hereby.

9. WAIVER BY DEBTOR.  All  provisions of law, in equity and by statue  providing
for, relating to, or pertaining to pledges or security interests and the sale of
pledged property or property in which a security  interest is granted,  or which
prescribe,  prohibit,  limit or restrict the right to, or conditions,  notice or
manner of sale,  together with all limitations of law, in equity, or by statute,
on the  right of  attachment  in the case of  secured  obligations,  are  hereby
expressly  waived by Debtor to the fullest  extent Debtor may lawfully waive the
same.

10.  RELEASE OF COLLATERAL.  Upon payment in full by Debtor,  in lawful money of
the United  States of America,  to Secured Party at the address set forth in the
Note of all amounts  secured  hereby,  and upon the request of Debtor  therefor,
Secured Party will deliver to Debtor,  at Debtor's  sole cost and expense,  such
termination  statements and such other  documents of release,  reconveyance  and
reassignments  as shall be  sufficient  to discharge  Debtor of the  liabilities
secured  hereby and to  terminate  and  release  the  security  interest  in the
Collateral created hereby.

11.      MISCELLANEOUS.

         11.1 The  provisions of this  Agreement  were  negotiated by all of the
parties hereto and this Agreement  shall be deemed to have been drafted  equally
by all the parties hereto.

         11.2  This  Agreement  and all of its  terms  and  provisions  shall be
binding  upon the  heirs,  successors,  transferees  and  assigns of each of the
parties hereto.

         11.3 In the event any portion of this  Agreement is held  invalid,  the
remaining  portions  shall  remain in full force and  effect as if that  invalid
portion had never been a part hereof.

         11.4 In the event  litigation is commenced to enforce or interpret this
Agreement,  or any provision  hereof,  the prevailing party shall be entitled to
recover its

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actual attorneys' fees.

         11.5 Any and all notices,  demands,  requests,  or other communications
required or permitted by this  Agreement or by law to be served on, given to, or
delivered to any party hereto by any other party to this  Agreement  shall be in
writing and shall be deemed duly served,  given,  or delivered  when  personally
delivered  to the  party  or to an  officer  of the  party,  or in  lieu of such
personal delivery, when deposited in the United States mail, first-class postage
prepaid addressed to the party at any address provided by the party from time to
time for such purposes.

         11.6 This  Agreement  constitutes  the  entire  agreement  between  the
parties  pertaining to the subject  matter  contained in it and  supersedes  all
prior and contemporaneous agreements,  representations and understandings of the
parties.  No waiver of any of the provisions of this Agreement  shall be deemed,
or shall constitute a waiver of any other provision, whether or not similar, nor
shall any waiver  constitute  a  continuing  waiver.  No waiver shall be binding
unless executed in writing by the party making the waiver.

         11.7  This  Agreement  may be  executed  simultaneously  in one or more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall  constitute one and the same  instrument.  The exhibits  attached
hereto and  initialed  by the parties  are made a part  hereof and  incorporated
herein by this reference.

         11.8 Nothing in this Agreement, whether express or implied, is intended
to confer any rights or  remedies  under or by reason of this  Agreement  on any
persons  other  than the  parties  to it and  their  respective  successors  and
assigns,  nor is anything in this Agreement intended to relieve or discharge the
obligations  or liability of any third  persons to any party to this  Agreement,
nor shall any provision give any third person any right of subrogation or action
over against any party to this Agreement.

         11.9 Each party's  obligations  under this Agreement are unique. If any
party should default in its obligations  under this Agreement,  the parties each
acknowledge  that it would be extremely  impracticable  to measure the resulting
damages;  accordingly,  the  nondefaulting  party,  in  addition  to  any  other
available rights or remedies, may sue in equity for specific performance without
the  necessity  of  posting  a bond or  other  security,  and the  parties  each
expressly waive the defense that a remedy in damages will be adequate.

         11.10 All  representations,  warranties  and  agreements of the parties
contained in this Agreement, or in any instrument, certificate, opinion or other
writing   provided  for  in  it,  shall  survive  the  completion  of  all  acts
contemplated herein.

         11.11 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

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successful  or  prevailing  party or parties  shall be entitled to recover as an
element of their damages reasonable  attorney's fees and other costs incurred in
that  action  or  proceeding,  in  addition  to any other  relief to which  said
prevailing party may be entitled.

         11.12    Time is the essence of this Agreement.

         11.13  Whenever the context of this Agreement  requires,  the masculine
gender includes the feminine or neuter gender,  and the singular number includes
the plural.

         11.14 As used  herein,  the word "days"  shall  refer to calendar  day,
including  holidays,  weekend,  non-business  days,  etc. All dollar amounts set
forth herein shall be expressed in U.S. dollars.

         11.15 The  captions  contained  herein do not  constitute  part of this
Agreement  and are used  solely for  convenience  and shall in no way be used to
construe, modify, limit or otherwise affect this Agreement.

         IN WITNESS  WHEREOF,  this  Agreement is made  effective as of the date
first set forth above.


                DEBTOR:

                                Accesspoint:

                                Accesspoint Corporation, a Nevada corporation



                                By:      /s/ TOM M. DJOKOVICH
                                         ------------------------------------
                                         Tom M. Djokovich,
                                         Chief Executive Officer

                 PSI:

                                Processing Source International, Inc, a
                                California corporation


                                By:      /s/ ALFRED URCUYO
                                         ------------------------------------
                                         Alfred Urcuyo,
                                         President

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                                SECURED PARTY:

                                RoyCap Inc.,
                                An Ontario, Canada corporation


                                By:      /s/ STEVE RIDER
                                         ---------------------------------
                                         Steve Rider,
                                         President


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