PURCHASE AND SALE AGREEMENT

     THIS  PURCHASE AND SALE  AGREEMENT  ("Agreement")  is made and entered into
this 31st day of October 1995,  by and between  AMERICAN  REGISTRATION  SYSTEMS,
INC.,  an Indiana  corporation  ("ARS")  and IMAGE  TECHNOLOGY,  INC.,  a Nevada
corporation ("ITI") on the following terms and conditions:

                                    RECITALS

     A. Christ M. Rousseff ("Rousseff") is an original inventor and owner of two
United States Patents referable to the design and development of digital imaging
and  automated  form  dispensing  machines for the  automation of the process of
issuing and renewing motor vehicle licenses; these patents, previously issued by
the United States Patent and Trademark Office,  more particularly are: 

          1.  Patent  No. 4,970,655  dated  November 13,   1990  (Automatic  Fee
Collecting And Receipt Dispensing System); and

          2. Patent  No. 5,349,534  dated  September 20,  1994  (Automatic  Form
Dispensing System).

     B.  By  written   assignments  in  proper  form,  Rousseff  has  previously
transferred Patent No. 4,970,655 and Patent No. 5,349,534 to ARS.

     C. By Security and Pledge Agreement dated October 26,  1992, ARS previously
pledged to ITI, as security for a $1,250,000  indebtedness,  (1) all of its then
issued  and   outstanding   shares  of  common   capital   stock,   and  (2) the
above-described  Patent No. 4,970,655  together with all ancillary  intellectual
property pertaining  thereto,  including but not limited to all "know-how" trade
secrets, other trade secrets, trade names, trademarks,  and related intellectual
property rights of any and every nature and description.

     D. Subsequent to the execution of the  afore-described  Security and Pledge
Agreement,  ARS defaulted in the payment of the underlying  indebtedness secured
by such Security and Pledge  Agreement,  and pursuant to pledge sale effectuated
in  compliance  with  all  relevant   requirements  of  the  California  Uniform
Commercial Code, ITI became, and now remains, the owner of all ARS stock as well
as  the  hereinabove  described  U.  S.  Patent  No. 4,970,655.   Following  the
aforementioned pledge sale and at the insistence of ITI, ARS executed, in proper
form, a written assignment to ITI of U.S. Patent No. 4,970,655.

     E. As a part of the assignment by Rousseff to ARS of Patent  No. 5,349,534,
the parties entered into a Royalty  Agreement whereby Rousseff is to be paid one
(sent per transaction  during a period  coextensive  with the duration of Patent
No. 4,970,655.

     F. ARS now desires to sell,  assign and  transfer  to ITI all  intellectual
property  rights  appurtenant  or in any way  pertaining to the  above-described
Patent   No. 5,349,534,   and  subject  to  the  Royalty  Agreement  hereinabove
described.

     NOW,  THEREFORE,  in consideration of the agreements and covenants and upon
the conditions set forth herein, the parties agree as follows:  

     1.  Incorporation  By  Reference.  The Recitals set forth  hereinabove  are
incorporated herein as though fully set forth. 

     2. Sale And  Assignment  Of Patent.  Upon full payment by ITI to ARS of the
purchase price hereinbelow described, ARS hereby sells, assigns and transfers to
ITI all right,  title and  interest  in and to U.S.  Patent  No. 5,349,534.  ARS
intends by this sale transaction to accord to ITI all property rights pertaining
to such patent, including without limitation the right to utilize in such manner
as ITI may deem proper or  expedient,  all of the  above-described  intellectual
property rights, including the right to grant exclusive licenses and sublicenses
thereof, and the right to manufacture,  have manufactured,  use and sell any and
all equipment which may be produced under said patent,  in the United States and
such other  Countries or places in the world as ITI may select.  Such use rights
shall include the  entitlement of ITI to license or otherwise  authorize the use
by franchisees,  licensees,  and/or sub-licensees for the remaining term of said
patent.  
<PAGE>

          2.1  Termination  Of Agreement.  This  Agreement and the rights of ITI
thereunder as set forth in 2 immediately hereinabove,  may be terminated only in
accordance with Paragraph 6.1.1 below.

     3. Purchase  Consideration.  In  consideration  for the sale by ARS of U.S.
Patent  No. 5,349,534  to ITI,  ITI  shall  pay to ARS  the sum of Four  Million
Dollars ($4,000,000).  ITI shall pay this purchase  consideration to ARS in cash
on  October 31,   1996.  Upon  written   request   accompanied  by  evidence  of
demonstrated need therefor,  ITI may obtain  reasonable  extensions of this time
for payment of this purchase consideration,  such time for payment,  however, in
no event to extend  beyond May 1,  1997.  In addition to the cash  consideration
above,  ITI agrees  immediately  to assume  all  obligations  under the  Royalty
Agreement  between  Rousseff and ARS. 

     4. Warranty of Patent Rights. ARS hereby represents, covenants and warrants
to ITI that the patents  identified in the Recitals  above have been duly issued
and assigned as hereinabove set forth, and that all proprietary  property rights
pertaining to U.S.  Patent  No. 5,349,534  are  transferable  to ITI without the
consent or approval of any person or entity other than ARS.

          4.1 No  Infringement.  The  use by  ITI of the  intellectual  property
rights  granted  hereunder  will not  infringe  upon any  patent,  trademark  or
proprietary rights of any person or entity other than ARS.

     5.  Prosecution of  Infringement  Actions.  Upon the effective date of this
Agreement,  ARS authorizes ITI to file, and agrees to co-operate with ITI in the
prosecution of, such patent  infringement  and/or trade secret  misappropriation
actions as may be necessary to protect  from  infringement  the patent and other
proprietary rights granted hereunder. ARS agrees to join as a party plaintiff or
provide such other  cooperation  as may be necessary or  reasonably  required to
successfully pursue any such actions.  ITI agrees to pay all such legal fees and
costs which are reasonably and  necessarily  incurred in the pursuit of any such
actions.

     6. Term. This Agreement shall commence and become  effective on the date of
its  execution.  Use,  license and all other rights granted  hereunder  shall be
perpetual,  for the term of U.S. Patent No. 5,349,534 unless terminated pursuant
to Paragraph 6.1 below, or otherwise limited by this Agreement.

          6.1  Termination.  Failure  by ITI to pay the  purchase  consideration
specified in Paragraph 3 hereinabove,  on or after  October 31,  1996, and in no
event later than May 1,  1997, shall  constitute an event of default  subjecting
ITI to termination of all rights under this Agreement,  and shall entitle ARS to
ai immediate re-assignment of U.S. Patent No. 5,349,534. On the occurrence of an
event of default as set forth above, ARS shall send notice of default and demand
for payment to ITI  specifying  the event(s) of default and  notifying  ITI that
failure  to cure any such  default(s)  by  payment  of the full  amount due will
result in termination of the sales  transaction  and all use,  license and other
rights granted to ITI hereunder. Said notice of default shall be sent by Federal
Express,  other  overnight mail delivery  service or by prepaid  first-class US.
Mail, receipt requested, to the address for notice to ITI identified below. Said
notice  of  default  shall  be  deemed  served  on the date of  delivery  to the
overnight  delivery service or date of posting.  ITI shall have thirty (30) days
from the date of service of notice of default in which to cure the  event(s)  of
default  by payment in full of any and all  amounts  due to ARS.  If cure is not
made in such time, the Agreement shall terminate  without further action by ARS.

          6.2  Result  Of  Termination.   If  the  Agreement  is  terminated  in
accordance with the provisions of Paragraph 6.1 above,  ITI shall no longer have
any  right,  title  or  interest  in or to U.S.  Patent  No. 5,349,534,  nor any
entitlement  to use,  license,  or otherwise  utilize such patent  and/or rights
pertaining  thereto in any  respect.  By its  execution of this  Agreement,  ITI
covenants and agrees that after any such  termination and upon written demand by
ARS, ITI will execute and deliver,  in proper form, a written  re-assignment  of
U.S. Patent No. 5,349,534 to ARS or its designee.
<PAGE>

     7. Assignment of Royalty Agreement.  ARS hereby assigns to ITI that certain
Royalty Agreement previously entered into by ARS and Rousseff,  whereby Rousseff
is to be paid one cent per transaction during a period  co-existensive  with the
duration of Patent No. 5,349,534.

          7.1 Covenant of Further  Assurance.  The parties  agree to execute and
deliver,  or cause to be executed and  delivered to the other party,  such other
instruments  and  documents  which may  reasonably  be  requested or required to
effectuate the terms and provisions of this Agreement.

          7.2 Notices. Any notice or document required or permitted to be served
hereunder  by either  party  hereto may be served by mailing the same  postpaid,
first-class  mail to the other party at the party's  last known  address.  Until
otherwise notified, the addresses for the parties hereto for the purpose of such
notice are as follows:

ARS:              American Registration Systems, Inc.
                  4407 Manchester Avenue, Suite 103
                  Encinitas, CA 9202

Rousseff:         Christ M. Rousseff
                  7688 St. Andrews Road
                  San Diego, CA

ITI:              Image Technology, Inc.
                  4407 Manchester Avenue, Suite 103
                  Encinitas, CA 92024

          7.3 Governing Law. This Agreement  shall be interpreted  and construed
in accordance with the laws of the State of California.

          7.4  Entire   Agreement;   Amendments  and  Waivers.   This  Agreement
constitutes  the entire  agreement  between the parties hereto and supersedes in
all respects any prior agreement and  understanding  of the parties  relating to
the  subject  matter  hereof.  No  supplement,  modification  or  waiver  of the
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  hereto  (whether  or not
similar),  nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.

          7.5  Severability.  If any one or more of the provisions  contained in
this Agreement or in any instrument referred to herein shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect,  (i) such provision
will be deemed amended to conform to applicable laws or such  jurisdiction so as
to be valid and  enforceable,  or if it cannot be so amended without  materially
altering the intention of the parties,  it will be stricken,  (ii) the validity,
legality and  enforceability  of such provisions will not in any way be affected
or impaired thereby in any other jurisdiction, (iii) such invalidity, illegality
or  unenforceability  shall not affect any other  provision of this Agreement or
any other such instrument,  and (iv) the remainder of this Agreement will remain
in full force and effect.

          7.6 Headings.  The headings of the Paragraphs  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.

          7.7 No Assignments. This Agreement may not be assigned by operation of
law or otherwise without the written consent of the other party hereto.
<PAGE>

          7.8 Attorneys' Fees. In the event either party hereto brings an action
to enforce or interpret the terms of this Agreement,  the prevailing party shall
be entitled to his or its reasonable  attorneys' fees and court costs reasonably
incurred in connection therewith.

          7.9  Confidentiality.  Each of the parties  hereto  shall  maintain as
confidential,  and shall not disclose to any third party,  any  confidential  or
non-public information concerning the aforementioned  patents,  "know-how" trade
secrets,  other trade secrets and/or intellectual  property or other proprietary
rights appurtenant to the digital imaging and automated form dispensing machines
which constitute the subject of such intellectual  proprietary  rights,  without
the prior  written  consent of the other party  hereto.  Any such  disclosure to
agents,  contractors,  subcontractors  of  and  purchasers  from  ITI  which  is
permitted  with the written  consent of ARS shall be  accompanied by appropriate
confidentiality  or non-disclosure  agreements  executed by any such third party
persons or entities.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed and delivered as of the date and year first above written.

                                        AMERICAN REGISTRATION SYSTEMS,
                                        INC., an Indiana corporation


                                         By:                                    


                                         IMAGE TECHNOLOGY, INC., a Nevada
                                         corporation


                                         By:                                   


                                         By:                                   
<PAGE>

                 ACCEPTANCE OF ASSIGNMENT OF ROYALTY AGREEMENTS

     ITI hereby accepts the assignment by ARS of the two Royalty Agreements with
Rousseff hereinabove  described,  and agrees to be fully bound by and to perform
all terms, conditions and covenants thereof for the benefit of Rousseff.

                                          IMAGE TECHNOLOGY, INC., a Nevada
                                          corporation


                                          By:                                   






                   CONSENT TO ASSIGNMENT OF ROYALTY AGREEMENTS

     Rousseff  hereby  consents  to the  assignment  to ITI of his  two  Royalty
Agreements with ARS. AMERICAN REGISTRATION SYSTEMS, INC., an Indiana corporation


                                           By:                                  
                                               CHRIST M. ROUSSEFF