PURCHASE AGREEMENT

                                  BY AND AMONG

                                  SOFTALK INC.

                                  AS "SELLER,"

                            INTERPRETEL (CANADA) INC.

                                   AS "BUYER",

                                       AND

                          WAVETECH INTERNATIONAL, INC.

                                OCTOBER 25, 1999
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                               PURCHASE AGREEMENT

                                TABLE OF CONTENTS

                                    ARTICLE I
                                   DEFINITIONS

1.1      Defined Terms.........................................................1
1.2      Other Defined Terms...................................................3

                                   ARTICLE II
                   PURCHASE AND SALE OF PRODUCTS AND ACCOUNTS

2.1      Transfer of Products and Accounts.....................................3
2.2      Assumption of Liabilities.............................................3
2.3      Excluded Liabilities..................................................3
2.4      Purchase Price........................................................5
2.5      Closing Costs; Transfer Taxes and Fees................................5

                                   ARTICLE III
                                     CLOSING

3.1      Closing...............................................................6
3.2      Conveyances at Closing................................................6
3.3      Elections.............................................................6

                                   ARTICLE IV
                     REPRESENTATION AND WARRANTIES OF SELLER

4.1      Organization of Seller................................................7
4.2      Authorization.........................................................7
4.3      No Changes to the Products or Accounts................................7
4.4      Products or Accounts..................................................8
4.5      Contracts and Commitments.............................................8
4.6      Absence of Breaches or Defaults.......................................8
4.7      Permits and Consents..................................................8
4.8      No Conflict or Violation..............................................9
4.9      Litigation............................................................9
4.10     Compliance with Law...................................................9
4.11     Tax Matters..........................................................10
4.12     Liabilities..........................................................10

                                    ARTICLE V
              REPRESENTATIONS AND WARRANTIES OF BUYER AND WAVETECH

5.1      Organization of Buyer................................................10
5.2      Authorization........................................................10
5.3      Capitalization.......................................................10
5.4      Consents and Approvals...............................................11
5.5      Permits and Consents.................................................11

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5.6      No Conflict or Violation.............................................11
5.7      Litigation...........................................................12
5.8      Compliance with Law..................................................12
5.9      GST..................................................................12

                                   ARTICLE VI
                     COVENANTS OF SELLER, BUYER AND WAVETECH

6.1      Further Assurances...................................................13
6.2      Notification of Certain Matters......................................13
6.3      Conduct of Business..................................................13
6.4      Joint Election.......................................................14
6.5      Right of First Refusal...............................................14
6.6      Registration Rights..................................................15

                                   ARTICLE VII
                       CONDITIONS TO SELLER'S OBLIGATIONS

7.1      Consents.............................................................16
7.2      Opinion of Counsel...................................................16
7.3      Certificates.........................................................18
7.4      Corporate Documents..................................................18
7.5      Buyer Preferred Stock................................................18

                                  ARTICLE VIII
                        CONDITIONS TO BUYER'S OBLIGATIONS

8.1      Representations, Warranties and Covenants............................19
8.2      Consents.............................................................19
8.3      No Proceedings or Litigations........................................19
8.4      Opinion of Counsel...................................................19
8.5      Certificates.........................................................21
8.6      Conveyancing Documents; Release of Encumbrances......................21
8.7      Material Changes.....................................................21
8.8      Corporate Documents..................................................21
8.9      Due Diligence Review.................................................21

                                   ARTICLE IX
                      RISK OF LOSS; CONSENTS TO ASSIGNMENT

9.1      Risk of Loss.........................................................22
9.2      Consents to Assignment...............................................22

                                    ARTICLE X
             ACTIONS BY SELLER, BUYER AND WAVETECH AFTER THE CLOSING

10.1     Books and Records; Payment of Liabilities............................23
10.2     Survival of Representations, Etc.....................................23
10.3     Indemnifications.....................................................23
10.4     Further Action.......................................................26

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                                   ARTICLE XI
                                  MISCELLANEOUS

11.1     Termination..........................................................26
11.2     Assignment...........................................................28
11.3     Notices..............................................................28
11.4     Choice of Law........................................................29
11.5     Entire Agreement; Amendments and Waivers.............................29
11.6     Multiple Counterparts................................................29
11.7     Expenses.............................................................29
11.8     Invalidity...........................................................29
11.9     Titles...............................................................30
11.10    Publicity; Confidentiality...........................................30
11.11    Cumulative Remedies..................................................30
11.12    Arbitration..........................................................30

                                   ARTICLE XII
                                   BULK SALES

12.1     Bulk Sales...........................................................31

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                                    EXHIBITS

"A"      Equipment

"B"      Bill of Sale

"C"      Assignment of Contract Rights

"D"      Assumption of Certain Liabilities

                                    SCHEDULES

Schedule 4.5.1         Assumed Contracts and Contracts
Schedule 5.3.1    -    Wavetech Capital
Schedule 5.3.2    -    Buyer Capital

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                               PURCHASE AGREEMENT

     This  Purchase  Agreement,  dated as of October 25,  1999,  is by and among
Wavetech  International,  Inc., a Nevada corporation  ("Wavetech"),  Interpretel
(Canada)  Inc.  ("Buyer"),  an Ontario,  Canada  corporation  and a wholly owned
subsidiary  of  Wavetech,  and  Softalk  Inc.,  an Ontario,  Canada  corporation
("Seller").

                                    RECITALS

     A. Seller owns certain  Products  and Accounts (as defined  below) which it
sells or uses in its conduct of the Business (as defined below).

     B. Buyer  desires to purchase  from Seller,  and Seller  desires to sell to
Buyer,  such Products and Accounts upon the terms and subject to the  conditions
of this Agreement.

                                    AGREEMENT

     NOW  THEREFORE,  in  consideration  of the mutual  covenants  and  promises
contained herein and for other good and valuable consideration,  the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

     1.1    DEFINED  TERMS.  As used  herein,  the terms  below  shall  have the
            following meanings.  Any of such terms, unless the context otherwise
            requires, may be used in the singular or plural,  depending upon the
            reference.

            "BOOKS  AND  RECORDS"  shall  mean all  records  and lists of Seller
            pertaining to the Products or Accounts.

            "BUSINESS" shall mean Seller's  intellectual property for use in the
            transmission of voice, data and fax services.

            "BUYER  PREFERRED  STOCK" shall mean the Class A Preferred Stock, no
            par value,  of Buyer  which  shares are  exchangeable  for shares of
            Wavetech Common Stock.

            "CLOSING  DATE" shall mean on or before  October 29,  1999,  or such
            other date as Buyer and Seller shall mutually  agree upon;  provided
            that  either  party may elect to defer  the  Closing  Date to a date
            which is  reasonably  satisfactory  to both  parties if necessary to
            complete the Closing.

            "CONTRACT" shall mean any agreement,  contract, note, loan, evidence
            of  indebtedness,   purchase  order,  letter  of  credit,  franchise
            agreement,   undertaking,   covenant  not  to  compete,   employment
            agreement,  license,  instrument,  obligation or commitment to which
            Seller is a party or is bound  and which  relates  to  Products  and
            Accounts, whether oral or written.

                                        1
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            "ENCUMBRANCE"  shall mean any claim, lien, pledge,  option,  charge,
            easement, security interest, deed of trust, mortgage,  right-of-way,
            encroachment,   building  or  use  restriction,   conditional  sales
            agreement,  encumbrance  or other  right of third  parties,  whether
            voluntarily  incurred or arising by operation of law, and  includes,
            without  limitation,  any  agreement to give any of the foregoing in
            the  future,  and any  contingent  sale or  other  little  retention
            agreement or lease in the nature thereof.

            "EQUIPMENT"  shall mean all of the  computer  equipment  and related
            spare parts, tools, supplies,  equipment and other tangible personal
            property owned by Seller related to the Products and Accounts.

            "MATERIAL  ADVERSE  EFFECT" or "MATERIAL  ADVERSE CHANGE" shall mean
            with  respect to the  Business  or the  Products  and  Accounts  any
            significant  and  substantial   adverse  effect  or  change  in  the
            condition  (financial or other),  business,  results of  operations,
            prospects,  assets, liabilities or operations of the Business and/or
            the Products and Accounts or on the ability of Seller to  consummate
            the  transactions  contemplated  hereby,  or any event or  condition
            which  would,  with the  passage  of time,  constitute  a  "Material
            Adverse Effect" or "Material Adverse Change".

            "PERMITS" shall mean all licenses, permits,  franchises,  approvals,
            authorizations,   consents  or  orders  of,  or  filings  with,  any
            governmental  authority,  whether  foreign,  federal,  provincial or
            local,  or any other  person,  necessary or desirable  for the past,
            present or anticipated  conduct of, or relating to the operation of,
            the business of such Person.

            "PRODUCTS  AND  ACCOUNTS"  shall  mean all of the  right,  title and
            interest of Seller in and to the following items:

            1.1.1   all rights of Seller under the Assumed Contracts;

            1.1.2   all Equipment related to the Products and Accounts listed on
                    Exhibit "A";

            1.1.3   all   rights   under   or   pursuant   to  all   warranties,
                    representations   and   guarantees   made  by  suppliers  in
                    connection  with the  Products  and  Accounts  furnished  to
                    Seller, to the extent such warranties,  representations  and
                    guarantees  (ii) are not  required  by Seller to fulfill its
                    obligations under this Agreement and (ii) are assignable;

            1.1.4   all claims,  causes of action, rights of recovery and rights
                    of  set-off  of any kind,  against  any  person  or  entity,
                    including without limitation any liens,  security interests,
                    pledges or other rights to payment or to enforce  payment in
                    connection with Products and Accounts delivered by Seller on
                    or prior to the Closing Date;

            "REPRESENTATIVE"  shall  mean  any  officer,  director,   principal,
            attorney, agent, employee or other representative.

                                        2
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            "Tax" shall mean any federal,  provincial,  local,  foreign or other
            tax, levy, impost,  fee,  assessment or other government or province
            charge,  including  without  limitation  income,  estimated  income,
            business,   occupation,   franchise,   property,  payroll,  personal
            property,   sales,  transfer,  use,  employment,   commercial  rent,
            occupancy,   franchise  or  withholding   taxes,  and  any  premium,
            including without  limitation  interest,  penalties and additions in
            connection therewith.

            "Wavetech  Common  Stock"  shall  mean the Common  Stock,  $0.01 par
            value, of Wavetech.

     1.2    Other Defined  Terms.  The  following  terms shall have the meanings
            defined for such terms in the Sections set forth below:

            TERM                                          SECTION
            ----                                          -------
            Action                                        4.9
            Assumed Contracts                             2.2
            Assumed Liabilities                           2.2
            Assumption Document                           3.2.1.4
            Balance Sheet                                 4.12
            Buyer Securities                              5.3.2
            Claim                                         10.3.4
            Claim Notice                                  10.3.4
            Closing                                       3.1
            Damages                                       10.3.1
            Excluded Liabilities                          2.3
            Purchase Price                                2.4
            Wavetech Securities                           5.3.1
            Share Exchange Agreement                      7.5

                                   ARTICLE II

                   PURCHASE AND SALE OF PRODUCTS AND ACCOUNTS

     2.1    TRANSFER OF PRODUCTS AND ACCOUNTS. Upon the terms and subject to the
            conditions  contained  herein,  at the  Closing,  Seller  will sell,
            convey,  transfer,  assign  and  deliver  to Buyer,  and Buyer  will
            acquire from Seller, the Products and existing Accounts.

     2.2    ASSUMPTION  OF  LIABILITIES.  Upon  the  terms  and  subject  to the
            conditions contained herein, at the Closing,  Buyer shall assume all
            obligations and liabilities  (the "Assumed  Liabilities")  accruing,
            arising out of, or relating to events or occurrences happening after
            the  Closing  Date under the  vendor  contracts  listed in  Schedule
            4.5.1(the "Assumed Contracts").

     2.3    EXCLUDED  LIABILITIES.  Notwithstanding  any other provision of this
            Agreement, except for the Assumed Liabilities expressly specified in
            Section 2.2,  Buyer shall not assume,  or  otherwise be  responsible

                                        3
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            for, any of Seller's  liabilities or obligations,  whether actual or
            contingent, matured or unmatured, liquidated or unliquidated,  known
            or unknown,  or related or unrelated to the Business or the Products
            and Accounts,  whether  arising out of  occurrences  prior to, at or
            after the date hereof (collectively,  "Excluded Liabilities"), which
            Excluded  Liabilities include,  without limitation,  the liabilities
            and obligations specified in Sections 2.3.1-2.3.6 below, inclusive.

            2.3.1   Any  liability  or  obligation  to  or  in  respect  of  any
                    employees or former employees of Seller,  including  without
                    limitation,  (i) any liability for accrued  vacation or sick
                    pay due employees of Seller; (ii) any employment  agreement,
                    whether or not written, between Seller and any person; (iii)
                    any   liability   under  any  employee   plan  at  any  time
                    maintained,  contributed to or required to be contributed to
                    by or with respect to Seller or under which Seller may incur
                    liability,  or any  contributions,  benefits or  liabilities
                    therefor,   or  any  liability   with  respect  to  Seller's
                    withdrawal or partial  withdrawal from or termination of any
                    employee  plan;  and  (iv)  any  claim  of an  unfair  labor
                    practice,  or any claim  under any  provincial  unemployment
                    compensation or worker's  compensation  law or regulation or
                    under any federal or  provincial  employment  discrimination
                    law or  regulation,  which  shall have been  asserted  on or
                    prior to the Closing  Date or is based on acts or  omissions
                    which occurred on or prior to the Closing Date;

            2.3.2   Any liability or obligation of Seller in respect of any Tax,
                    excluding any provincial sales tax ("PST") arising under the
                    RETAIL SALES ACT  (Ontario),  as amended (the "Retail  Sales
                    Act") as result  of the  transactions  contemplated  by this
                    Agreement,  or goods and services tax ("GST")  arising under
                    the EXCISE TAX ACT  (Canada),  as amended  (the  "Excise Tax
                    Act"), as a result of the transactions  contemplated by this
                    Agreement, which, subject to Section 3.2.5, shall be payable
                    by  Buyer;

            2.3.3   Any  liability  or  obligation  of  Seller arising out of or
                    related to any  Action  against  Seller or any Action  which
                    adversely  affects the Products and Accounts and which shall
                    have been asserted on or prior to the Closing Date or to the
                    extent the basis of which  shall have  arisen on or prior to
                    the Closing Date;

            2.3.4   Any  liability  or  obligation  of  Seller   resulting  from
                    entering  into,  performing its  obligations  pursuant to or
                    consummating   the   transactions   contemplated   by,  this
                    Agreement (including,  without limitation,  any liability or
                    obligation of Seller pursuant to Article X hereof);

            2.3.5   Any accounts payable of Seller; and

            2.3.6   Any  obligation  or  liability  for  breach of any  Contract
                    occurring on or prior to the Closing Date.

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     2.4    PURCHASE  PRICE.  At the Closing,  upon the terms and subject to the
            conditions set forth herein, Buyer shall pay to Seller the aggregate
            sum of U.S. $10 million in  consideration  for Seller  conveying and
            assigning the Products and Accounts to Buyer (the "Purchase Price").
            The  Purchase  Price  shall be  payable on the  Closing  Date in the
            following manner.

            2.4.1   BUYER PREFERRED STOCK. By delivery to Seller upon Closing of
                    an aggregate of 4,329,004 duly  authorized,  validly issued,
                    fully  paid and  nonassessable  shares  of  Buyer  Preferred
                    Stock,  which shall be  exchangeable  on a one for one basis
                    into shares of Wavetech  Common  Stock.  Each share of Buyer
                    Preferred   Stock  shall  be   exchangeable   for  one  duly
                    authorized,  validly  issued,  fully paid and  nonassessable
                    share of Wavetech  Common  Stock as of the  Closing.  In the
                    event  Seller  elects  to  exchange  such  shares  of  Buyer
                    Preferred  Stock for shares of Wavetech  Common  Stock as of
                    the  Closing,  such  shares of Wavetech  Common  Stock would
                    represent  approximately  58% of the issued and  outstanding
                    capital stock of Wavetech as of the Closing.

            2.4.2   RESTRICTIVE  LEGEND.  Such shares of Buyer  Preferred  Stock
                    (and  Wavetech  Common  Stock if Seller  elects to  exchange
                    Buyer Preferred Stock for Wavetech Common Stock prior to the
                    effective date of its registration  under Section 6.6) shall
                    bear the following restrictive legend:

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

     2.5    CLOSING COSTS;  Transfer Taxes and Fees. Seller shall be responsible
            for any taxes  imposed  by reason of the  transfer  of  Products  or
            Accounts provided hereunder and any deficiency,  interest or penalty
            asserted with respect thereto, excluding any PST or GST arising as a
            result of the  transactions  contemplated  by this  Agreement  which
            shall be  payable by Buyer.  Seller  shall pay the fees and costs of
            recording  or  filing  all   applicable   conveyancing   instruments
            described  in  Section  3.2.1  and  shall  pay the fees and costs of
            recording or filing in the Province of Ontario PPSA Financing Change
            Statements and other releases of Encumbrances.

                                        5
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                                   ARTICLE III

                                     CLOSING

     3.1    CLOSING.  The Closing of the transactions  contemplated  herein (the
            "Closing")  shall be held on the Closing Date at a time and place as
            the parties shall mutually agree.

     3.2    CONVEYANCES AT CLOSING BY SELLER.

            3.2.1   INSTRUMENTS AND POSSESSION.  To effect the sale and transfer
                    referred  to in Section  2.1  hereof,  Seller  will,  at the
                    Closing, execute and deliver to Buyer:

                    3.2.1.1   one or more  bills  of  sale,  each in the form of
                              Exhibit  "B"  attached  hereto,  conveying  in the
                              aggregate all of Seller's owned personal  property
                              included in the  Products and  Accounts,  free and
                              clear of all  Encumbrances,  except  as  otherwise
                              provided  in  Section  2.5.5;  3.2.1.2  subject to
                              Section 9.2,  Assignments of Contract Rights, each
                              in the form of Exhibit "C" attached  hereto,  with
                              respect to the Assumed Contracts;

                    3.2.1.3   such other  instruments  as shall be  requested by
                              Buyer  to  vest  in  Buyer  title  in  and  to the
                              Products  and  Accounts  in  accordance  with  the
                              provisions hereof;

                    3.2.1.4   the  Assumption  Agreement  in the form of Exhibit
                              "D."

            3.2.2   FORM  OF  INSTRUMENTS.  To the  extent  that  a form  of any
                    document to be  delivered  hereunder  is not  attached as an
                    Exhibit  hereto,   such  documents  shall  be  in  form  and
                    substance,  and shall be executed and delivered in a manner,
                    reasonably satisfactory to Buyer.

            3.2.3   CERTIFICATES;  OPINIONS.  Seller shall  deliver to Buyer the
                    certificates,   opinion  of  counsel  and  other   documents
                    described in Article VIII.

            3.2.4   Consents.  Subject  to Section 9.2, Seller shall deliver all
                    third  party  consents,  if  any,  required  for  the  valid
                    transfer  of  the  Products  and Accounts as contemplated by
                    this Agreement.

     3.3    CONVEYANCES AT CLOSING BY BUYER.

            3.3.1   INSTRUMENTS AND POSSESSION.  To effect the sale and transfer
                    referred  to in  Section  2.1  hereof,  Buyer  will,  at the
                    Closing, execute and deliver to Buyer:

                                        6
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                    3.3.1.1   Certificates  representing the 4,329,004 shares of
                              Buyer Preferred Stock to be delivered  pursuant to
                              Section 2.4.1.

                    3.3.1.2   The Share Exchange Agreement.

            3.3.2   FORM  OF  INSTRUMENTS.  To the  extent  that  a form  of any
                    document to be  delivered  hereunder  is not  attached as an
                    exhibit  hereto,   such  documents  shall  be  in  form  and
                    substance,  and shall be executed  and  delivered  in manner
                    reasonably satisfactory to the Seller.

            3.3.3   CERTIFICATES:  OPINIONS.  Buyer shall  deliver to Seller the
                    certificates,   opinion  of  counsel  and  other   documents
                    described in Article VII.

     3.4    ELECTIONS.  Buyer and  Seller  shall  complete  and file in the form
            prescribed such elections under Section 167 of the Excise Tax Act to
            obtain a GST  exemption  with  respect the sale of the  Products and
            Accounts  contemplated by this Agreement.  The Buyer shall file such
            form with the return for the Buyer's  reporting  period in which the
            sale is made.

                                   ARTICLE IV
                    REPRESENTATIONS AND WARRANTIES OF SELLER

     Seller represents and warrants to Buyer as follows,  which  representations
and warranties are, as of the date hereof,  and will be, as of the Closing Date,
true and correct:

     4.1    ORGANIZATION  OF SELLER.  Seller is a  corporation  duly  organized,
            validly existing and in good standing under the laws of the Province
            of Ontario, Canada.

     4.2    AUTHORIZATION.   Seller  has  all  requisite   corporate  power  and
            authority,  and has taken all corporate action necessary, to own the
            Products  and  Accounts,  to conduct the Business as it is presently
            being  conducted,   to  execute  and  deliver  this  Agreement,   to
            consummate the transactions  contemplated  hereby and to perform its
            obligations  hereunder.  This  Agreement  has been duly executed and
            delivered by Seller and is a legal,  valid and binding obligation of
            Seller enforceable  against it in accordance with its terms,  except
            as   enforceability   may  be  limited  by  applicable   bankruptcy,
            insolvency,  or  similar  laws  affecting  creditors'  rights  or by
            principles of equity.

     4.3    NO CHANGES TO THE PRODUCTS OR ACCOUNTS. Since April 30, 1998:

            4.3.1   there  has  been no  actual  or,  to the  best  of  Seller's
                    knowledge,  threatened  adverse  change in the  Products  or
                    Accounts  or any  event,  condition  or state of  facts,  in
                    either case that is, or would  result in a Material  Adverse
                    Change  in  the  Products  or  Accounts,  including  without
                    limitation, the loss of any material customers; and

            4.3.2   there has not been any sale or other disposition,  except in
                    the  ordinary  course of  Seller's  business,  of any of the
                    Products  or  Accounts,  or any  Encumbrance  placed  on the
                    Products or Accounts.

                                        7
<PAGE>
     4.4    PRODUCTS  OR  ACCOUNTS.  Seller  has  and  will  transfer  good  and
            marketable fee simple title to the Products or Accounts and upon the
            consummation of the  transactions  contemplated  hereby,  Buyer will
            acquire  good title to all of the  Products  or  Accounts,  free and
            clear of any Encumbrances.  The Products and Accounts represent all,
            or substantially all, of Seller's assets and,  therefore,  such sale
            shall be exempt from GST.

     4.5    CONTRACTS AND COMMITMENTS.

            4.5.1   CONTRACTS. Schedule 4.5.1 sets forth a complete and accurate
                    list  of  all  Assumed  Contracts  and  all Contracts of the
                    following   categories   that  relate  to  the  Products  or
                    Accounts:

                    4.5.1.1   Contracts  not  made  in the  ordinary  course  of
                              Seller's conduct of the Business;

                    4.5.1.2   Distribution,   franchise,   license,   sales   or
                              commission  contracts  related to the  Products or
                              Accounts;

                    4.5.1.3   Contracts  involving  expenditures or liabilities,
                              actual  or  potential,  in  excess  of  $1,000  or
                              otherwise  material to the  Products or  Accounts,
                              and not cancelable  (without  liability) within 30
                              calendar days;

                    4.5.1.4   Promissory notes, loans, agreements,  evidences of
                              indebtedness,  letters of credit,  guarantees,  or
                              other instruments relating to an obligation to pay
                              money,  whether  Seller  shall  be  the  borrower,
                              lender or  guarantor  thereunder  or  whereby  any
                              Products or Accounts are pledged;

     4.6    ABSENCE OF BREACHES OR DEFAULTS.  All of the Contracts are valid and
            in full  force and  effect.  Seller  has duly  performed  all of its
            obligations  under the  Contracts  in all  material  respects to the
            extent those  obligations to perform have accrued,  and no violation
            of, or default or breach under any Contracts by Seller,  to the best
            of Seller's  knowledge,  or any other party has occurred and neither
            Seller nor, or to the best of  Seller's  knowledge,  any other party
            has repudiated any provisions thereof.

     4.7    PERMITS AND CONSENTS. Seller has all Permits required to conduct the
            Business,  except where the failure to obtain such Permits would not
            have a Material  Adverse  Effect on the  Products or Accounts or the
            Business.  All Permits of Seller  related to the  Business are valid
            and in full force and effect. All such Permits are assignable and no
            notice   to,   declaration,   filing  or   registration   with,   or
            authorization,  or  consent  or  approval  of, or Permit  from,  any
            governmental or regulatory body or authority, or any other person or
            entity,  is required to be made or obtained by Seller in  connection
            with the  execution,  delivery or  performance of this Agreement and
            the consummation of the transactions contemplated hereby. All of the
            Assumed  Contracts will be enforceable by Buyer after the Closing to
            the  same  extent  as  if  the  transactions  contemplated  by  this
            Agreement had not been consummated,  except as the enforceability of
            such   Contracts  may  be  limited  by   applicable   bankruptcy  or
            reorganization laws.

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<PAGE>
     4.8    NO CONFLICT OR  VIOLATION.  After giving effect to consents and lien
            releases  that have been  obtained  from third parties or will be so
            obtained  prior to the Closing Date,  if any,  neither the execution
            and delivery of this Agreement by Seller nor the consummation of the
            transactions  contemplated hereby, nor compliance by Seller with any
            of the  provisions  hereof,  will (a) violate or  conflict  with any
            provision of the  organizational  documents of Seller,  (b) violate,
            conflict  with,  or  result  in a breach  of any  provision  of,  or
            constitute  a default  (or an event  which,  with notice or lapse of
            time or both,  would  constitute a default)  under, or result in the
            termination of, or accelerate the performance required by, or result
            in a right of termination or  acceleration  under,  or result in the
            creation  of any  Encumbrance  upon any of the  Products or Accounts
            under,  any of the terms,  conditions or provisions of any Contract,
            Permit,  agreement,  or other  instrument or obligation (i) to which
            Seller  is a party or (ii) by which the  Products  or  Accounts  are
            bound, (c) violate any statute, rule, regulation,  ordinance,  code,
            order, judgment,  ruling, writ,  injunction,  decree or award or (d)
            impose any  Encumbrance,  restriction  or charge on the  Products or
            Accounts or the Business.

     4.9    LITIGATION. There is no action, order, writ, injunction, judgment or
            decree outstanding or any claim, suit, litigation, proceeding, labor
            dispute,  arbitral  action,   governmental  audit  or  investigation
            (collectively,  "Actions")  pending,  or to  the  best  of  Seller's
            knowledge,  threatened  or  anticipated  (a) against,  related to or
            affecting  Seller,  the  Business or the Products or Accounts or (b)
            seeking to delay,  limit or enjoin the transactions  contemplated by
            this Agreement.  Seller is not in default with respect to or subject
            to any judgment,  order, writ,  injunction or decree of any court or
            governmental agency, and there are no unsatisfied  judgments against
            Seller, the Business or its Products or Accounts.

     4.10   COMPLIANCE  WITH LAW.  The conduct of the  Business has not violated
            and  is  in  compliance   with  all  laws,   statutes,   ordinances,
            regulations, rules and orders of any foreign, federal, provincial or
            local  government and any other  governmental  department or agency,
            and  any  judgment,  decision,  decree  or  order  of any  court  or
            governmental  agency,  department or authority,  including,  without
            limitation,   environmental   laws,  relating  to  the  Products  or
            Accounts,  or Business or  operations  of Seller,  except  where the
            violation or failure to comply,  individually  or in the  aggregate,
            would not have a Material Adverse Effect on the Products or Accounts
            or the  Business.  Seller  and the  conduct  of the  Business  is in
            conformity  with all energy,  public utility,  zoning,  building and
            health codes, regulations and ordinances, and environmental laws and
            all other foreign, federal,  provincial,  and local governmental and
            regulatory  requirements,  except where any nonconformity  would not
            have a Material  Adverse  Effect on the  Products or Accounts or the
            Business.  Seller has not received any notice to the effect that, or
            otherwise  been advised that, it is not in compliance  with any such
            statutes, regulations, rules, judgments, decrees, orders, ordinances
            or other  laws,  and  Seller  has no reason to  anticipate  that any

                                        9
<PAGE>
            existing  circumstances are likely to result in violations of any of
            the foregoing,  which  non-compliance or violation could, in any one
            case or in the  aggregate,  have a  Material  Adverse  Effect on the
            Products or Accounts or the Business.

     4.11   TAX  MATTERS.  There are no liens for Taxes  (other than as could be
            asserted for current  Taxes not yet due and payable) on the Products
            or Accounts.

     4.12   LIABILITIES.  Seller has no liabilities  or  obligations  (absolute,
            accrued,  contingent or otherwise)  except (i) liabilities which are
            reflected  on its  balance  sheet  dated as of April  30,  1999 (the
            "Balance Sheet"), or which are not required under generally accepted
            accounting  principles  to be reflected on the Balance  Sheet,  (ii)
            liabilities  incurred in the  ordinary  course of the  Business  and
            consistent  with past practice  since the date of the Balance Sheet,
            and (iii) liabilities arising under Contracts identified in Schedule
            4.5 to which Seller is a party.

                                    ARTICLE V
              REPRESENTATIONS AND WARRANTIES OF BUYER AND WAVETECH

            Buyer  and  Wavetech  hereby  represent  and  warrant  to  Seller as
      follows,  which representations and warranties are, as of the date hereof,
      and will be, as of the Closing Date, true and correct:

     5.1    ORGANIZATION  OF BUYER.  Each of Buyer and Wavetech is a corporation
            duly organized, validly existing and in good standing under the laws
            of its  jurisdiction  of  incorporation.  Buyer  is a  wholly  owned
            subsidiary of Wavetech.

     5.2    AUTHORIZATION.  Each of Buyer and Wavetech has all  requisite  power
            and  authority,  and  has  taken  all  action  necessary  under  its
            organizational  documents, to execute and deliver this Agreement, to
            consummate the transactions  contemplated  hereby and to perform its
            obligations  hereunder.  This  Agreement  has been duly executed and
            delivered by Buyer and  Wavetech  and is a legal,  valid and binding
            obligation   of  such   corporations,   enforceable   against   each
            corporation in accordance with its terms,  except as  enforceability
            may be limited by applicable bankruptcy, insolvency, or similar laws
            affecting creditor's rights or by principles of equity.

     5.3    CAPITALIZATION.

            5.3.1   WAVETECH.  The authorized capital stock of Wavetech consists
                    of 50,000,000  shares of Common  Stock,  par value $.001 per
                    share,  3,059,662 of which are issued and  outstanding as of
                    the  Closing.  All  outstanding  shares of capital  stock of
                    Wavetech have been duly  authorized,  validly issued and are
                    fully  paid  and  nonassessable.  Except  as  set  forth  on
                    Schedule  5.3.1,  there  are  outstanding  (i) no  shares of
                    capital  stock or other  voting  securities  of  Wavetech or
                    capital appreciation rights, stock options,  warrants, stock
                    appreciation  rights or other phantom equity interests based
                    on the value of  Wavetech's  capital  stock or other  voting
                    securities,  (ii) no securities of Wavetech convertible into

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<PAGE>
                    or  exchangeable  for  shares  of  capital  stock or  voting
                    securities of Wavetech, and (iii) no options or other rights
                    to acquire from  Wavetech,  and no obligation of Wavetech to
                    issue any capital  stock,  voting  securities  or securities
                    convertible into or exchangeable for capital stock or voting
                    securities    of    Wavetech    (collectively,     "WAVETECH
                    SECURITIES").   There  are  no  outstanding  obligations  of
                    Wavetech to repurchase, redeem or otherwise acquire Wavetech
                    Securities.

            5.3.2   BUYER. The authorized  capital stock of Buyer consists of an
                    unlimited  number  of no par value  Class A Shares,  none of
                    which are issued and outstanding, and an unlimited number of
                    no par  value  Common  Shares,  one of which is  issued  and
                    outstanding.  All  outstanding  shares of  capital  stock of
                    Buyer  have been duly  authorized,  validly  issued  and are
                    fully  paid  and  nonassessable.  Except  as  set  forth  on
                    Schedule  5.3.2,  there  are  outstanding  (i) no  shares of
                    capital stock or other voting securities of Buyer or capital
                    appreciation   rights,   stock  options,   warrants,   stock
                    appreciation  rights or other phantom equity interests based
                    on the  value of  Buyer's  capital  stock  or  other  voting
                    securities,  (ii) no securities of Buyer convertible into or
                    exchangeable   for  shares  of   capital   stock  or  voting
                    securities of Buyer, and (iii) no options or other rights to
                    acquire from Buyer,  and no obligation of Buyer to issue any
                    capital stock,  voting securities or securities  convertible
                    into or exchangeable for capital stock or voting  securities
                    of Buyer (collectively,  "Buyer  Securities").  There are no
                    outstanding  obligations of Buyer to  repurchase,  redeem or
                    otherwise acquire Buyer Securities.  Buyer is a wholly owned
                    subsidiary of Wavetech.

     5.4    CONSENTS  AND  APPROVALS.  No  notice  to,  declaration,  filing  or
            registration  with,  or  authorization,  consent or approval  of, or
            permit from, any  governmental or regulatory  body or authority,  or
            any other  person or entity,  is  required to be made or obtained by
            Buyer or Wavetech in  connection  with the  execution,  delivery and
            performance of this Agreement,  including the issuance of the shares
            of Buyer  Preferred  Stock and Wavetech  Common  Stock  exchangeable
            therefor,  and the  consummation  of the  transactions  contemplated
            hereby,  except  (a) as has  been  obtained  on or prior to the date
            hereof.

     5.5    PERMITS AND  CONSENTS.  Each of Buyer and  Wavetech  has all Permits
            required to conduct their  respective  businesses,  except where the
            failure to obtain  such  Permits  would not have a Material  Adverse
            Effect on such businesses. All Permits of Buyer and Wavetech related
            to their  respective  businesses  are  valid  and in full  force and
            effect.   All  such  Permits  are   assignable  and  no  notice  to,
            declaration,  filing or  registration  with,  or  authorization,  or
            consent  or  approval  of,  or  Permit  from,  any  governmental  or
            regulatory  body or  authority,  or any other  person or entity,  is
            required  to be made or  obtained  by either  Buyer or  Wavetech  in
            connection  with the  execution,  delivery  or  performance  of this
            Agreement  and the  consummation  of the  transactions  contemplated
            hereby.

     5.6    NO CONFLICT OR VIOLATION. Neither the execution and delivery of this
            Agreement  by  Buyer  and  Wavetech  nor  the  consummation  of  the
            transactions  contemplated  hereby,  nor  compliance  by  Buyer  and

                                       11
<PAGE>
            Wavetech  with any of the  provisions  hereof,  will (a)  violate or
            conflict with any provision of the organizational  documents of such
            corporations,  (b) violate,  conflict with, or result in a breach of
            any provision  of, or constitute a default (or an event which,  with
            notice or lapse of time or both,  would constitute a default) under,
            or  result in the  termination  of, or  accelerate  the  performance
            required  by, or result in a right of  termination  or  acceleration
            under, or result in the creation of any Encumbrance  upon any of the
            assets  of  any  of  the  terms,  conditions  or  provisions  of any
            contract,  Permit,  agreement, or other instrument or obligation (i)
            to which  either  Buyer or  Wavetech  is a party or (c)  violate any
            statute, rule, regulation, ordinance, code, order, judgment, ruling,
            writ,  injunction,  decree or award or (d) impose  any  Encumbrance,
            restriction or charge on the  respective  businesses of Wavetech and
            Buyer.

     5.7    LITIGATION.  There are no Actions pending, or to the best of Buyer's
            and Wavetech's  knowledge,  threatened or  anticipated  (a) against,
            related  to or  affecting  Buyer or  Wavetech  or  their  respective
            businesses or (b) seeking to delay, limit or enjoin the transactions
            contemplated  by this  Agreement.  Neither  is not in  default  with
            respect to or subject to any judgment,  order,  writ,  injunction or
            decree  of any  court  or  governmental  agency,  and  there  are no
            unsatisfied  judgments  against Buyer,  Wavetech or their respective
            properties and assets.

     5.8    COMPLIANCE  WITH LAW.  The conduct of the  business of each of Buyer
            and Wavetech has not  violated and is in  compliance  with all laws,
            statutes, ordinances,  regulations, rules and orders of any foreign,
            federal,  provincial or local government and any other  governmental
            department or agency, and any judgment, decision, decree or order of
            any  court  or   governmental   agency,   department  or  authority,
            including,  without limitation,  environmental laws, relating to the
            business  or  operations  of  such  corporation,  except  where  the
            violation or failure to comply,  individually  or in the  aggregate,
            would not have a Material  Adverse  Effect on the business of either
            Buyer or Wavetech. The conduct of the business of Buyer and Wavetech
            is in conformity with all energy, public utility,  zoning,  building
            and health codes, regulations and ordinances, and environmental laws
            and all other foreign, federal,  provincial,  and local governmental
            and regulatory  requirements,  except where any nonconformity  would
            not have a Material Adverse Effect on their  respective  businesses.
            Neither  Buyer or  Wavetech  has  received  any notice to the effect
            that, or otherwise  been advised that, it is not in compliance  with
            any such statutes,  regulations,  rules, judgments, decrees, orders,
            ordinances or other laws,  and such  corporations  have no reason to
            anticipate that any existing  circumstances  are likely to result in
            violations  of  any  of  the  foregoing,   which  non-compliance  or
            violation  could,  in  any  one  case  or in the  aggregate,  have a
            Material Adverse Effect on their respective businesses.

     5.9    GST.  Buyer  represents and warrants that it is a GST registrant for
            the purpose of the Excise Tax Act. Buyer agrees to provide  evidence
            of the same on or before the Closing Date.

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<PAGE>
                                   ARTICLE VI

                    COVENANTS OF SELLER , BUYER AND WAVETECH

            Buyer, Seller and Wavetech each covenant with the others as follows:

     6.1    FURTHER  ASSURANCES.  Upon the terms and  subject to the  conditions
            contained herein, each of the parties hereto agrees, both before and
            after the Closing,  (i) to use all  reasonable  efforts to take,  or
            cause to be taken,  all actions and to do, or cause to be done,  all
            things  necessary,  proper  or  advisable  to  consummate  and  make
            effective the transactions  contemplated by this Agreement,  (ii) to
            execute any documents,  instruments or conveyances of any kind which
            may be  reasonably  necessary  or  advisable to carry out any of the
            transactions  contemplated  hereunder,  and (iii) to cooperate  with
            each other in connection  with the foregoing,  including using their
            respective  best  efforts  (A)  to  obtain  all  necessary  waivers,
            consents and  approvals  from other  parties to the  Contracts to be
            assumed  by  Buyer;  provided,  however,  that  Buyer  shall  not be
            required  to make  any  payments,  commence  litigation  or agree to
            modifications  of the  terms  thereof  in order to  obtain  any such
            waivers,  consents or approvals, (B) to obtain all necessary Permits
            as are required to be obtained under any federal,  provincial, local
            or  foreign  law  or  regulations,   (C)  to  effect  all  necessary
            registrations and filings,  including without limitation submissions
            of information  requested by  governmental  authorities,  and (D) to
            fulfill all conditions to this Agreement.

     6.2    NOTIFICATION  OF CERTAIN  MATTERS.  From the date  hereof  until the
            Closing,  each party  hereto  shall give prompt  notice to the other
            parties of (a) the  occurrence,  or  failure to occur,  of any event
            which   occurrence   or  failure   would  be  likely  to  cause  any
            representation  or warranty  contained  in this  Agreement or in any
            exhibit  or  schedule  hereto  to be  untrue  or  inaccurate  in any
            material  respect and (b) any failure of Seller,  Wavetech or Buyer,
            or any of  their  respective  shareholders  or  Representatives,  to
            comply with or satisfy any  covenant,  condition  or agreement to be
            complied with or satisfied by it under this Agreement or any exhibit
            or schedule hereto;  provided,  however,  that such disclosure shall
            not be deemed  to cure any  breach  of a  representation,  warranty,
            covenant or agreement or to satisfy any condition.

     6.3    CONDUCT OF BUSINESS.  From the date hereof  until the Closing,  each
            party hereto shall,  except as  contemplated by this Agreement or as
            consented to by either  Buyer,  Wavetech or Seller,  as the case may
            be, in writing,  operate their respective businesses in the ordinary
            course of the business and  substantially  in  accordance  with past
            practice  and  will  not  take any  action  inconsistent  with  this
            Agreement or with the consummation of the Closing.

            6.3.1   Without  limiting the  generality of the  foregoing,  Seller
                    shall  not,  except  as  specifically  contemplated  by this
                    Agreement:

                    6.3.1.1   enter into, extend,  materially modify,  terminate
                              or renew  any  Contract,  except  in the  ordinary
                              course of the business; or

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<PAGE>
                    6.3.1.2   sell, assign,  transfer,  convey, lease, mortgage,
                              pledge or otherwise  dispose of or encumber any of
                              the  Products  or  Accounts,   or  any   interests
                              therein,  except  in the  ordinary  course  of the
                              business.

            6.3.2   Without  limiting the generality of the  foregoing,  neither
                    Buyer   nor   Wavetech   shall,   except   as   specifically
                    contemplated by this Agreement:

                    6.3.2.1   issue any additional shares of capital stock;

                    6.3.2.2   sell, assign,  transfer,  convey, lease, mortgage,
                              pledge or otherwise  dispose of or encumber any of
                              the  assets  of  such  company,  or  any  interest
                              therein, except in the ordinary cause of business;
                              or

                    6.3.2.3   amend any of its organizational documents,  except
                              in the case of  Buyer's  organizational  documents
                              which shall be amended to provide for the issuance
                              of the Buyer Preferred Stock.

     6.4    JOINT ELECTION. The Buyer and Seller agree that:

            6.4.1   in respect of the  transfer  of the  Products  and  Accounts
                    contemplated by this agreement, they shall jointly elect, in
                    prescribed  form and within the  prescribed  time  therefor,
                    under  subsection  85(1) of the Income Tax Act (Canada) (the
                    "Act");

            6.4.2   subject to the  immediately  succeeding  clause,  the amount
                    agreed on in such election (the "Elected  Amount")  shall be
                    determined   by  the   Seller  in  its  sole  and   absolute
                    discretion;

            6.4.3   the  Elected  Amount  shall  not be less  than  the  minimum
                    amount,  nor greater than the maximum amount,  permitted for
                    such purpose under the rules in section 85 of the Act;

            6.4.4   subject to  subsection  85(7.1)  of the Act,  the Seller and
                    Purchaser  shall,  if requested  by the Seller,  execute and
                    file an amended election,  in the prescribed form and within
                    the prescribed time therefor,  under subsection 85(1) of the
                    Act, and the Seller shall pay any penalty or fee  associated
                    with the filing of such amended election.

     6.5    RIGHT OF FIRST REFUSAL.  Seller  hereby grants Wavetech the right of
            first refusal with respect to any sale by Seller of any intellectual
            property of Seller, including,  without limitation,  any copyrights,
            trademarks,    service   marks,   trade   names,   patents,   patent
            applications,  trade  secret and mask work  rights and source  code.
            This right of first  refusal  shall also  include any sale of all or
            substantially   all  of   Seller's   business   or  the   merger  or
            consolidation  of Seller  (whether  or not  Seller is the  surviving
            entity).  Further,  Seller  hereby  agrees  to  immediately  provide
            Wavetech  with access to the source code of any of the  intellectual
            property in the event of the liquidation,  dissolution or winding up
            of Seller's  business.  Upon Wavetech  receiving written notice from

                                       14
<PAGE>
            Seller  of a  proposed  sale to a third  party  buyer,  including  a
            certified  true copy of the proposed Sale  Contract,  Wavetech shall
            have thirty (30) calendar days in which to elect to submit to Seller
            a matching  contract upon the same terms and  conditions as that set
            out in the  certified  true copy of the Sale  Contract  provided  by
            Seller  to  Wavetech.   If  Wavetech  shall  fail  or  refrain  from
            submitting  such a  matching  contract  within the  prescribed  time
            period,  Seller shall be free to complete the Sale Contract with the
            third party buyer.

     6.6    REGISTRATION  UNDERTAKING.  Wavetech  hereby agrees to promptly file
            after  Closing  a  registration   statement  on  Form  S-3  (or  any
            appropriate  successor  form) for the  purpose  of  registering  the
            shares of Wavetech  Common  Stock to be issued in  exchange  for the
            Buyer  Preferred  Stock.  Wavetech agrees to use such efforts as are
            reasonably   necessary   to  obtain   the   effectiveness   of  such
            registration statement with the Securities and Exchange Commission.

                                       15
<PAGE>
                                   ARTICLE VII

                       CONDITIONS TO SELLER'S OBLIGATIONS

         The obligations of Seller to consummate the  transactions  provided for
hereby are subject,  in the  discretion of Seller,  to the  satisfaction,  on or
prior to the Closing Date, of each of the following conditions, any of which may
be waived by Seller:

     7.1    CONSENTS.  All Permits and waivers  necessary to the consummation of
            the  transactions  contemplated  hereby and for the operation of the
            business by Buyer and Wavetech (including,  without limitation,  (a)
            all required  third party  consents;  (b) all required  approvals of
            Buyer's and  Wavetech's  lenders,  if any;  and (c) the  approval of
            Buyer's and Wavetech's Board of Directors) shall have been obtained.

     7.2    OPINION OF COUNSEL.  Buyer shall have delivered to Seller an opinion
            of  counsel  to Buyer,  dated as of the  Closing  Date,  in form and
            substance reasonably satisfactory to Seller, to the effect that:

            7.2.1   INCORPORATION.  Each of Buyer  and  Wavetech  has been  duly
                    incorporated  and is validly  existing and in good  standing
                    under the laws of its  jurisdiction  of  incorporation.  The
                    capitalization of each of Buyer and Wavetech is as set forth
                    in Section 5.3.1 or 5.3.2 of this Agreement;

            7.2.2   CORPORATE  POWER AND  AUTHORITY.  Each of Buyer and Wavetech
                    have the  necessary  corporate  power and authority to enter
                    into  this  Agreement  and to  consummate  the  transactions
                    contemplated hereby;

            7.2.3   CORPORATE ACTION. The execution, delivery and performance of
                    this  Agreement  have been duly  authorized by all necessary
                    corporate  action of Buyer and Wavetech,  and this Agreement
                    has been duly  executed and delivered by Buyer and Wavetech.
                    Buyer shall have  amended its  organizational  documents  to
                    provide for the issuance of the Buyer Preferred  Stock.  The
                    shares  of  Wavetech  Common  Stock  upon  Closing  shall be
                    immediately  exchangeable  for the  Buyer  Preferred  Stock,
                    subject to the terms of this  Agreement,  the Share Exchange
                    Agreement and compliance with applicable securities laws;

            7.2.4   OBLIGATION OF BUYER AND WAVETECH. This Agreement constitutes
                    a  legally  valid  and  binding   obligation  of  Buyer  and
                    Wavetech,   enforceable   against   Buyer  and  Wavetech  in
                    accordance  with  its  terms,   except  as  limited  by  (i)
                    bankruptcy, insolvency, reorganization,  moratorium or other
                    similar laws relating to creditors'  rights  generally or by
                    equitable principles (whether considered in an action at law
                    or in  equity),  (ii)  limitations  imposed  by  federal  or
                    applicable  provincial law or equitable  principles upon the
                    availability of specific  performance,  injunctive relief or
                    other   equitable   remedies,   or  (iii)  other   customary
                    limitations reasonably satisfactory to Seller's counsel;

                                       16
<PAGE>
            7.2.5   NO  BREACH.  Neither  the  execution  and  delivery  of this
                    Agreement by Buyer and Wavetech, nor the consummation of the
                    transactions   contemplated   hereby  will  (i)  violate  or
                    conflict with any provision of the organizational  documents
                    of Buyer or Wavetech, (ii) breach, or cause a default under,
                    any term or provision of any material  contract  listed on a
                    schedule to such opinion to which contract Buyer or Wavetech
                    is a party or by which their respective assets are bound, or
                    (iii)  violate any  judgment,  decree,  injunction,  writ or
                    order applicable to Buyer or Wavetech;

            7.2.6   NO  PERMITS  REQUIRED.  No Permit  of, or filing  with,  any
                    governmental  authority  or, to the best  knowledge  of such
                    counsel, any other person, is required for the execution and
                    delivery  of this  Agreement  by Buyer or  Wavetech,  or the
                    consummation  by  Buyer  or  Wavetech  of  the  transactions
                    contemplated  hereby,  except as set forth in this Agreement
                    or the schedules or exhibits hereto;

            7.2.7   NO ACTIONS PENDING. Except as set forth in this Agreement or
                    the schedules hereto, to the best knowledge of such counsel,
                    no Action is  pending or  threatened  (i)  against  Buyer or
                    Wavetech,  (ii)  against any of the officers or directors of
                    Buyer or Wavetech as such,  (iii) in which Buyer or Wavetech
                    is a  plaintiff,  or (iv) which  questions  the  validity or
                    legality of the transactions contemplated hereby;

            7.2.8   NO VIOLATION OF LAW.  Neither the  execution and delivery of
                    this Agreement by Buyer or Wavetech, nor the consummation of
                    the transactions  contemplated hereby will violate or result
                    in a failure to comply  with any  statute,  law,  ordinance,
                    regulation,  rule or order  of any  federal,  provincial  or
                    local  government  or any other  governmental  department or
                    agency,  or any  judgment,  decree  or order  of any  court,
                    applicable to Buyer or Wavetech;

            7.2.9   SHARE EXCHANGE AGREEMENT. The Share Exchange Agreement to be
                    delivered by Buyer and Wavetech has been duly  authorized by
                    all necessary corporate action of Buyer and Wavetech and the
                    shares of Buyer Preferred Stock are immediately exchangeable
                    for shares of Wavetech  Common Stock subject to the terms of
                    this Agreement and  compliance  with  applicable  securities
                    laws.

            7.2.10  ELIGIBILITY TO FILE REGISTRATION STATEMENT.  Wavetech Common
                    Stock is  registered  under the  Securities  Exchange Act of
                    1934 and all periodic reports required  thereunder have been
                    filed; such Common Stock is currently  qualified for trading
                    on the National Association of Securities Dealers (NASD) OTC
                    Bulletin  Board; and  such  Common  Stock  is  eligible  for
                    registration  on Form  S-3 (on a resale  basis  and not as a
                    primary issuer) pursuant to the provisions of Section 6.6 of
                    the Agreement.

                                       17
<PAGE>
          In  rendering  such  opinions,  such  counsel  may rely as to  factual
     matters upon  certificates  and assurances of public officials and officers
     of Buyer and  Wavetech.  In addition,  such opinions may be subject to such
     additional  qualifications  and exceptions as are reasonably  acceptable to
     counsel to Seller.

     7.3    CERTIFICATES.  Buyer and  Wavetech  shall  furnish  Seller with such
            certificates of its officers and others to evidence  compliance with
            the  conditions  set forth in this Article VII as may be  reasonably
            requested by Seller.

     7.4    CORPORATE  DOCUMENTS.  Seller shall have received from each of Buyer
            and Wavetech certified copies of resolutions adopted by its board of
            directors approving this Agreement and the transactions contemplated
            hereby.

     7.5    BUYER  PREFERRED  STOCK.  As of the  Closing  Date each share of the
            Buyer  Preferred  Stock  shall  be  exchangeable  for one  share  of
            Wavetech Common Stock. As of the Closing Date,  Buyer,  Wavetech and
            Seller  shall have  entered  into a Share  Exchange  Agreement  with
            respect to the Buyer  Preferred  Stock in the form of  Exhibit  "E".
            Buyer  shall  have paid the  Purchase  Price to Seller in the manner
            prescribed by Section 2.4.1 and the Share Exchange  Agreement  shall
            have been executed and delivered by the parties  thereto  confirming
            Seller's  unqualified right to immediately  exchange if, as and when
            determined by Seller,  in its sole  discretion,  the Buyer Preferred
            Stock  received  by Seller in payment of the  Purchase  Price for an
            equal number of duly  authorized,  validly issued and fully paid and
            non-assessable Wavetech Common Shares.

                                       18
<PAGE>
                                  ARTICLE VIII

                        CONDITIONS TO BUYER'S OBLIGATIONS

     THE OBLIGATIONS OF BUYER TO CONSUMMATE THE TRANSACTIONS PROVIDED FOR HEREBY
ARE SUBJECT TO THE SELLER'S  FULFILLMENT  OF THE  FOLLOWING  CONDITIONS,  TO THE
SATISFACTION  OF BUYER,  ON OR PRIOR TO THE  CLOSING  DATE,  ANY OF WHICH MAY BE
WAIVED BY BUYER:

     8.1    REPRESENTATIONS,  WARRANTIES AND COVENANTS.  All representations and
            warranties of Seller  contained in this Agreement  shall be true and
            correct  in all  material  respects  at and as of the  date  of this
            Agreement  and at and as of the Closing  Date,  except as and to the
            extent that the facts and conditions upon which such representations
            and warranties  are based are expressly  required or permitted to be
            changed by the terms  hereof,  and Seller shall have  performed  and
            satisfied  all  agreements  and  covenants  required  hereby  to  be
            performed by it prior to or on the Closing Date.

     8.2    CONSENTS.  All Permits and waivers  necessary to the consummation of
            the  transactions  contemplated  hereby and for the operation of the
            Business by Buyer (including,  without limitation,  (a) all required
            third party consents to the  assignment of the Assumed  Contracts to
            be assumed by Buyer; (b) all required  approvals of Buyer's lenders,
            if any; and (c) the approval of Seller's  Board of Directors)  shall
            have been obtained.

     8.3    NO  PROCEEDINGS  OR  LITIGATION.   No  Action  by  any  governmental
            authority or other person shall have been  instituted  or threatened
            which  questions  the  validity  or  legality  of  the  transactions
            contemplated hereby and which could reasonably be expected to damage
            Buyer  materially  if  the  transactions   contemplated  hereby  are
            consummated,  including  without  limitation  any  Material  Adverse
            Effect on the right or ability of Buyer to own, operate,  possess or
            transfer the Products or Accounts after the Closing. There shall not
            be any statute,  rule or regulation that makes the purchase and sale
            of the Products or Accounts contemplated hereby illegal or otherwise
            prohibited.

     8.4    OPINION OF COUNSEL.  Seller shall have delivered to Buyer an opinion
            of counsel  to Seller,  dated as of the  Closing  Date,  in form and
            substance reasonably satisfactory to Buyer, to the effect that:

            8.4.1   INCORPORATION.  Seller  has been  duly  incorporated  and is
                    validly  existing and in good standing under the laws of the
                    Province of Ontario, Canada;

            8.4.2   CORPORATE POWER AND AUTHORITY.  The Seller has the necessary
                    corporate  power and authority to enter into this  Agreement
                    and to consummate the transactions  contemplated  hereby and
                    to own,  lease and operate the  Products or Accounts and its
                    other  properties  and to conduct the  Business as presently
                    conducted;

            8.4.3   CORPORATE ACTION. The execution, delivery and performance of
                    this  Agreement  have been duly  authorized by all necessary
                    corporate action of Seller, and this Agreement has been duly

                                       19
<PAGE>
                    executed  and  delivered  by Seller;  the  approval  of this
                    Agreement  by the  stockholders  of  Seller  has  been  duly
                    obtained  in  accordance  with the  provisions  of  Seller's
                    organizational documents and applicable law;

            8.4.4   OBLIGATION OF SELLER.  This Agreement  constitutes a legally
                    valid and binding obligation of Seller,  enforceable against
                    Seller in  accordance  with its terms,  except as limited by
                    (i) bankruptcy,  insolvency,  reorganization,  moratorium or
                    other similar laws relating to creditors'  rights  generally
                    or by equitable  principles (whether considered in an action
                    at law or in equity), (ii) limitations imposed by federal or
                    applicable  provincial law or equitable  principles upon the
                    availability of specific  performance,  injunctive relief or
                    other   equitable   remedies,   or  (iii)  other   customary
                    limitations reasonably satisfactory to Buyer's counsel;

            8.4.5   NO  BREACH.  Neither  the  execution  and  delivery  of this
                    Agreement   by   Seller,   nor  the   consummation   of  the
                    transactions   contemplated   hereby  will  (i)  violate  or
                    conflict with any provision of the organizational  documents
                    of Seller,  (ii) breach,  or cause a default under, any term
                    or provision of any material  contract  listed on a schedule
                    to such  opinion to which  contract  Seller is a party or by
                    which the Products or Accounts are bound,  or (iii)  violate
                    any judgment, decree,  injunction,  writ or order applicable
                    to Seller;

            8.4.6   NO  PERMITS  REQUIRED.  No Permit  of, or filing  with,  any
                    governmental  authority  or, to the best  knowledge  of such
                    counsel, any other person, is required for the execution and
                    delivery of this Agreement by Seller, or the consummation by
                    Seller of the transactions  contemplated  hereby,  except as
                    set forth in this  Agreement  or the  schedules  or exhibits
                    hereto;

            8.4.7   NO ACTIONS PENDING. Except as set forth in this Agreement or
                    the schedules hereto, to the best knowledge of such counsel,
                    no Action is pending or threatened (i) against Seller or the
                    Products or Accounts or the  Business,  (ii)  against any of
                    the officers or directors of Seller as such,  (iii) in which
                    Seller is a plaintiff,  or (iv) which questions the validity
                    or legality of the transactions contemplated hereby;

            8.4.8   NO VIOLATION OF LAW.  Neither the  execution and delivery of
                    this  Agreement  by  Seller,  nor  the  consummation  of the
                    transactions contemplated hereby will violate or result in a
                    failure  to  comply  with  any  statute,   law,   ordinance,
                    regulation,  rule or order  of any  federal,  provincial  or
                    local  government  or any other  governmental  department or
                    agency,  or any  judgment,  decree  or order  of any  court,
                    applicable  to  Seller  or the  Business;  and,  to the best
                    knowledge  of  such   counsel,   Seller  has  all  licenses,
                    franchises  and other  authority  required  to  conduct  the
                    Business as it is now being conducted;

                                       20
<PAGE>
            8.4.9   TRANSFER AND  ASSIGNMENT.  The  documents to be delivered by
                    Seller at the Closing to effect the transfer and  assignment
                    to Buyer of all  right,  title  and  interest  in and to the
                    Products or Accounts are effective to do so,  subject to (i)
                    the  effects  of  bankruptcy,  insolvency,   reorganization,
                    moratorium  or other  similar  laws  relating to  creditors'
                    rights   generally   and   equitable   principles   (whether
                    considered  in  an  action  at  law  or  in  equity),   (ii)
                    limitations   imposed  by  federal  or  provincial   law  or
                    equitable  principles  upon  the  availability  of  specific
                    performance,  injunctive relief or other equitable remedies,
                    or (iii) other customary limitations reasonably satisfactory
                    to Buyer's counsel;

     In rendering  such  opinions,  such counsel may rely as to factual  matters
upon  certificates and assurances of public officials and officers of Seller. In
addition,  such opinions may be subject to such  additional  qualifications  and
exceptions as are reasonably acceptable to counsel to Buyer.

     8.5    CERTIFICATES.  Seller shall furnish Buyer with such  certificates of
            its officers and others to evidence  compliance  with the conditions
            set forth in this  Article  VIII as may be  reasonably  requested by
            Buyer.

     8.6    CONVEYANCING DOCUMENTS;  RELEASE OF ENCUMBRANCES.  Seller shall have
            executed and  delivered  each of documents  described in Section 3.2
            hereof so as to effect the transfer and  assignment  to Buyer of all
            right,  title and  interest in and to the  Products or Accounts  and
            Seller shall have filed (where necessary) and delivered to Buyer all
            documents  necessary  to release the  Products or Accounts  from all
            Encumbrances,   which  documents  shall  be  in  a  form  reasonably
            satisfactory to Buyer's counsel.

     8.7    MATERIAL CHANGES.  Since the date of the Balance Sheet,  there shall
            not have  been any  Material  Adverse  Change  with  respect  to the
            Business or the Products or Accounts.

     8.8    CORPORATE DOCUMENTS.  Buyer   shall  have   received   from   Seller
            resolutions  adopted  by its  board of  directors  and  shareholders
            approving this Agreement and the transactions contemplated hereby.

     8.9    DUE DILIGENCE REVIEW.  Buyer and its Representatives  shall have the
            right to  conduct  a due  diligence  review  of  Seller's  Books and
            Records, Financial Statements, and other records and accounts of the
            Business,  operations,   equipment,   properties  and  in  the  sole
            discretion  of Buyer,  Buyer shall be satisfied on the basis of such
            review  that  there has been no breach  of the  representations  and
            warranties or the  pre-closing  covenants of Seller made pursuant to
            this Agreement.  Such review shall have no effect  whatsoever on the
            liability of Seller to Buyer under this  Agreement or otherwise  for
            breach of any representations, warranties, or covenants of Seller or
            hereunder.

                                       21
<PAGE>
                                   ARTICLE IX

                      RISK OF LOSS; CONSENTS TO ASSIGNMENT

     9.1    RISK OF LOSS. From the date hereof through the Closing,  all risk of
            loss or damage to the property  included in the Products or Accounts
            shall be borne by Seller, and thereafter shall be borne by Buyer. If
            any portion of the  Products or Accounts is  destroyed or damaged by
            fire or any other cause on or prior to the Closing,  other than use,
            wear or loss in the ordinary  course of the  Business,  Seller shall
            give written notice to Buyer as soon as practicable  after discovery
            of such  damage or  destruction,  the amount of  insurance,  if any,
            covering  such  Products or Accounts and the amount,  if any,  which
            Seller is otherwise  entitled to receive as a consequence.  Prior to
            the Closing,  Buyer shall have the option,  which shall be exercised
            by  written  notice to Seller  within ten (10)  calendar  days after
            receipt of Seller's notice or if there is not ten (10) calendar days
            prior to the Closing,  as soon as practicable  prior to the Closing,
            of (a)  accepting  such  Products or Accounts in their  destroyed or
            damaged  condition  in which  event  Buyer  shall be entitled to the
            proceeds of any insurance or other proceeds  payable with respect to
            such loss and to such  indemnification  for any uninsured portion of
            such loss  pursuant to Section  10.3,  and the full  Purchase  Price
            shall be paid for such  Products or  Accounts,  (b)  excluding  such
            Products  or  Accounts  from  this  Agreement,  in which  event  the
            Purchase  Price  shall be reduced by the  amount  allocated  to such
            Products or Accounts,  as mutually agreed between the parties or (c)
            terminating this Agreement in accordance with Section 11.1. If Buyer
            accepts  such  Products or  Accounts,  then after the  Closing,  any
            insurance or other proceeds shall belong,  and shall be assigned to,
            Buyer without any reduction in the Purchase Price;  otherwise,  such
            insurance proceeds shall belong to Seller.

     9.2    CONSENTS TO  ASSIGNMENT.  Anything in this Agreement to the contrary
            notwithstanding, this Agreement shall not constitute an agreement to
            assign any Contract,  lease, license, sales order, purchase order or
            any claim or right or any benefit  arising  thereunder  or resulting
            therefrom if an attempted assignment thereof, without the consent of
            a third party thereto,  would  constitute a breach thereof or in any
            way adversely affect the rights of Buyer thereunder. If such consent
            is not  obtained,  or if an attempted  assignment  thereof  would be
            ineffective  or would  affect  the rights  thereunder  so that Buyer
            would not receive all such rights, Seller will cooperate with Buyer,
            in all reasonable  respects,  to provide to Buyer the benefits under
            any such Contract,  lease,  license,  sales order,  purchase  order,
            claim or right  including  without  limitation  enforcement  for the
            benefit  of Buyer of any and all  rights of  Seller  against a third
            party  thereto  arising  out of the breach or  cancellation  by such
            third party or otherwise.

                                       22
<PAGE>
                                   ARTICLE IX

                      ACTIONS BY SELLER, BUYER AND WAVETECH
                                AFTER THE CLOSING

     10.1   BOOKS AND RECORDS; PAYMENT OF LIABILITIES.

            10.1.1  COOPERATION  AND  RECORDS  RETENTION.   Seller,   Buyer  and
                    Wavetech   shall  (i)  each  provide  the  other  with  such
                    assistance as may  reasonably be requested by any of them in
                    connection  with the  preparation of any return,  audit,  or
                    other  examination  by any taxing  authority  or judicial or
                    administrative  proceedings relating to liability for Taxes,
                    (ii) each  retain and  provide the other with any records or
                    other information that may be relevant to such return, audit
                    or examination,  proceeding or determination, and (iii) each
                    provide the other with any final  determination  of any such
                    audit or  examination,  proceeding,  or  determination  that
                    affects any amount required to be shown on any tax return of
                    the other for any period. Without limiting the generality of
                    the foregoing, Buyer, Seller and Wavetech shall each retain,
                    until the applicable statutes of limitations  (including any
                    extensions)  have  expired,   copies  of  all  tax  returns,
                    supporting work schedules,  and other records or information
                    that may be relevant to such  returns for all tax periods or
                    portions  thereof  ending on or before the Closing  Date and
                    shall not destroy or  otherwise  dispose of any such records
                    without  first  providing  the other party with a reasonable
                    opportunity to review and copy the same.

     10.2   SURVIVAL OF  REPRESENTATIONS,  ETC. All statements  contained in any
            certificate,  schedule,  exhibit, instrument or conveyance delivered
            by or on behalf of the  parties  pursuant  to this  Agreement  or in
            connection with the transactions contemplated hereby shall be deemed
            to be representations  and warranties by the parties hereunder.  The
            representations,  warranties,  covenants  and  agreements of Seller,
            Buyer and Wavetech  contained  herein shall survive the consummation
            of the  transactions  contemplated  hereby  and  the  Closing  Date,
            without  regard  to any  investigation  made  by any of the  parties
            hereto.   Except   as   provided   in  this   sentence,   all   such
            representations  and  warranties and all claims and causes of action
            with respect  thereto (other than the provisions of Section 4.11 and
            this Section 10.2,  and all claims and causes of action with respect
            thereto)  shall  terminate  upon  expiration  of two years after the
            Closing Date.  The  representations  and  warranties in Section 4.11
            shall survive  until the  expiration  of the  applicable  statute of
            limitations  (with extensions) with respect to the matters addressed
            in  such  section.   The  termination  of  the  representations  and
            warranties provided herein shall not affect the rights of a party in
            respect of any Claim made by such party in a writing received by the
            other  party  prior to the  expiration  of the  applicable  survival
            period provided herein.

     10.3   INDEMNIFICATIONS.

            10.3.1  BY SELLER. Regardless of Seller's knowledge of the existence
                    of an indemnifiable  event, Seller shall indemnify,  defend,
                    save  and  hold   harmless   Buyer,   its   Affiliates   and
                    subsidiaries,  and its respective Representatives,  from and
                    against  any  and  all  claims,   damages,   costs,   losses
                    (including without limitation  diminution in value),  Taxes,

                                       23
<PAGE>
                    liabilities,   judgments,   penalties,  fines,  obligations,
                    lawsuits, deficiencies, demands and expenses (whether or not
                    arising  out  of  third-party  claims),   including  without
                    limitation interest, lost profits and other losses resulting
                    from any shutdown or curtailment  of operations,  damages to
                    the  environment,  attorneys'  fees,  experts'  fees and all
                    amounts paid in investigation,  defense or settlement of any
                    of the foregoing (herein, "Damages"), incurred in connection
                    with,  arising out of, resulting from or incident to (i) any
                    breach of any  representation  or warranty  in any  material
                    respect,   or  the  inaccuracy  of  any   representation  or
                    warranty,  made by Seller in or pursuant to this  Agreement;
                    (ii) any breach of any covenant or agreement  made by Seller
                    in  or  pursuant  to  this  Agreement;  (iii)  any  Excluded
                    Liability;  or (iv)  any  liability  imposed  upon  Buyer by
                    reason of Buyer's  status as  transferee  of the Products or
                    Accounts.

            10.3.2  BUYER AND  WAVETECH.  Regardless  of Buyer's  or  Wavetech's
                    knowledge of the existence of an indemnifiable  event,  each
                    of Buyer and Wavetech shall indemnify, defend, save and hold
                    harmless  Seller,  its  subsidiaries,   and  its  respective
                    Representatives,  from  and  against  any and  all  Damages,
                    incurred in connection with,  arising out of, resulting from
                    or  incident  to (i) any  breach  of any  representation  or
                    warranty in any material  respect,  or the inaccuracy of any
                    representation or warranty,  made by Buyer or Wavetech in or
                    pursuant  to this  Agreement;  or  (ii)  any  breach  of any
                    covenant  or  agreement  made by  Buyer  or  Wavetech  in or
                    pursuant  to  this  Agreement;   or  (iii)  the  failure  or
                    inability of Wavetech to  effectively  register the Wavetech
                    Common  Shares  to be issued  to Buyer in  exchange  for the
                    Buyer  Preferred  Stock  pursuant to this  Agreement and the
                    Share Exchange Agreement.

            10.3.3  COOPERATION.  The  indemnified  party shall cooperate in all
                    reasonable  respects  with the  indemnifying  party and such
                    attorneys  in the  investigation,  trial and defense of such
                    lawsuit  or  action  and  any  appeal   arising   therefrom;
                    provided,  however,  that the indemnified  party may, at its
                    own  cost,  participate  in  the  investigation,  trial  and
                    defense of such  lawsuit  or action  and any appeal  arising
                    therefrom.  The parties shall  cooperate  with each other in
                    any notifications to insurers.

            10.3.4  DEFENSE OF CLAIMS.  If a claim for Damages (a "Claim") is to
                    be made by a party  entitled  to  indemnification  hereunder
                    against the  indemnifying  party,  the party  claiming  such
                    indemnification shall, subject to Section 10.2, give written
                    notice (a "Claim Notice") to the indemnifying  party as soon
                    as practicable  after the party entitled to  indemnification
                    becomes aware of any fact, condition or event which may give
                    rise to  Damages  for  which  indemnification  may be sought

                                       24
<PAGE>
                    under this  Section  10.3.  If any  lawsuit  or  enforcement
                    action is filed against any party entitled to the benefit of
                    indemnity  hereunder,  written notice thereof shall be given
                    to the indemnifying party as promptly as practicable (and in
                    any  event  within  fifteen  (15)  calendar  days  after the
                    service of the  citation  or  summons).  The  failure of any
                    indemnified  party to give timely notice hereunder shall not
                    affect rights to  indemnification  hereunder,  except to the
                    extent  that  the  indemnifying  party  demonstrates  actual
                    damage  caused by such  failure.  After such notice,  if the
                    indemnifying  party  shall  acknowledge  in  writing  to the
                    indemnified  party  that  the  indemnifying  party  shall be
                    obligated  under the  terms of its  indemnity  hereunder  in
                    connection   with  such   lawsuit   or   action,   then  the
                    indemnifying  party shall be entitled,  if it so elects, (i)
                    to take  control of the  defense and  investigation  of such
                    lawsuit or action,  (ii) to employ and engage  attorneys  of
                    its own choice (which shall be reasonably  acceptable to the
                    indemnified  party) to handle and  defend  the same,  at the
                    indemnifying party's cost, risk and expense unless the named
                    parties  to such  action  or  proceeding  include  both  the
                    indemnifying   party  and  the  indemnified  party  and  the
                    indemnified  party has been  advised  in  writing by counsel
                    that there may be one or more legal  defenses  available  to
                    such indemnified party that are different from or additional
                    to those available to the  indemnifying  party, and (iii) to
                    compromise  or  settle  such  claim,   which  compromise  or
                    settlement  shall be made only with the  written  consent of
                    the indemnified  party,  such consent not to be unreasonably
                    withheld;   provided,   however,   if  the   remediation  or
                    resolution  of  any  such  Claim  will  occur  on or at  any
                    Facility  or is  reasonably  expected  to  have  a  Material
                    Adverse   Effect  on  the   indemnified   party's   business
                    operations,   then,   notwithstanding  the  foregoing,   the
                    indemnified   party  shall  be  entitled  to  control   such
                    remediation or resolution,  including without  limitation to
                    take  control  of the  defense  and  investigation  of  such
                    lawsuit or action, to employ and engage attorneys of its own
                    choice to handle and defend  the same,  at the  indemnifying
                    party's cost, risk and expense,  and to compromise or settle
                    such Claim.  If the  indemnifying  party fails to assume the
                    defense of such claim  within  fifteen  (15)  calendar  days
                    after receipt of the Claim  Notice,  the  indemnified  party
                    against  which  such  claim  has been  asserted  will  (upon
                    delivering notice to such effect to the indemnifying  party)
                    have the right to  undertake,  at the  indemnifying  party's
                    cost and expense,  the defense,  compromise or settlement of
                    such claim on behalf of and for the  account and risk of the
                    indemnifying  party.  In the  event  the  indemnified  party
                    assumes the defense of the claim, the indemnified party will
                    keep  the  indemnifying  party  reasonably  informed  of the
                    progress of any such defense,  compromise or settlement. The
                    indemnifying party shall be liable for any settlement of any
                    action  effected  pursuant  to and in  accordance  with this

                                       25
<PAGE>
                    Section  10.3 and for any  final  judgment  (subject  to any
                    right of  appeal),  and the  indemnifying  party  agrees  to
                    indemnify  and hold harmless an  indemnified  party from and
                    against  any  Damages  by  reason  of  such   settlement  or
                    judgment.

            10.3.5  LIABILITY AND REMEDIES,  ETC.  Except as set forth below, no
                    individual  Representative  of any party shall be personally
                    liable for any Damages  under the  provisions  contained  in
                    this Section 10.3. Nothing herein shall relieve either party
                    of any liability to make any payment  expressly  required to
                    be made by such party pursuant to this  Agreement.  The term
                    "Damages"  as used in this  Section  10.3 is not  limited to
                    matters  asserted by third parties  against Seller or Buyer,
                    but  includes  Damages  incurred or  sustained  by Seller or
                    Buyer in the  absence of third  party  claims.  Payments  by
                    Buyer of amounts for which Buyer is  indemnified  hereunder,
                    and  payments  by Seller  of  amounts  for  which  Seller is
                    indemnified, shall not be a condition precedent to recovery.
                    Seller's   obligation  to  indemnify   Buyer,   and  Buyer's
                    obligation  to indemnify  Seller,  shall not limit any other
                    rights,  including without limitation rights of contribution
                    which either party may have under statute or common law.

     10.4   FURTHER  ACTION.  After the  Closing,  Seller shall take all actions
            reasonably  necessary  to effect the  conveyance  of the Products or
            Accounts to Buyer free and clear of all  Encumbrances  and otherwise
            required by Buyer's lenders.

                                   ARTICLE XI

                                  MISCELLANEOUS

     11.1   TERMINATION.

            11.1.1  This  Agreement  may be  terminated  at any  time  prior  to
                    Closing:

                    11.1.1.1  By mutual written consent of Buyer and Seller;

                    11.1.1.2  By Buyer or Seller if the  Closing  shall not have
                              occurred on or before October 29, 1999;  PROVIDED,
                              HOWEVER,   that  this   provision   shall  not  be
                              available  to Buyer  if  Seller  has the  right to
                              terminate this Agreement  under Section  11.1.1.4,
                              and  this  provision  shall  not be  available  to
                              Seller if Buyer has the  right to  terminate  this
                              Agreement under Section 11.1.1.3;

                    11.1.1.3  By  Buyer if there  is a  material  breach  of any
                              representation or warranty set forth in Article IV

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<PAGE>
                              hereof or any covenant or agreement to be complied
                              with or performed by Seller  pursuant to the terms
                              of this  Agreement  or the  failure of a condition
                              set forth in  Article  VIII to be  satisfied  (and
                              such  condition is not waived in writing by Buyer)
                              on or prior to the Closing Date, or the occurrence
                              of any event which  results or would result in the
                              failure of a condition  set forth in Article  VIII
                              to be satisfied  on or prior to the Closing  Date,
                              provided  that  Buyer  may  not   terminate   this
                              Agreement  prior to the  Closing if Seller has not
                              had an adequate  opportunity to cure such failure;
                              or

                    11.1.1.4  By  Seller  if there is a  material  breach of any
                              representation  or warranty set forth in Article V
                              hereof  or of  any  covenant  or  agreement  to be
                              complied  with or performed  by Buyer  pursuant to
                              the terms of this  Agreement  or the  failure of a
                              condition set forth in Article VII to be satisfied
                              (and such  condition  is not  waived in writing by
                              Seller) on or prior to the  Closing  Date,  or the
                              occurrence  of any event  which  results  or would
                              result in the failure of a condition  set forth in
                              Article  VII to be  satisfied  on or  prior to the
                              Closing   Date;   PROVIDED  that  Seller  may  not
                              terminate this Agreement prior to the Closing Date
                              if Buyer has not had an  adequate  opportunity  to
                              cure such failure.

            11.1.2  IN THE EVENT OF TERMINATION.  In the event of termination of
                    this Agreement:

                    11.1.2.1  Each  party will  redeliver  all  documents,  work
                              papers  and  other  material  of any  other  party
                              relating to the transactions  contemplated hereby,
                              whether so obtained  before or after the execution
                              hereof, to the party furnishing the same; and

                    11.1.2.2  No  party  hereto  shall  have  any  liability  or
                              further  obligation  to any  other  party  to this
                              Agreement,  except  as stated  in  Sections  11.7,
                              11.10,  11.1.2.1  or this  Section  11.1.2.2,  and
                              except for any  willful  breach of this  Agreement
                              occurring prior to the proper  termination of this
                              Agreement.  The  foregoing  provisions  shall  not
                              limit or  restrict  the  availability  of specific
                              performance  or  other  injunctive  relief  to the
                              extent  that  specific  performance  or such other
                              relief  would  otherwise  be  available to a party
                              hereunder.

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<PAGE>
     11.2   ASSIGNMENT.  Neither  this  Agreement  nor  any  of  the  rights  or
            obligations hereunder may be assigned by any party without the prior
            written consent of the other parties. Subject to the foregoing, this
            Agreement  shall be  binding  upon and inure to the  benefit  of the
            parties  hereto  and  their  respective   successors  and  permitted
            assigns,  and no other  person  shall  have any  right,  benefit  or
            obligation  under this  Agreement  as a third party  beneficiary  or
            otherwise.

     11.3   NOTICES.  All notices,  requests,  demands and other  communications
            which are required or may be given under this Agreement  shall be in
            writing and shall be deemed to have been duly given when received if
            personally  delivered;  when transmitted if transmitted by telecopy,
            electronic or digital transmission method; the day after it is sent,
            if sent for next day  delivery to a domestic  address by  recognized
            overnight  delivery  service  (e.g.,  Federal  Express);   and  upon
            receipt,  if sent by certified or registered  mail,  return  receipt
            requested. In each case notice shall be sent to:

     If to Seller or the Seller Stockholders, addressed to:

            Ms. Rosnani Atani
            Chief Executive Officer
            Softalk, Inc.
            415 Yonge St.
            Toronto, Ontario M5B2E7
            Fax: (416) 597-2785

     With a copy to:

            Shibley Righton
            Barristers & Solicitors
            401 Bay Street, Suite 1900
            Toronto, Ontario M5H 2Z1
            Attn: L. S. Mason
            Fax: (416) 214-5438

     If to Buyer, addressed to:

            Interpretel (Canada) Inc.
            c/o Wavetech International, Inc.
            5210 East Williams Circle
            Suite 200
            Tucson, Arizona 85711
            Attn: Gerald I. Quinn
            Fax: (520) 750-9194

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<PAGE>
     With a copy to:

            Squire, Sanders & Dempsey L.L.P.
            40 North Central Avenue, Suite 2700
            Phoenix, Arizona 85004
            Attention: Gregory R. Hall, Esq.
            Fax: (602) 253-8129

or to such other place and with such other copies as either party may  designate
as to itself by written notice to the others.

     11.4   CHOICE LAW. This Agreement  shall be construed,  interpreted and the
            rights of the parties  determined in accordance with the laws of the
            Province  of  Ontario  (without  reference  to  the  choice  of  law
            provisions   thereof),   except  with  respect  to  matters  of  law
            concerning the internal  corporate  affairs of any corporate  entity
            which  is a party to or the  subject  of this  Agreement,  and as to
            those matters the law of the jurisdiction under which the respective
            entity derives its powers shall govern.

     11.5   ENTIRE AGREEMENT;  AMENDMENTS AND WAIVERS. This Agreement,  together
            with all  exhibits  and  schedules  hereto,  constitutes  the entire
            agreement among the parties  pertaining to the subject matter hereof
            and supersedes all prior  agreements,  understandings,  negotiations
            and  discussions,  whether  oral or written,  of the  parties.  This
            Agreement  may not be  amended  except by an  instrument  in writing
            signed  on  behalf  of each of the  parties  hereto.  No  amendment,
            supplement,  modification  or  waiver  of this  Agreement  shall  be
            binding unless executed in writing by the party to be bound thereby.
            No waiver of any of the provisions of this Agreement shall be deemed
            or shall  constitute a waiver of any other provision hereof (whether
            or not  similar),  nor shall such  waiver  constitute  a  continuing
            waiver unless otherwise expressly provided.

     11.6   MULTIPLE COUNTERPARTS. This Agreement may be executed 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.

     11.7   EXPENSES.  Except as  otherwise  specified in this  Agreement,  each
            party hereto shall pay its own legal, accounting,  out-of-pocket and
            other expenses incident to this Agreement and to any action taken by
            such party in preparation for carrying this Agreement into effect.

     11.8   INVALIDITY.  In the  event  that  any one or more of the  provisions
            contained in this Agreement or in any other  instrument  referred to
            herein,  shall,  for any reason,  be held to be invalid,  illegal or
            unenforceable  in any respect,  then to the maximum extent permitted
            by law, such invalidity,  illegality or  unenforceability  shall not
            affect  any other  provision  of this  Agreement  or any other  such
            instrument.

                                       29
<PAGE>
     11.9   TITLES. The titles,  captions or headings of the Articles,  Sections
            and  subsections  herein are inserted for  convenience  of reference
            only and are not  intended  to be a part of or to affect the meaning
            or interpretation of this Agreement.

     11.10  PUBLICITY; CONFIDENTIALITY. Neither Buyer nor Seller shall issue any
            press release or make any public statement regarding, or disclose to
            any third party  (except as required  by law or legal  process,  and
            except to each  party's  lenders if such  lenders so require) any of
            the terms of, the transactions  contemplated  hereby,  without prior
            written approval of the other party,  provided that Buyer and Seller
            may, if they  mutually  agree,  issue or make an  appropriate  press
            release or public  announcement after the Closing Date. In the event
            that this Agreement is terminated prior to Closing,  Buyer agrees to
            return to Seller  all  correspondence  and  documents  furnished  by
            Seller or its Representatives, and agrees not to disclose or use for
            its own purposes any  confidential  or  proprietary  information  of
            Seller   that  has  been   furnished   to  it  by   Seller   or  its
            Representatives.

     11.11  CUMULATIVE REMEDIES.  All rights and remedies of either party hereto
            are cumulative of each other and of every other right or remedy such
            party may  otherwise  have at law or in equity,  and the exercise of
            one or more rights or  remedies  shall not  prejudice  or impair the
            concurrent or subsequent exercise of other rights or remedies.

     11.12  ARBITRATION.  Any  controversy  arising  after the Closing out of or
            relating to this Agreement (including, without limitation,  pursuant
            to Section 2.5 or 10.3), or relating to the breach hereof,  shall be
            settled by arbitration  conducted in Toronto,  Ontario in accordance
            with the Arbitrations Act (Ontario),  as amended. The award rendered
            by the  arbitrator(s)  shall be final  and  judgment  upon the award
            rendered by the  arbitrator(s)  may be entered  upon it in any court
            having  jurisdiction  thereof.  The arbitrator(s)  shall possess the
            powers  to  issue  mandatory   orders  and  restraining   orders  in
            connection  with such  arbitration.  The expenses of the arbitration
            shall be borne by the losing party unless otherwise allocated by the
            arbitrator(s).  The  agreement  to arbitrate  shall be  specifically
            enforceable  under  the  prevailing   arbitration  law.  During  the
            continuance  of  any  arbitration  proceedings,  the  parties  shall
            continue  to  perform  their  respective   obligations   under  this
            Agreement.

                                       30
<PAGE>
                                   ARTICLE XII

                                   BULK SALES

     12.1   BULK SALES

            12.1.1  BULK SALES.  The parties  acknowledge  that this transaction
                    may be subject to the BULK SALES ACT R.S.O.  1990,  C.B.  14
                    (herein the "BULK SALES ACT"). It is agreed that:

                    12.1.1.1  Seller  shall not be  required to apply to a judge
                              pursuant to section 3(1) of the BULK SALES ACT for
                              an  order  exempting  this  transaction  from  the
                              application of the BULK SALES ACT;

                    12.1.1.2  Seller shall deliver to Buyer,  at or prior to the
                              Closing,  a statement verified by the affidavit of
                              a senior  officer  of Seller in Form 1 to the BULK
                              SALES ACT containing the  information  required by
                              section  4(2) of the  BULK  SALES  ACT  (the  "BSA
                              STATEMENT");

                    12.1.1.3  Buyer  waives   compliance   by  Seller  with  the
                              requirements of the BULK SALES ACT notwithstanding
                              that  the BSA  Statement  may  disclose  that  the
                              claims of the unsecured  trade creditors of Seller
                              exceed  $2,500.00  but only if the  claims  of the
                              secured trade  creditors of Seller do not exceed a
                              total of $2,500.00;

                    12.1.1.4  Seller shall  defend,  indemnify and save harmless
                              Buyer from all claims of the secured and unsecured
                              trade  creditors  of Seller and  covenants  to and
                              agrees  with Buyer that  Seller,  in the  ordinary
                              course of Seller's business, fully pay and satisfy
                              the  claims  of all  such  creditors  owing at the
                              Closing Date. The foregoing notwithstanding, Buyer
                              hereby  agrees  to  cooperate   with  Seller  with
                              respect  to  defending  any  claims  made by third
                              parties with respect to the Bulk Sales Act arising
                              as a result of this Agreement.

                                       31
<PAGE>
     IN WITNESS  WHEREOF,  the  parties  hereto  have  executed  or caused  this
Agreement to be duly executed on their  respective  behalf,  by their respective
officers  hereunto  duly  authorized,  all as of the day and year  first  above
written.

INTERPRETEL (CANADA) INC.


By /s/ Gerald I. Quinn
   ---------------------------
Name: Gerald I. Quinn
Its: President


SOFTALK INC.


By /s/ A. Chris Lang
   ---------------------------
Name: A. Chris Lang
Its: President


WAVETECH INTERNATIONAL, INC.


By /s/ Gerald I. Quinn
   ---------------------------
Name: Gerald I. Quinn
Its: President

                                       32
<PAGE>
                       Exhibits are intentionally omitted





                                       33