Document:

EXHIBIT 4(a)

                          INVESTMENT ADVISORY AGREEMENT

      INVESTMENT ADVISORY  AGREEMENT,  made the 1st day of May, 1996, as amended
May 1, 1997 with respect to the Money  Market Fund,  May 1, 1999 with respect to
the Equity Index Fund and  September 1, 2000 with respect to the Mid-Cap  Equity
Index Fund and the  Aggressive  Equity  Fund,  by and between  Mutual of America
Capital  Management  Corporation (the "Adviser"),  a Delaware  corporation,  and
Mutual  of  America  Institutional  Funds,  Inc.  (the  "Company"),  a  Maryland
corporation.

                               W I T N E S S E T H

      WHEREAS,  the  Company is engaged in business  as a  diversified  open-end
management  investment  company and is registered  as such under the  Investment
Company Act of 1940, as amended (the "Investment Company Act");

      WHEREAS,  the Company is  comprised of separate  series or funds,  each of
which pursues its investment objective through separate investment policies, and
the Board of Directors may from time to time  establish or terminate one or more
funds;

      WHEREAS,  the Adviser  renders  advisory  services and is registered as an
investment adviser under the Investment Advisers Act of 1940; and

      WHEREAS,  the Company  desires to retain the Adviser to render  investment
advisory and supervisory services and corporate administration to the Company in
the manner and on the terms hereinafter set forth;

      NOW THEREFORE,  in consideration of the premises and the mutual agreements
herein contained, the Adviser and the Company agree as follows:

1.  General.  For the period and on the terms set forth in this  Agreement,  the
Adviser  shall  manage  the  investment  and  reinvestment  of the assets of the
existing  funds of the  Company,  namely the All America Fund and the Bond Fund,
and of any additional  funds created in the future  (collectively,  the existing
and any additional  funds are hereinafter  referred to as "Funds").  The Adviser
agrees during such period,  at its own expense and subject to the supervision of
the Board of  Directors  of the  Company,  to  render  the  investment  advisory
services  and assume the  obligations  herein  set forth,  for the  compensation
provided by this Agreement.

      The Adviser is authorized to enter into  sub-advisory  agreements  (each a
"Sub-Advisory  Agreement" and collectively the  "Sub-Advisory  Agreements") with
registered  investment  advisers  (each a  "Sub-Adviser"  and  collectively  the
"Sub-Advisers")  pursuant to which the Adviser delegates to the Sub-Advisers its
obligations  for providing  investment  advisory and certain  other  services in
connection with one or more of the Funds;  provided,  that the Adviser,  and not
the  Company,  shall be  responsible  for any  compensation  payable  under  the
Sub-

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                                      -2-

Advisory Agreements.  Any such Sub-Advisory Agreement may be entered into by the
Adviser on such terms and in such manner as may be permitted  by the  Investment
Company Act and the rules and regulations thereunder. For any Fund for which the
Adviser has entered into a Sub-Advisory  Agreement,  the Sub-Adviser  shall have
the primary  responsibility  for providing  investment  advisory services as set
forth in Paragraph  2(a),(b) and (c) and shall be responsible for  broker-dealer
selection as set forth in Paragraph 4 and  maintaining  books and records as set
forth in Paragraph 9, and the Adviser will have supervisory  responsibility  for
investment  advisory  services  furnished  by the  Sub-Adviser  pursuant  to the
Sub-Advisory  Agreement.  The  Adviser  will  review  the  performance  of  each
Sub-Adviser  and make  recommendations  to the Board of Directors of the Company
with respect to the retention and renewal of Sub-Advisory Agreements.

2. Investment  Advisory Services.  (a) In carrying out its obligations to manage
the investment and reinvestment of the assets of the Company,  the Adviser shall
as appropriate  and  consistent  with the  limitations  set forth in Paragraph 3
hereof:

      (i)   perform  research  and  obtain  and  evaluate  pertinent   economic,
            statistical  and financial data relevant to the investment  policies
            of each of the Funds as set forth in the then effective registration
            statement   for  the   Company,   as  amended   from  time  to  time
            ("Registration  Statement"),  filed with the Securities and Exchange
            Commission (the "SEC");

      (ii)  consult  with the Board of  Directors  of the Company and furnish to
            the Board of Directors of the Company  recommendations  with respect
            to an overall  investment  plan for each of the Funds for  approval,
            modification or rejection by the Board of Directors of the Company;

      (iii) determine the  composition  of the assets of each Fund and implement
            specific  investment  and sale  opportunities,  consistent  with any
            overall  investment  plans approved by the Board of Directors of the
            Company;

      (iv)  take such steps as are necessary to implement any overall investment
            plans  approved by the Board of Directors of the Company,  including
            making  and  carrying  out   decisions  to  acquire  or  dispose  of
            permissible  investments,  management of  investments,  cash and any
            other  property of the Company,  and  providing  or  obtaining  such
            services as may be necessary in managing,  acquiring or disposing of
            investments;

      (v)   regularly  report  to the Board of  Directors  of the  Company  with
            respect to the  implementation  of any approved  overall  investment
            plans and any other  activities in connection with management of the
            assets of the Company; and

      (vi)  maintain all required accounts, records, memoranda,  instructions or
            authorizations   relating  to  the  acquisition  or  disposition  of
            investments for each Fund.

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                                      -3-

      (b) In connection  with the purchase and sale of securities for each Fund,
the Adviser will arrange for the transmission to the custodian,  transfer agent,
dividend  disbursing  agent  and/or  recordkeeping  agent  for  the  Fund  (such
custodian  and  agent  or  agents  hereinafter  referred  to as the  "Agent"  or
collectively the "Agents"), on a daily basis, such confirmations,  trade tickets
(which shall state  industry  classifications  unless the Adviser has previously
furnished  a list  of  classifications  for  portfolio  securities),  and  other
documents and information, including, but not limited to, Cusip or other numbers
that  identify  securities  to be  purchased or sold on behalf of each Fund and,
with respect to mortgage derivative and asset-backed securities purchased by the
Adviser for a Fund, 1066Q reports and supplemental information as required to be
available  pursuant  to  Internal  Revenue  Service  requirements,   as  may  be
reasonably  necessary  to enable the Agent to  perform  its  administrative  and
recordkeeping  responsibilities  with  respect  to such  Fund.  With  respect to
portfolio  securities  to be  purchased  or sold  through the  Depository  Trust
Company,  the  Adviser  will  arrange  for  the  automatic  transmission  of the
confirmation of such trades to the Company's Agent.

      (c) If the Company has arranged for the valuation of Fund securities to be
performed by an Agent,  the Adviser will monitor on a daily basis,  by review of
daily pricing reports provided by the Agent to the Adviser, the determination by
the Agent of the valuation of portfolio securities and other investments of each
Fund.  The Adviser  shall not be obligated to  independently  verify the Agent's
pricing  determinations,  and the Agent's  responsibility  for accurate  pricing
determinations  of the value of each Fund's  securities  shall not be reduced by
the Adviser's duty to monitor such  determinations.  The Adviser will assist the
Agent in determining or confirming,  consistent with the procedures and policies
stated in the Registration  Statement,  the value of any portfolio securities or
other  assets  of each  Fund  for  which  the  Agent  seeks  assistance  from or
identifies for review by the Adviser.

      (d) The Adviser shall provide all the office space, facilities, equipment,
material and personnel necessary to fulfill its obligations under this Agreement
and shall provide management services to the Company as follows:

      (i)   coordinate  all matters  relating to the  functions of the Company's
            Agents,  accountants,  attorneys,  Sub-Advisers,  if any,  and other
            parties performing services or operational functions for the Funds;

      (ii)  provide, without remuneration from or other cost to the Company, the
            services of a sufficient number of individuals  competent to perform
            all  of  the  Company's   executive,   administrative  and  clerical
            functions  as  are  necessary  to  ensure  compliance  with  federal
            securities  laws as well as other  applicable  laws  and to  provide
            effective  supervision and administration of the Company,  when such
            services are not  performed by employees or other agents  engaged by
            the Company pursuant to a separate agreement or arrangement with the
            Company;

      (iii) assist  in  the   preparation   of  all  periodic   reports  to  the
            shareholders of the Company and all reports and filings  required to
            maintain the registration and qualification of

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                                      -4-

            the  Company's   shares,   or  to  meet  other   regulatory  or  tax
            requirements  applicable  to the  Company,  under  federal and state
            securities and tax laws;

      (iv)  prepare and, after approval by the Company, file and arrange for the
            distribution  of proxy  materials  and  periodic  reports to Company
            shareholders as required by applicable law;

      (v)   prepare,  or cause the  preparation  of, and,  after approval by the
            Company,  arrange for the filing of such registration statements and
            other documents with the SEC and other federal and state  regulatory
            authorities as may be required by applicable law; and

      (vi)  take such other action with respect to the Funds,  after approval by
            the Company, as may be required by applicable law, including without
            limitation  the  rules  and  regulations  of the  SEC  and of  state
            securities commissions and other regulatory agencies.

3.  Limitations  on Advisory  Services.  The  Adviser  shall  render  investment
advisory  services  with  respect to assets held by the Funds of the Company and
effect all purchases and sales of investments  for each Fund thereof in a manner
consistent with:

      (a) the investment objectives,  policies and restrictions for each Fund as
stated in the Registration Statement;

      (b) the Rules and Regulations of the Company;

      (c) the  provisions  of the  Investment  Company  Act and  the  rules  and
regulations thereunder; and

      (d) the qualification of each Fund as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended.

      Any  investment  program  undertaken  by  the  Adviser  pursuant  to  this
Agreement  shall at all  times be  subject  to any  directives  of the  Board of
Directors  of the  Company  or any duly  constituted  committee  thereof  acting
pursuant to like authority.

4.  Brokerage  and  Research  Services.   The  Adviser  shall,  subject  to  the
supervision of the Board of Directors of the Company,  arrange for the placement
of orders for each of the  Funds,  either  directly  with the  issuer,  with any
broker-dealer  or underwriter  that  specializes in the securities for which the
order is made,  or with any  other  broker or dealer  selected  by the  Adviser,
subject to the following limitations.

      The  Adviser  is  authorized  to select the  brokers or dealers  that will
execute the purchases and sales of portfolio  securities  for the Funds and will
use its best  efforts to obtain the most

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                                      -5-

favorable net results,  taking into account all appropriate  factors,  including
price,  dealer  spread  or  commission,  if  any,  size of the  transaction  and
difficulty  of  execution.  However,  in  addition to seeking the best price and
execution, the Adviser may also take into consideration research and statistical
information and wire and other quotation  services  provided to the Adviser.  In
any event,  the Adviser shall select only brokers whose  commissions it believes
are reasonable.  The Adviser will  periodically  evaluate the statistical  data,
research and other  investment  services  provided by brokers and dealers to it.
Such services may be used by the Adviser in connection  with the  performance of
its  obligations  under this  Agreement  or in  connection  with other  advisory
activities or  investment  operations.  In accordance  with Section 11(a) of the
Securities Exchange Act of 1934 and Rule 11a2-2('I') thereunder,  and subject to
any  other  applicable  laws  and  regulations  including  Section  17(e) of the
Investment  Company  Act and Rule 17e-1  thereunder,  the Adviser may engage its
affiliates,  or any Sub-Adviser to the Company and its respective affiliates, as
broker-dealers or futures commission merchants to effect portfolio  transactions
in securities and other investments for a Fund.

5.  Compensation.  As compensation for its investment  advisory  services to the
Company, the Adviser shall receive an amount calculated as a daily charge at the
annual rate of 0.125% of the value of the net assets of each of the Equity Index
Fund and Mid-Cap Equity Index Fund,  0.50% of the value of the net assets of the
All America Fund, 0.85% of the value of the net assets of the Aggressive  Equity
Fund,  0.45% of the  value of the net  assets  of the Bond Fund and 0.20% of the
value of the net assets of the Money Market Fund,  computed in  accordance  with
the Investment Company Act and the Registration Statement.

6. Expenses.  (a) The Adviser shall be responsible for all expenses  incurred in
performing the  investment  advisory and  management  services  herein set forth
(other than costs and expenses  payable by any  Sub-Adviser  under a Subadvisory
Agreement),  including  costs of  compensating  and furnishing  office space for
officers and employees of the Adviser  connected  with  investment  and economic
research,  trading and  investment  management for the Funds and expenses of all
Company  personnel  other than the fees and  expenses of  directors  who are not
"interested persons" of the Company.

      (b) Each Fund is  responsible  for and bears all expenses  incurred in its
operation  that are not  specifically  assumed  by the  Adviser  or by Mutual of
America Securities  Corporation pursuant to its Distribution  Agreement with the
Company.  General expenses of the Company not readily  identifiable as belonging
to one of the Funds will be allocated  among the Funds by or under the direction
of the Company's  Board of Directors in such manner as the Board shall determine
to be fair and  equitable.  Expenses  borne by each  Fund  include,  but are not
limited to, the following (or the Fund's allocated share of the following):

      (i)   the cost  (including  brokerage  commissions,  if any) of securities
            purchased or sold by the Fund and any losses  incurred in connection
            therewith;

      (ii)  investment  advisory fees due hereunder (but not Sub-Advisory  fees,
            which are payable by the Adviser);

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                                      -6-

      (iii)  filing  fees  and  expenses   relating  to  the   registration  and
             qualification  of the Company or the shares of a Fund under federal
             or state  securities laws and maintenance of such  registration and
             qualifications;

      (iv)   fees and expenses  payable to the  Company's  Directors who are not
             "interested persons" of the Company;

      (v)    taxes  (including  any  transfer,  income or  franchise  taxes) and
             governmental fees;

      (vi)   costs of any liability,  directors'  and  officers',  uncollectible
             items of deposit and other insurance and of fidelity bonds;

      (vii)  legal, accounting and auditing expenses;

      (viii) charges of custodians,  transfer  agents,  recordkeeping  and other
             agents;

      (ix)   expenses of setting in type and providing to the distributor of the
             Fund's shares a  camera-ready  copy of the Company's  prospectuses,
             statements of additional information,  and supplements thereto, and
             expenses of setting in type and printing or  otherwise  reproducing
             prospectuses,  statements  of additional  information,  supplements
             thereto, and reports and proxy materials for existing shareholders;

      (x)    fees,   voluntary   assessments  and  other  expenses  incurred  in
             connection with membership in investment company organizations;

      (xi)   costs of meetings of shareholders; and

      (xii)  extraordinary expenses.

      (c) In the  event  the  expenses  of  the  Company  for  any  fiscal  year
(including  the fees  payable to the  Adviser  but  excluding  interest,  taxes,
brokerage  commissions  and  litigation and  indemnification  expenses and other
extraordinary  expenses  not incurred in the  ordinary  course of the  Company's
business) exceed the lowest applicable annual expense limitation established and
enforced pursuant to the statute or regulations of any applicable jurisdictions,
the compensation due the Adviser hereunder will be reduced by the amount of such
excess.  If such excess amount exceeds the  compensation  payable to the Adviser
hereunder,  the Adviser will not be required to make any additional  payments to
the Company in reimbursement of such expenses.

7. Services Not Exclusive. The services rendered by the Adviser pursuant to this
Agreement  are not to be deemed  exclusive,  and the Adviser may render  similar
services to other  entities so long as its services under this Agreement are not
impaired or interfered with.

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                                      -7-

      It is understood that the Adviser or its affiliates may use any investment
research obtained for the benefit of the Company in providing  investment advice
to its other  investment  advisory  accounts  or for use in  managing  their own
accounts. Conversely, such supplemental information obtained by the placement of
business  for the  Company  or other  entities  advised  by the  Adviser  may be
considered  by and may be useful to the Adviser in carrying out its  obligations
to the Company.

      When the  Adviser  deems the  purchase  or sale of a security to be in the
best interests of a Fund as well as other accounts or companies,  it may, to the
extent permitted by applicable laws and  regulations,  but will not be obligated
to, aggregate the securities to be sold or purchased for such Fund with those to
be sold or  purchased  for  other  accounts  or  companies  in order  to  obtain
favorable execution and low brokerage commissions.  In that event, allocation of
the  securities  purchased  or sold,  as well as the  expenses  incurred  in the
transaction,  will be made by the Adviser in the manner it  considers to be most
equitable and  consistent  with its fiduciary  obligations to the Company and to
such other accounts or companies. The Company recognizes that in some cases this
procedure may adversely affect the size of the position obtainable for it.

8. Term of Agreement.  This  Agreement will continue for two years from the date
of its  execution  and  thereafter  from  year to year  but only so long as such
continuance is specifically approved with respect to each Fund at least annually
either  (i) by the  Board of  Directors  of the  Company  or (ii) by a vote of a
majority of the  outstanding  voting  securities  of the Fund,  provided that in
either event such continuance will also be approved by the vote of a majority of
the  directors  who are not  interested  persons (as  defined in the  Investment
Company Act) of the Company,  cast in person at a meeting called for the purpose
of voting on such  approval.  In connection  with such  approvals,  the Board of
Directors  of the Company  shall  request and  evaluate,  and the Adviser  shall
furnish,  such information as may be reasonably  necessary to evaluate the terms
of this Agreement. This Agreement:

      (a) shall not be terminated by the Adviser without the prior approval of a
new  investment  advisory  agreement  by vote of a majority  of the  outstanding
shares of each Fund of the Company;

      (b) shall be subject to  termination,  without the payment of any penalty,
by the  Board of  Directors  of the  Company,  or by vote of a  majority  of the
outstanding shares of the Company,  or with respect to a particular Fund by vote
of a majority  of the  outstanding  shares of that  Fund,  in each case on sixty
days' written notice to the Adviser;

      (c) shall not be amended  without  specific  approval of such amendment by
(i) the Board of Directors  of the Company,  or by the vote of a majority of the
outstanding shares of each Fund affected by such amendment,  and (ii) a majority
of those members of the Board of Directors of the Company who are not parties to
this  Agreement  or  interested  persons  of such a party,  cast in  person at a
meeting called for the purpose of voting on such approval; and

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                                      -8-

      (d) shall  automatically  terminate upon  assignment (as defined under the
Investment Company Act) by either party.

9.  Recordkeeping.  The  Adviser  shall  keep the  Company's  books and  records
required  to be  maintained  by it pursuant to this  Agreement,  the  Investment
Company Act or otherwise.  The Adviser agrees that all accounts and records that
it  maintains  for the Company  shall be the property of the Company and that it
will  surrender  promptly to the  designated  officers of the Company any or all
such accounts and records upon request.  The Adviser  further agrees to preserve
for the  period  prescribed  by the  rules and  regulations  of the SEC all such
records and accounts as are required to be maintained pursuant to said rules and
regulations.  The  Adviser  also agrees  that it will  maintain  all records and
accounts  regarding  the  investment  activities  of  each  of  the  Funds  in a
confidential  manner.  All such  accounts  or records  shall be made  available,
within five (5) business days of a written request, to the Company's accountants
or auditors during regular business hours at the Adviser's offices. In addition,
the Adviser will provide any materials as are required to be maintained pursuant
to said rules and regulations. The Adviser also agrees that it will maintain all
records and accounts  reasonably  related to the  investment  advisory  services
provided hereunder,  as may reasonably be requested in writing by the members of
the Board of Directors of the Company or as may be required by any  governmental
agency having jurisdiction over the Adviser or the Company.

10. Interested and Affiliated Persons. It is understood that members,  officers,
employees  or agents of the  Company  may also be  interested  in the Adviser as
directors, officers, employees, agents or otherwise.

11. Liability of the Adviser. In the absence of willful misfeasance,  bad faith,
gross  negligence or reckless  disregard of obligations or duties on the part of
the Adviser (or its officers, directors, agents, employees, controlling persons,
and any other person or entity  affiliated with the Adviser or retained by it to
perform or assist in the performance of its obligations  under this  Agreement),
neither the  Adviser nor any of its  officers,  directors,  employees  or agents
shall be subject to liability to the Company or any  shareholder  of the Company
for any act or omission in the course of, or connected with,  rendering services
hereunder, including without limitation, any error of judgment or mistake of law
or for any loss  suffered  by the Company or any  shareholder  of the Company in
connection  with the  matters to which  this  Agreement  relates,  except to the
extent specified in Section 36(b) of the Investment  Company Act concerning loss
resulting  from a breach  of  fiduciary  duty with  respect  to the  receipt  of
compensation for services.

12. Use of Name "Mutual of America";  Marks or Symbols. If the Adviser ceases to
act as the investment  adviser,  or, in any event, if the Adviser so requests in
writing, the Company agrees it will take all necessary action to change the name
of the  Company  to a name not  including  the words  "Mutual of  America".  The
Adviser may from time to time make  available  without charge to the Company for
its use such marks or symbols owned or employed by the Adviser  including  marks
or symbols containing the name "Mutual of America" or any variation thereof,  as
it may consider  appropriate.  Any such marks or symbols so made  available will
remain  the  Adviser's

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                                      -9-

property  and it shall have the right,  upon notice in writing  to,  require the
Company to cease the use of such marks or symbols at any time.

13. Governing Law. This Agreement is subject to the provisions of the Investment
Company Act, as amended,  and the rules and  regulations of the SEC  thereunder,
including such exemptions therefrom as the SEC may grant. Words and phrases used
herein  shall be  interpreted  in  accordance  with that Act and those rules and
regulations,  and  such  exemptions.  Without  limiting  the  generality  of the
foregoing,  (a) the term "assignment" shall not include any transaction exempted
from Section 15(a)(4) of the Investment  Company Act by an order of the SEC, and
(b) as used with respect to the Company or any of its Funds,  the term "majority
of the outstanding shares" means the lesser of (i) 67% of the shares represented
at a meeting at which more than 50% of the outstanding  shares are  represented,
or (ii) more than 50% of the outstanding shares.

14. Miscellaneous. The Adviser shall submit to all regulatory and administrative
bodies having  jurisdiction  over the  operations of the Adviser or the Company,
present or future, any materials,  reasonably related to the investment advisory
services provided  hereunder,  as may be reasonably  requested in writing by the
Board of  Directors  of the Company or as may be  required  by any  governmental
agency having jurisdiction.

      IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Investment
Advisory Agreement to be signed by their duly authorized officers as of the date
first above written.

MUTUAL OF AMERICA                              MUTUAL OF AMERICA CAPITAL
 INSTITUTIONAL FUNDS, INC.                      MANAGEMENT CORPORATION

By:                                            By:
   -----------------------------------            ------------------------------
        Dolores J. Morrissey                           Richard J. Ciecka
        President and Chairman                         President and CEOJanuary 21, 2000

Brocker Technology Group Ltd.
1103 Toronto Dominion Tower
10088 - 102 Avenue
Edmonton, Alberta
T5J 2Z1

Attention:        Mr. Casey J. O'Byrne
                  Chairman

Dear Mr. O'Byrne:

     Thomson  Kernaghan & Co.  Limited (the  "Agent")  understands  that Brocker
Technology  Group Ltd.  (the  "Corporation")  proposes to issue up to  1,800,000
special  warrants  (the  "Special  Warrants")  at a price of $6.25  per  Special
Warrant  (the  "Special  Warrant  Price")  for  maximum  aggregate  proceeds  of
$11,250,000  (the  "Offering").  We understand  further that the Corporation has
subscribers for 872,000 of such Special  Warrants (the  "President's  Warrants")
representing  an  aggregate  subscription  price  therefore of  $5,450,000  (the
"President's  Offering").  The difference  between the Special  Warrants and the
President's Warrants,  being 928,000 special warrants, shall be deemed to be the
"TK Warrants". The difference between the Offering and the President's Offering,
being $5,800,000, shall be deemed to be the "TK Offering".

     Subject to the terms and conditions set forth below, the Corporation hereby
appoints  the  Agent as the  sole and  exclusive  agent  of the  Corporation  to
solicit,  on a best efforts basis, the TK Warrants,  and the Agent hereby agrees
to act as such  agent.  The  Corporation  agrees  that  the  Agent  is  under no
obligation to purchase any Special Warrants.

Terms and Conditions

     The  terms  and  conditions  relating  to the  purchase  and sale of the TK
Warrants are as follows:

Section 1      Special Warrants.

(1)  The material  attributes and  characteristics of the Special Warrants shall
     be  substantially  as described  herein and shall be issued  pursuant to an
     indenture (the "Special Warrant  Indenture") to be entered into between the
     Corporation and Montreal Trust Company of Canada (the "Trustee").

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                                      -2-

(2)  Subject to the  qualification  below, each Special Warrant will entitle the
     holder thereof to acquire,  without additional payment upon exercise of the
     Special Warrants,  one common share in the capital of the Corporation.  The
     common shares in the capital of the  Corporation  are herein referred to as
     "Shares",  the Shares  issuable upon  exercise of the Special  Warrants are
     referred to herein as "Underlying Common Shares".

(3)  The Special  Warrants will be  exercisable  at any time prior to the expiry
     time (the  "Expiry  Time"),  being the  earlier of (i) 4:00 p.m.  (Edmonton
     time) on the first anniversary of the Closing Date (the "Anniversary Date")
     and 4:00 p.m.  (Edmonton  time) on the fifth  Business Day (defined  below)
     after  the  day  (the   "Qualification   Date")   on  which  the   receipts
     (collectively,  the  "Receipts")  have been issued by all of the applicable
     securities  commissions  (collectively,  the  "Commissions")  for the final
     prospectus  (the  "Prospectus")  to qualify,  among other  securities,  the
     issuance  of the  Underlying  Common  Shares  on  exercise  of the  Special
     Warrants.  For the  purpose  hereof,  "Business  Day"  means any day except
     Saturday, Sunday or a statutory holiday in Edmonton, Alberta.

(4)  In the event  that the  Qualification  Date has not  occurred  by 4:00 p.m.
     (Edmonton  time) on the day that is 120 days  from the  Closing  Date  (the
     "Qualification Deadline"),  each holder of Special Warrants shall, upon the
     voluntary  or  deemed  exercise  of  the  Special  Warrants,   receive  1.1
     Underlying Common Shares for each Special Warrant so exercised.

(5)  If the  Qualification  Date has not  occurred  prior  to the  Qualification
     Deadline,  the Corporation  will continue to use its best efforts to obtain
     the Receipts as soon as possible thereafter.

(6)  Any Special  Warrants which have not been exercised by the Expiry Time will
     be deemed to be  exercised  immediately  prior to the Expiry  Time  without
     further action by the holder thereof.

Section 2      Subscription Amounts.

     At the Time of Closing  (defined  below),  the proceeds of the issue of the
Special Warrants net of the Agent's aggregate  commission  payable hereunder and
Agent's  counsel's  legal fees (the "Net  Proceeds")  will be  delivered  to the
Corporation by the Agent by cheque  payable in accordance  with the direction of
the Corporation of even date herewith.

Section 3      TK Offering.

(1)  The Agent shall offer for sale and sell the TK  Warrants to  purchasers  of
     Special Warrants  ("Purchasers") in Ontario and such jurisdictions  outside
     of Ontario in which the Special Warrants may be lawfully  effected and sold
     (collectively  the  "Qualifying  Jurisdictions")  in  compliance  with  all
     applicable  securities  laws  and in  such a  manner  so as not to  require
     registration  thereof or filing of a prospectus or offering memorandum with
     respect thereto under such laws.

<PAGE>
                                      -3-

     If, in the  opinion of the  Agent,  it is  necessary,  the Agent will form,
     manage and  participate  in a group of  sub-agents to offer and sell the TK
     Warrants as provided for hereunder.  Each sub-agent shall be  appropriately
     registered   under  the  applicable   securities  laws  of  the  Qualifying
     Jurisdiction in which such sub-agent offers and sells the TK Warrants so as
     to  permit  it  to  lawfully  offer  and  sell  the  TK  Warrants  in  such
     jurisdiction. In the event that a selling group is formed, the Agent will:

     (a)  Manage  the  selling  group  as  and to the  extent  customary  in the
          securities industry in Canada; and

     (b)  Require  each  member  of the  selling  group to offer and sell the TK
          Warrants on the terms set forth in this Agreement.

(2)  The  Corporation  agrees to pay to the  Agent a  commission  (the  "Agent's
     Commission") equal to 7% of the gross aggregate proceeds of the TK Offering
     and 3.5% of the President's Offering.  Additionally,  the Corporation shall
     issue  to  the  Agent  an  option  (the   "Agent's   Special   Option")  in
     substantially the form attached as Schedule 3(2)(a) hereto to acquire,  for
     no  additional  consideration,  a further  option  (the  "Agent's  Option")
     substantially in the form attached as Schedule 3(2)(b).  The Agent's Option
     will entitle the Agent to acquire 200,000 Shares (each an "Agent's  Share",
     collectively the "Agent's  Shares") at an exercise price of $6.25 per Share
     for a period of two years from the Closing Date. The Agent's  Commission is
     payable and the Agent's  Special Option is to be issued by the  Corporation
     at the Time of Closing in  consideration  of the services to be rendered by
     the Agent in connection with the Offering, which services shall include:

     (a)  Acting  as agent of the  Corporation  to  solicit,  on a best  efforts
          basis, offers to purchase the TK Warrants;

     (b)  Assisting in the preparation of the preliminary  prospectus in respect
          of  the   Underlying   Common  Shares  and  the  Agent's  Option  (the
          "Preliminary  Prospectus")  and  the  Prospectus,  together  with  any
          documents  supplemental  thereto  or  any  amending  or  supplementary
          prospectus  or other  supplemental  documents or any similar  document
          (collectively the "Supplementary Material") required to be filed under
          the legislation of any Qualifying Jurisdiction;

     (c)  Assisting in the preparation of the form of Subscription Agreements to
          be entered into by the Corporation and each of the Purchasers; and

     (d)  Advising the Corporation with respect to the private  placement of the
          Special Warrants.

The Corporation  hereby agrees to qualify the issue of the Agent's Option in the
Prospectus.

<PAGE>
                                      -4-

Section 4      Representations of the Corporation.

     The  Corporation  represents and warrants to the Agent and the  Purchasers,
and  acknowledges  that the  Agent  and the  Purchasers  are  relying  upon such
representations and warranties, as follows:

     (a)  The  Corporation  is, and will at the Time of Closing  be, a reporting
          issuer in good  standing  under the  securities  laws of  Ontario  and
          Alberta and is in compliance with the by-laws, rules and regulation of
          The Toronto Stock  Exchange (the  "Exchange")  and no material  change
          relating to the  Corporation  has  occurred  within the past 24 months
          with respect to which the  requisite  material  change  report has not
          been  filed and no such  disclosure  has been  made on a  confidential
          basis;

     (b)  The  Corporation  has full corporate  power and authority to undertake
          the  Offering,  to  obtain  the  Receipts  and  carry  out  all  other
          transactions  contemplated  herein, in the Special Warrant  Indenture,
          Special  Warrants,  the Subscription  Agreements,  the Agent's Special
          Option and the Agent's Option (collectively, the "Documents");

     (c)  As at January  21,  2000 the  authorized  capital  of the  Corporation
          consists of an unlimited  number of Shares and an unlimited  number of
          preferred shares issuable in series,  of which 15,137,467  Shares have
          been duly  authorized and issued and are outstanding as fully paid and
          non-assessable at the date hereof;

     (d)  The  Corporation  has no associates  (as defined in the Securities Act
          (Ontario) (the "Ontario Act") or subsidiaries  ("Subsidiaries")  other
          than as set out in Schedule 4(b);

     (e)  The  Corporation  is the  direct or  indirect  legal,  beneficial  and
          registered  holder of all of the issued and outstanding  shares of all
          of the  Subsidiaries,  except as otherwise  set out in Schedule  4(b),
          free and clear of all mortgages,  liens,  charges,  pledges,  security
          interests,  encumbrances,  claims or  demands  and no  person  has any
          agreement  or option or right or  privilege  (whether  pre-emptive  or
          contractual)  capable of becoming an agreement for the purchase of all
          or any part of such  securities,  and all such  securities  have  been
          validly issued and are outstanding as fully paid and non-assessable.

     (f)  The Corporation and each of the Subsidiaries  possess and will possess
          all material certificates,  authority,  permits and licenses issued by
          the appropriate  state,  provincial,  municipal or federal  regulatory
          agencies or bodies  necessary  to conduct the business now operated by
          such entity and such entity has not received any notice of proceedings
          relating to the revocation or  modification  of any such  certificate,
          authority,  permit or license which,  if unfavourably  decided,  would
          materially   and  adversely   affect  the  conduct  of  the  business,
<PAGE>
                                      -5-

          operations,  financial  condition,  income or future  prospects of the
          Corporation taken as a whole;

     (g)  All press releases,  material change reports and other documents filed
          by or on behalf of the Corporation  within the past 24 months with the
          Commissions  or the  Exchange  were true and  correct in all  material
          respects  and  did  not  contain  any  misrepresentation,  as  at  the
          respective dates of such filings;

     (h)  The  Corporation  is not party to and has not granted  any  agreement,
          warrant,   option  or  right  or  privilege  capable  of  becoming  an
          agreement, for the purchase, subscription or issuance of any Shares or
          preferred  shares or securities  convertible  into or exchangeable for
          Shares or  preferred  shares,  other  than  agreements,  warrants  and
          options disclosed in the Financial Statements (as defined below) or as
          set out in Schedule 4(h);

     (i)  Each of the  Documents  has been,  or will at the Time of Closing  be,
          duly  authorized,  and  with  respect  to each of the  Documents  duly
          executed,  delivered by the Corporation  and  enforceable  against the
          Corporation in accordance with its terms;

     (j)  The  entering  into  of  and  the  performance  of  the   transactions
          contemplated  herein  and in the other  Documents,  including  but not
          limited to, the offering and sale in the Qualifying  Jurisdictions  of
          the Special Warrants and the Underlying Common Shares and the granting
          of the Agent's Special Option and the Agent's Option:

          (i)       does  not  require  the  consent,  approval,  authorization,
                    registration or  qualification  of or with any  governmental
                    entity, stock exchange,  securities  regulatory authority or
                    other third  party,  except (a) such as have been  obtained,
                    and (b) such as may be  required  (and shall be  obtained as
                    provided  in this  Agreement)  under  applicable  securities
                    legislation; or

          (ii)      Will  not  contravene  any  statute  or  regulation  of  any
                    governmental  authority  which is binding on the Corporation
                    or any Subsidiary; and

          (iii)     Will not result in the breach of, or be in conflict with, or
                    constitute  a  default  under,  or  create  a state of facts
                    which,  after  notice  or  lapse of  time,  or  both,  would
                    constitute a default under (a) any indenture, mortgage, deed
                    of trust,  lease, other agreement or instrument to which the
                    Corporation,  any  of  its  Subsidiaries  or  any  of  their
                    properties  is bound,  (b) the  constating  documents of the
                    Corporation or any of its Subsidiaries, (c) any statute, any
                    judgment,  decree, order, rule or regulation of any court or
                    other governmental entity or any arbitrator,  stock exchange
                    or  securities   regulatory   authority  applicable  to  the
                    Corporation or any of its  Subsidiaries or (d) any of its or
                    its

<PAGE>
                                      -6-

                    Subsidiaries  properties  or  assets,  which  could  have  a
                    material  adverse  effect  on the  condition  (financial  or
                    otherwise),  business,  properties,  net worth or results of
                    the Corporation;

     (k)  There are no actions, suits, proceedings,  inquiries or investigations
          pending or, to the best of the  knowledge,  information  and belief of
          the  senior  officers  of  the  Corporation,   threatened  against  or
          affecting  the  Corporation  or any of its  Subsidiaries  at law or in
          equity or before or by any United  States,  New  Zealand,  Australian,
          Canadian  or other  federal,  state,  provincial,  municipal  or other
          governmental department, commission, board, agency or instrumentality,
          domestic  or  foreign,  which  may in any way  materially  affect  the
          business, properties or assets of the Corporation;

     (l)  The  audited   annual   consolidated   financial   statements  of  the
          Corporation as at and for the 12 month period ended March 31, 1999 and
          the unaudited  financial  statements of the  Corporation as at and for
          the six month period ended  September 30, 1999,  complete and accurate
          copies of which are attached  hereto as Schedule 4(1),  (collectively,
          the  "Financial  Statements"),  have been prepared in accordance  with
          generally accepted accounting  principles in Canada ("GAAP"),  present
          fairly, the financial position of the Corporation as at March 31, 1999
          and September 30, 1999, respectively, and do not contain any direct or
          implied  statement of a material  fact which is untrue on the dates of
          such  financial  statements and do not omit to state any material fact
          that  is  required  by  GAAP  or by  applicable  law to be  stated  or
          reflected  therein  or  which  is  necessary  to make  the  statements
          contained therein not misleading;

     (m)  Other than the Agent and those  persons  listed in  Schedule  4(m) who
          have acted as agents for the Corporation in respect of the President's
          Warrants, there is no person, firm or corporation acting or purporting
          to act at the  request  of the  Corporation,  who is  entitled  to any
          brokerage  or  finder's  fee  in  connection  with  the   transactions
          contemplated herein;

     (n)  The Corporation and each Subsidiary is duly  incorporated  and validly
          existing under the laws of its  jurisdiction of  incorporation  and is
          current and up-to-date with all filings  required to be made by it and
          has all requisite corporate capacity,  power and authority to carry on
          its business as now conducted by it and as is presently proposed to be
          conducted  by it and to own,  lease and  operate  its  properties  and
          assets and, in the case of the  Corporation,  to execute,  deliver and
          perform its obligations  under the provisions of the Documents and the
          transactions contemplated thereunder;

     (o)  The Corporation and each of the Subsidiaries has filed all tax returns
          required  to be filed by it,  has paid  all  taxes  currently  due and
          payable by it and has paid all assessments and  re-assessments and all
          other governmental  charges,  penalties,  interest and other fines, if
          any,  currently  due and  payable  by it and

<PAGE>
                                      -7-

          which are claimed by any  governmental  entity to be currently due and
          owing and adequate provisions have been made for taxes payable for any
          fiscal  period  ended for which tax returns are not yet required to be
          filed;  there  are  no  agreements,   waivers  or  other  arrangements
          providing  for an  extension of time with respect to the filing of any
          tax return or payment of any tax, governmental charge or deficiency by
          the Corporation or any of the  Subsidiaries  and there are no actions,
          suits,  proceedings,  investigations  or claims  threatened or pending
          against  the  Corporation  or any of the  Subsidiaries  in  respect of
          taxes, governmental charges or assessments.

     (p)  The  Corporation  and each  Subsidiary has conducted and is conducting
          its  respective  businesses in compliance  with all  applicable  laws,
          rules and  regulations  of each  jurisdiction  in which it  carries on
          business and possess all material certificates,  authorities,  permits
          or licences issued by the appropriate  provincial,  state,  municipal,
          federal or other  regulatory  agency or body necessary to carry on the
          business  currently carried on by it, is in compliance in all material
          respects with such certificates, authorities, permits and licences and
          with all laws,  regulations,  tariffs,  rules,  orders and  directives
          material to is operation  and neither the  Corporation  nor any of the
          Subsidiaries  has  received any notice of  proceedings  relating to or
          notice of the  revocation or  modification  of any such  certificates,
          authorities, permits or licences which, singly or in the aggregate, if
          the subject of an  unfavourable  decision,  order,  ruling or finding,
          would  materially  and  adversely  affect the conduct of the business,
          operations,  financial  condition or income of the  Corporation or any
          Subsidiary on a consolidated basis;

     (q)  Other than as disclosed in the Financial  Statements,  the Corporation
          and each of the  Subsidiaries  is the  absolute  legal and  beneficial
          owner of, and has good and  marketable  title to, all of the  material
          assets of the  Corporation  and such  Subsidiary,  as the case may be,
          free of all mortgages,  liens, charges,  pledges,  security interests,
          encumbrances,  claims  or  demands  whatsoever.  No other  rights  are
          necessary for the conduct of the  Corporation's  or the  Subsidiaries'
          business.  There are no restrictions on the ability of the Corporation
          or the  Subsidiaries  to use,  transfer or otherwise  exploit any such
          rights, and neither the Corporation,  nor the Subsidiaries know of any
          claim or basis for a claim that may affect such rights;

     (r)  Except as disclosed otherwise in the Financial Statements:

          (i)       any and all agreements pursuant to which the Corporation and
                    the Subsidiaries  hold their assets are valid and subsisting
                    agreements  in  full  force  and  effect,   enforceable   in
                    accordance with their respective terms;

<PAGE>
                                      -8-

          (ii)      the Corporation and the  Subsidiaries  are not in default of
                    any of the  provisions  of any such  agreements  nor has any
                    such  default  been  alleged  and  such  assets  are in good
                    standing  under the applicable  statutes and  regulations of
                    the jurisdictions in which they are situate;

          (iii)     all  leases   pursuant  to  which  the  Corporation  or  the
                    Subsidiaries  derive  their  interest  in such assets are in
                    good  standing and there has been no default  under any such
                    leases; and

          (iv)      all material  real or other  property  taxes  required to be
                    paid with  respect to such  assets to the date  hereof  have
                    been paid;

     (s)  Neither  the  Corporation  nor  any  of  the   Subsidiaries   has  any
          responsibility or obligation to pay any commission, royalty or similar
          payment to any person with respect to their rights;

     (t)  No order,  ruling or determination  having the effect of or suspending
          the sale or ceasing the trading of securities of the  Corporation  has
          been issued and no proceedings  for this purpose have been  instituted
          or are pending, contemplated or threatened;

     (u)  Except as otherwise disclosed in the Financial Statements:

          (i)       the  Corporation  has not paid or declared any  dividends or
                    incurred  any  material  capital  expenditure  or  made  any
                    commitment therefor;

          (ii)      neither  the  Corporation  nor any of the  Subsidiaries  has
                    incurred any  obligation or  liability,  direct or indirect,
                    contingent  or otherwise,  except in the ordinary  course of
                    business and which is not material; and

          (iii)     neither  the  Corporation  nor any of the  Subsidiaries  has
                    entered into any material transaction;

     (v)  There is not, in the constating documents of the Corporation or in any
          agreement, mortgage, note, debenture, indenture or other instrument or
          document to which the Corporation is a party,  any restriction upon or
          impediment to the issuance of the Special Warrants,  the allotment and
          issuance of the Underlying Shares, the granting of the Agent's Special
          Option,  the  Agent's  Option and the  allotment  and  issuance of the
          Agent's  Shares,  the  declaration  or  payment  of  dividends  by the
          directors  of the  Corporation  or the  payment  of  dividends  by the
          Corporation to the holders of its Shares;

     (w)  Montreal  Trust Company of Canada,  at its offices in Calgary has been
          duly  appointed as the transfer  agent and  registrar  for the Special
          Warrants and the Shares;
<PAGE>
                                      -9-

     (x)  The Corporation has not withheld, and will not withhold from the Agent
          any material facts or material changes relating to the Corporation;

     (y)  The  Corporation  proposes to use the net proceeds of the Offering for
          working capital and general corporate purposes;

     (z)  At the Time of  Closing,  the  Special  Warrants  to be issued and the
          Agent's Special Option to be granted will have been validly issued and
          granted  by the  Corporation  and upon  the  exercise  of the  Special
          Warrants and the Agent's Special Option,  the Underlying Common Shares
          and the Agent's  Option to be issued and granted,  respectively,  will
          have been validly issued and granted,  respectively  as fully paid and
          non-assessable by the Corporation;

     (aa) The  Corporation  has no  contingent  liabilities  out of the ordinary
          course of business  which are  material to it,  except as disclosed in
          the Financial Statements;

     (bb) No  consent,   approval,   authorization,   order,   registration   or
          qualification  of or with any court or governmental  agency or body is
          required  for the sale  and  delivery  of the  Special  Warrants,  the
          granting of the Agent's  Special  Option and the Agent's Option or the
          consummation  by the Corporation of its respective  obligations  under
          this  Agreement,  except those which shall have been obtained prior to
          the closing of the Special Warrants;

     (cc) Other than as  disclosed  in the  Financial  Statements,  neither  the
          Corporation   nor   any  of  the   Subsidiaries   has   approved,   is
          contemplating,  has entered into any  agreement in respect of, and has
          knowledge of:

          (i)       the purchase of any property or interest therein,  the sale,
                    transfer or other  disposition  of any of the  properties or
                    any   interest   therein   currently   owned,   directly  or
                    indirectly, by the Corporation or such Subsidiary whether by
                    asset sale, transfer of shares, or otherwise,  except in the
                    ordinary course of business;

          (ii)      the change of control (by sale or transfer of shares or sale
                    of  all  or   substantially   all  of  the   assets  of  the
                    Corporation) or otherwise; or

          (iii)     a  proposed  or  planned   disposition   of  shares  by  any
                    shareholder who owns, directly or indirectly, 10% or more of
                    the issued and outstanding shares of the Corporation; and

     (dd) All necessary  corporate action has been taken or will be taken by the
          Corporation  prior  to the  Time  of  Closing  to duly  authorize  the
          creation,  issuance and sale of the Special  Warrants  and  Underlying
          Common  Shares and the  granting of the Agent's  Special  Option,  the
          Agent's  Option  and  the  Agent's  Shares,   and  provided  that  the
          Corporation shall have received
<PAGE>
                                      -10-

          payment of the requisite  consideration for, such Special Warrants and
          Underlying  Common Shares and Agent's Special  Option,  Agent's Option
          and  Agent's  Shares will be duly and  validly  authorized,  allotted,
          issued and outstanding as fully paid and non-assessable  shares in the
          capital of the Corporation;

     (ee) The TSE has  conditionally  approved  the  listing  and posting of the
          Underlying Common Shares and the Agent's Shares for trading on the TSE
          as of Closing,  subject only to the usual  conditions  relating to the
          filing of certain  documentation  on or before a date specified by the
          TSE,  distribution  of the  Special  Warrants  and Common  Shares to a
          minimum  number of public  holders and the  payment of certain  filing
          fees;

     (ff) Attached  as Schedule  4(ff) is a complete  and  accurate  list of all
          registered  intellectual property and any application therefor used in
          connection   with  the   business  of  the   Corporation   and/or  the
          Subsidiaries (the "Intellectual Property").  The Intellectual Property
          is all the registered intellectual property of the Corporation and its
          Subsidiaries.  Schedule  4(ff) lists the  registered  name,  nature of
          intellectual  property,  registration  number,  date of  registration,
          expiry date (if any) and the jurisdiction of registration;

     (gg) None of the  Subsidiaries may incur or agree to incur any liability or
          obligation  or  series of  obligations  which  individually  or in the
          aggregate  exceed  NZ$100,000  without first obtaining the approval by
          resolution of the Board of Directors of the Corporation.

Section 5      Covenants of the Corporation.

     The  Corporation  hereby  covenants to the Agent and the Purchasers that it
will:

     (a)  Fulfil  all legal  requirements  to  permit  the  creation,  issuance,
          offering  and sale of the  Special  Warrants,  the  Underlying  Common
          Shares,  the Agent's Special Option,  the Agent's Option,  the Agent's
          Shares,  and to enable the Special Warrants to be offered for sale and
          sold and the Agent's Special Option granted,  without the necessity of
          filing a prospectus  or an offering  memorandum  under the  applicable
          securities laws of the Qualifying Jurisdictions, to Purchasers through
          investment   dealers  or  brokers   registered  under  the  applicable
          securities laws of the applicable  Qualifying  Jurisdictions  who have
          complied with the relevant provisions of such laws;

     (b)  Obtain the  necessary  regulatory  consents  from the  Exchange to the
          Offering on such terms as are mutually acceptable to the Agent and the
          Corporation, acting reasonably;

     (c)  Maintain the listing of the Shares,  including the  Underlying  Common
          Shares, the Agent's Options and the Agent's Shares on the Exchange and
          to  maintain
<PAGE>
                                      -11-

          its status as a reporting issuer in each Qualifying Jurisdiction for a
          period of three years from the Closing Date;

     (d)  During  the  period  from the date  hereof  to the day that is 90 days
          after the  Qualification  Date,  the  Corporation  shall not amend the
          terms and conditions of the Shares or issue any  additional  Shares or
          any options  warrants or  contractual  rights  which may result in the
          issue of Shares, other than (i) pursuant to the exercise of securities
          outstanding  on the date  hereof,  and (ii)  pursuant  to  director or
          employee stock option plans  established  on the date hereof,  without
          the  prior  written  consent  of the  Agent,  such  consent  not to be
          unreasonably withheld;

     (e)  Prepare and file the  Preliminary  Prospectus  and the  Prospectus and
          other related documents  relating to the proposed  distribution of the
          Underlying  Common Shares and the Agent's  Options as required in each
          Qualifying  Jurisdiction and use its reasonable best efforts to obtain
          a receipt for the  Preliminary  Prospectus and the Prospectus no later
          than  the  120  days  after  the  Closing   Date  in  the   Qualifying
          Jurisdictions or as the Agent and the Corporation may otherwise agree;

     (f)  Resolve as soon as reasonably practicable any regulatory  deficiencies
          in respect of the Preliminary  Prospectus on a basis acceptable to the
          Agent and prepare,  file and use its reasonable best efforts to obtain
          the Receipts and take all other  reasonable steps and proceedings that
          may be necessary in order to qualify the Underlying  Common Shares and
          the Agent's Options for  distribution to the public in each Qualifying
          Jurisdiction  as soon as possible after such  regulatory  comments and
          deficiencies have been resolved;

     (g)  Prior to the filing of the  Preliminary  Prospectus,  and prior to the
          filing of the Prospectus and any  Supplementary  Material,  permit the
          Agent and its counsel to participate  fully in the preparation of such
          documents  and  allow the Agent and its  counsel  to  conduct  all due
          diligence  which the Agent may  reasonably  require to be conducted in
          order  to  fulfil  its   obligations   under   applicable   securities
          legislation  and in order  to  enable  the  Agent  to  execute,  in an
          informed  and  responsible  manner,  any  certificate  required  to be
          executed by the Agent in connection with the  Preliminary  Prospectus,
          the Prospectus or any Supplementary Material;

     (h)  Ensure  that  at the  time  of  filing  of  each  of  the  Preliminary
          Prospectus,  the Prospectus and any Supplementary Material, and at all
          times  subsequent  thereto until completion of the distribution of the
          Underlying  Common  Shares and the Agent's  Options,  the  Preliminary
          Prospectus,  Prospectus  and any  Supplementary  Material fully comply
          with the requirements of the applicable securities laws, provided that
          the foregoing shall not apply with respect to statements  contained in
          such documents relating solely to the Agent;
<PAGE>
                                      -12-

     (i)  Deliver in Toronto, within three Business Days after the issuance of a
          receipt for the Preliminary Prospectus and the Prospectus, as the case
          may  be,  and  within  three  Business  Days  after  execution  of any
          Supplementary Material, without charge to the Agent, as many copies of
          the  Preliminary  Prospectus,  the  Prospectus  and any  Supplementary
          Material  as the  Agent  may  request  for the  purposes  contemplated
          hereunder and  contemplated  by applicable  securities  laws, and such
          delivery shall constitute:  (A) the consent of the Corporation for the
          Agent and other  appropriately  registered  investment  dealers to use
          such documents in connection  with the  distribution to the Purchasers
          or the  distribution  to  the  public,  as the  case  may  be,  of the
          Underlying  Common  Shares  and the  Agent's  Options,  subject to the
          provisions of applicable  securities  laws; and (B) the  Corporation's
          representation  and warranty to the Agent and the Purchasers  that, at
          the time of delivery, the information and statements contained therein
          (except  information  and  statements  relating  solely  to or  solely
          provided by the Agent)  contain no  misrepresentation  and  constitute
          full, true and plain  disclosure of all material facts relating to the
          Offering, the Corporation, the Subsidiaries, the Special Warrants, the
          Underlying Common Shares and the Agent's Options;

     (j)  Cause to be delivered to the Agent concurrently with the filing of the
          Prospectus  and any  Supplementary  Material,  comfort  letters of the
          auditors  of the  Corporation,  in each  case  dated  the  date of the
          Prospectus or the Supplementary Material to which such letter relates,
          addressed  to the Agent and to the  directors of the  Corporation,  in
          form and substance satisfactory to the Agent relating to the financial
          statements  to be included  in the  Prospectus  and any  Supplementary
          Material and  verifying in accordance  with the Canadian  Institute of
          Chartered Accountants Handbook the financial  information,  accounting
          data and other  numerical  data  contained  in the  Prospectus  or any
          Supplementary  Material and matters  involving changes or developments
          since the respective dates as of which specified financial information
          is given in the  Prospectus  to a date not more than two Business Days
          prior to the date of such letter;

     (k)  Immediately  after the Time of Closing,  file such documents as may be
          required  under  applicable  securities  laws  relating to the private
          placement  of the  Special  Warrants  and the Agent's  Options  which,
          without limiting the generality of the foregoing, shall include a Form
          45-501F1 as prescribed by Rule 45-501 made under the Ontario Act;

     (l)  Other than a potential  initial  public  offering in the United States
          for  approximately   US$40  million,   the  Corporation   and/or  each
          Subsidiary, as the case may be, shall not (i) issue or sell any Shares
          or financial  instruments  convertible or exchangeable  into Shares of
          the Corporation and/or each Subsidiary, as the case may be, other than
          for purposes of employee stock
<PAGE>
                                      -13-

          options,  or (ii) sell or agree to sell or otherwise dispose of all or
          substantially  all of the  assets  of  the  Corporation  or any of the
          Subsidiaries  for a  period  of six  months  from the  Closing  of the
          Offering,  without the prior consent of the Agent, such consent not to
          be unreasonably withheld;

     (m)  In the  event  of any  breach  of the  foregoing  through  the sale of
          securities or assets of the Corporation or any of the  Subsidiaries to
          one or  more  buyers,  the  Corporation  agrees  to  pay to the  Agent
          forthwith  following  the  completion  of  any  such  transaction  the
          aggregate  amount,  without  set  off  or  deduction,  of  (a)  if the
          Preliminary  Prospectus  relating  to the  Offering  has not yet  been
          filed,  the  Agents'  reasonable  expenses,  (b)  if  the  Preliminary
          Prospectus relating to the Offering has been filed,  Cdn$500,000;  and
          (c) if the  Prospectus  relating to the  Offering  has been filed,  an
          amount equal to 7% of the maximum gross  proceeds from the TK Offering
          and 3.5% of the  President's  Offering plus the Agent's  expenses,  in
          full  satisfaction  of all  claims  against  the  Corporation  in this
          regard.

Section 6      Conditions of Closing.

     The obligations of the Agent and the Purchasers to complete the purchase of
the  Special  Warrants  shall be  subject to the  fulfilment  before the Time of
Closing of the following conditions:

     (a)  The Corporation shall have obtained all requisite regulatory approvals
          required to be obtained by the Corporation in respect of the Offering;

     (b)  The Corporation shall have fully complied with all relevant  statutory
          and regulatory  requirements required to be complied with prior to the
          Time  of  Closing  (including,   without  limitation,  the  regulatory
          requirements of the Exchange) in connection with the Offering;

     (c)  The Corporation shall have received the final approval of the Exchange
          to proceed with the Offering and to issue the Special Warrants and the
          Agent's Special Option;

     (d)  The  Corporation  shall have taken all necessary  corporate  action to
          authorize  and  approve  the  Documents,  the  issuance of the Special
          Warrants,  the Underlying  Common Shares,  the Agent's Special Option,
          the Agent's Option,  the Agent's Shares and all other matters relating
          thereto;

     (e)  The  Agent  and the  Purchasers  shall  have  received  at the Time of
          Closing a favourable legal opinion of Chamberlain  Hutchison,  counsel
          to the Corporation,  or any sub-agents as applicable  addressed to the
          Agent and each of the Purchasers,  acceptable to counsel to the Agent,
          acting reasonably, to the effect that:
<PAGE>
                                      -14-

          (i)       The Corporation is a corporation  validly existing under the
                    laws  of  the  jurisdiction  of  its  incorporation  and  is
                    qualified  to carry on business and own its assets under the
                    laws of its jurisdiction of incorporation;

          (ii)      The Corporation has all requisite corporate capacity,  power
                    and  authority to carry on its business as now  conducted by
                    it, to own its assets and the  Corporation has all requisite
                    capacity,  power and  authority  to execute  and deliver the
                    Documents  and  to  perform  all  transactions  contemplated
                    hereby and thereby;

          (iii)     The  authorized  capital of the  Corporation  consists of an
                    unlimited  number  of  Shares  and an  unlimited  number  of
                    preferred  shares  issuable  in series  of which  15,137,467
                    Shares  are  issued  and   outstanding  as  fully  paid  and
                    non-assessable;

          (iv)      Each of the Documents other than the Agent's Option has been
                    duly  authorized,  executed and delivered by the Corporation
                    and constitutes a legal, valid and binding obligation of the
                    Corporation,  enforceable  in accordance  with its terms and
                    the  Agent's  Option  has  been  duly  authorized  and  when
                    executed and delivered by the Corporation  will constitute a
                    legal,  valid and binding  obligation of the Corporation and
                    will be enforceable in accordance with its terms;

          (v)       All  necessary  corporate  action  has  been  taken  by  the
                    Corporation  to  authorize  the creation and issuance of the
                    Special Warrants, the Agent's Special Option and the Agent's
                    Option;

          (vi)      The Special  Warrants  have been  authorized,  executed  and
                    issued by the  Corporation  and  certified  and delivered in
                    accordance  with  the  provisions  of  the  Special  Warrant
                    Indenture and the Special Warrants  constitute legal,  valid
                    and binding  obligations of the  Corporation  enforceable in
                    accordance with their terms, and are entitled to the benefit
                    of the Special Warrant Indenture;

          (vii)     The Underlying Common Shares have been allotted and reserved
                    for issuance to the holders of the Special Warrants and upon
                    the exercise of the Special  Warrants in accordance with the
                    terms of the Special Warrant,  the Underlying  Common Shares
                    will be  validly  issued as  fully-paid  and  non-assessable
                    Shares, to the holders thereof without additional payment;

          (viii)    The Agent's  Special  Option has been validly issued and the
                    Agent's Option to be issued upon the exercise of the Agent's
                    Special  Option  will,  when issued upon the exercise of the
                    Agent's  Special  Option in  accordance  with its terms,  be
                    validly issued to the Agent without additional payment;
<PAGE>
                                      -15-

          (ix)      The  Agent's  Shares have been  allotted  and  reserved  for
                    issuance  to the holder of the  Agent's  Option and upon the
                    exercise of the Agent's  Option,  the Agent's Shares will be
                    validly issued as fully-paid and  non-assessable  Shares, to
                    the holders thereof;

          (x)       The  issuance  and sale of the Special  Warrants are exempt,
                    either  by  statute  or  regulation   or  order,   from  the
                    prospectus and  registration  requirements of the applicable
                    Qualifying  Jurisdiction,  subject  to  the  filing  of  all
                    necessary  reports,  certificates or  undertakings  and fees
                    required  to  be  filed  under  the  applicable   securities
                    legislation;

          (xi)      Upon the issuance of the  Receipts  prior to the exercise of
                    the Special Warrants by a Purchaser,  the Underlying  Common
                    Shares  will not be subject  to any  statutory  hold  period
                    under the laws of the applicable Qualifying Jurisdiction and
                    no other  documents  are  required to be filed,  proceedings
                    taken   or   approvals,   permits,   consents,   orders   or
                    authorizations  of  regulatory  authorities  required  to be
                    obtained  under  the  laws  of  the  applicable   Qualifying
                    Jurisdiction,  in  connection  with the  first  trade by the
                    holder of the Underlying Common Shares;

          (xii)     In the  event  that a  Receipt  is not  issued  prior to the
                    exercise of the Special  Warrants by a holder thereof,  then
                    the issue of the  Underlying  Common  Shares  will be exempt
                    from the  registration  and prospectus  requirements  of the
                    laws of the applicable Qualifying Jurisdiction and that such
                    Underlying Common Shares will be subject to a statutory hold
                    period of twelve months in Ontario and Alberta and otherwise
                    in accordance with applicable securities  legislation in the
                    other  Qualifying  Jurisdictions as set forth in the opinion
                    of local counsel therein commencing from the Closing Date;

          (xiii)    In the event that issue of the Agent's  Option is  qualified
                    by the Prospectus, the Agent's Shares issuable to the holder
                    of the Agent's  Option upon  exercise of the Agent's  Option
                    will not be subject to any  statutory  hold period under the
                    laws of the applicable Qualifying  Jurisdiction and no other
                    documents  are  required to be filed,  proceedings  taken or
                    approvals,  permits,  consents,  orders or authorizations of
                    regulatory  authorities  required to be  obtained  under the
                    laws  of  the   applicable   Qualifying   Jurisdiction,   in
                    connection with the first trade by the holder of the Agent's
                    Shares;

          (xiv)     The   execution  and  delivery  of  the  Documents  and  the
                    performance  of  the   transactions   contemplated   thereby
                    (including  the issuance  and sale of the Special  Warrants,
                    the Underlying  Common Shares,  the Agent's  Special Option,
                    the Agent's  Option,  the Agent's Shares do not and will not
                    result in a breach  of,  and do not  create a state of facts
                    which, after
<PAGE>
                                      -16-

                    notice or lapse of time or both,  will result in a breach of
                    and do not and will not  conflict  with,  any of the  terms,
                    conditions or provisions of the constating  documents of the
                    Corporation;

          (xv)      The form of share  certificate  for the Shares conforms with
                    all   applicable   corporate    legislation   and   Exchange
                    requirements  and have been approved by the directors of the
                    Corporation;

          (xvi)     The  Corporation  is a reporting  issuer in good standing in
                    Ontario and Alberta; and

          (xvii)    Such other  matters as the Agent may  request in  connection
                    with the Offering;

          and  in  giving  the  opinions  contemplated  above,  counsel  to  the
          Corporation  shall be entitled to deliver opinions of local counsel in
          the Qualifying  Jurisdiction,  and counsel to the Corporation shall be
          entitled,  as to matters of fact, to rely upon the representations and
          warranties of Purchasers contained in the Subscription  Agreements,  a
          certificate  of fact of the  Corporation  signed  by  officers  of the
          Corporation  in  positions  to have  knowledge of such facts and their
          accuracy and  certificates of such public  officials and other persons
          as are  necessary  or  desirable,  certificates  of the  Corporation's
          registrar  and  transfer  agent as to the number of Shares  issued and
          outstanding;

     (f)  The  Corporation  has delivered to the Agent a certificate of Montreal
          Trust of Canada, as registrar and transfer agent of the Shares,  which
          certifies  the  number of Shares  issued and  outstanding  on the date
          prior to the Closing Date;

     (g)  If any Special Warrants are sold in the United States, the Agent shall
          have  received  at the Time of  Closing  a  favourable  legal  opinion
          addressed to the Agent dated the Closing  Date,  from U.S.  counsel to
          the   Corporation,   which  counsel  may  rely  upon  the   covenants,
          representations  and warranties of the  Corporation  and the Agent set
          forth in this  Agreement and upon the covenants,  representations  and
          warranties  of any  Purchasers  in the United  States set forth in the
          Subscription  Agreement  applicable  to  U.S.  Purchasers  (the  "U.S.
          Purchasers"), that no registration of the Special Warrants is required
          under the United States  Securities Act of 1933 in connection with the
          issuance and sale of the Special Warrants to the U.S. Purchasers; and

     (h)  The Corporation shall deliver to the Agent the documents  required for
          delivery as set out in the closing  agenda  amended hereto as Schedule
          6(h).

Section 7      Closing.

(1)  The  purchase  and sale of the Special  Warrants  shall be completed at the
     offices of Stikeman, Elliott, Commerce Court West, P.O. Box 85, Suite 5300,
     Toronto,  Ontario,  at 10:00 a.m. (Toronto time) (the "Time of Closing") on
     January  21,  2000 or at such

<PAGE>
                                      -17-

     other time or on such other date as the Corporation and the Agent may agree
     (the "Closing Date").

(2)  At the Time of Closing,  the Corporation  shall deliver to the Agent on its
     own behalf and on behalf of the Purchasers:

     (a)  The requisite  legal  opinions and  certificates  as  contemplated  in
          Section 6 hereof; and

     (b)  Such further documentation as may be contemplated herein or as counsel
          to the Agent or the applicable regulatory authorities may require;

against  receipt of the Net  Proceeds.  Certificates  representing  the  Special
Warrants  purchased  by the  Purchasers  will be  delivered  by the  Trustee  as
directed by the Purchasers.

Section 8      Expenses.

     Whether or not the  transactions  provided  for herein are  completed,  the
Corporation  shall pay all reasonable  costs,  fees and expenses  related to the
Offering of or  incidental  to the  performance  of the  obligations  under this
Agreement  including,  without limitation:  (i) the reasonable fees and expenses
(including  taxes) of the  Agent's  counsel,  Stikeman,  Elliott to a maximum of
$60,000 and (ii) the Agent's  reasonable  out-of-pocket  expenses.  Such amounts
payable to the Agent under this Section  shall be paid by the  Corporation  upon
release of the Net Proceeds.

Section 9      Material Changes.

(1)  If after  the date  hereof  until  completion  of the  distribution  of the
     Underlying Common Shares and Agent's Option:

     (a)  There occurs any material change or material changes (actual, proposed
          or prospective) in respect of the Corporation;

     (b)  There  occurs  any  change  in  any  material  fact  contained  in the
          Preliminary Prospectus, Prospectus or any Supplementary Material; or

     (c)  Any new  material  fact  arises  which  would,  under  the  applicable
          securities  legislation,  require  an  amendment  to  the  Preliminary
          Prospectus, Prospectus or any Supplementary Material,

     the Corporation shall:

     (d)  Promptly notify the Agent, in writing,  providing full  particulars of
          any such change;

     (e)  If required by applicable  law,  prepare and deliver to each Purchaser
          an amendment to the Preliminary Prospectus or Prospectus,  as the case
          may be;
<PAGE>
                                      -18-

     (f)  File or cause to be filed with reasonable promptness, and in any event
          within any statutory limitation period therefor, any document required
          to be filed with any regulatory body having  jurisdiction,  and comply
          with all requirements of any applicable securities legislation of such
          jurisdiction; and

     (g)  Comply with all legal  requirements  necessary  to continue to qualify
          the Underlying  Common Shares and the Agent's Option for  distribution
          in each Qualifying Jurisdiction.

(2)  The  Corporation  shall  after  the date  hereof  until  completion  of the
     distribution of the Underlying Common Shares and the Agent's Option in good
     faith discuss with the Agent any change in circumstances (actual,  proposed
     or  prospective)  in respect of which  there is  reasonable  doubt  whether
     written  notice  should be given to the Agent  pursuant to this section and
     shall  consult  the  Agent  with  respect  to the form and  content  of any
     Supplementary Material proposed to be issued or filed by the Corporation as
     a result of such change prior to the issuance or filing thereof.

(3)  In  this  Agreement,   the  terms  "material   change",   "material  fact",
     "misrepresentation"  and "distribution"  shall have the respective meanings
     ascribed thereto in the Ontario Act.

Section 10     Indemnities.

(1)  The  Corporation  on behalf of itself and each of the  Subsidiaries  hereby
     covenants  and agrees to protect,  indemnify  and hold harmless each of the
     Agent  and  its  affiliates  and  their  directors,   officers,  employees,
     solicitors  and  agents   (individually,   an   "Indemnified   Party"  and,
     collectively,  the  "Indemnified  Parties")  from and  against  any and all
     expenses,  losses (except for loss of profits),  claims,  costs, damages or
     liabilities which they may suffer or incur caused by or arising directly or
     indirectly by reason of:

     (a)  Any representation or warranty made by the Corporation to the Agent or
          the Purchasers not being true;

     (b)  Any  information  or statement  (except any  information  or statement
          relating solely to the Agent) contained in the Preliminary Prospectus,
          Prospectus or any Supplementary  Material being or being alleged to be
          a misrepresentation;

     (c)  The omission to state in the Preliminary Prospectus, Prospectus or any
          Supplementary  Material a material fact required to be stated  therein
          or necessary to make the statements therein not misleading (except the
          omission to state a material fact relating solely to the Agent);

     (d)  The  Corporation's  failure  to  comply  with any  requirement  of any
          securities  legislation or regulatory  requirements  of the Qualifying
          Jurisdictions in connection with the Offering;
<PAGE>
                                      -19-

     (e)  Any order made or any inquiry,  investigation or proceeding  commenced
          or threatened  by any  regulatory  authority  based upon an allegation
          that any untrue statement or alleged omission or any misrepresentation
          or  alleged  misrepresentation  in  the  Preliminary  Prospectus,  the
          Prospectus or any  Supplementary  Material exists (except  information
          and  statements  relating  solely  to the  Agent)  which  prevents  or
          restricts the trading in or  distribution  of the Special  Warrants or
          the Underlying Common Shares,  the Agent's Special Option, the Agent's
          Option or the Agent's Shares;

     (f)  The  Corporation's  failure  to  comply  with  any of its  obligations
          hereunder; or

     (g)  The  performance of services  rendered to the Corporation by the Agent
          and the Indemnified  Parties hereunder or otherwise in connection with
          the matters referred to in this Agreement.

(2)  If any action or claim shall be asserted  against an  Indemnified  Party in
     respect of which indemnity may be sought from the  Corporation  pursuant to
     the  provisions  hereof,  or if any potential  claim  contemplated  by this
     section  shall  come  to  the  knowledge  of  an  Indemnified   Party,  the
     Indemnified  Party shall promptly  notify the Corporation in writing of the
     nature of such  action or claim  (provided  that any  failure  to so notify
     shall not affect the  Corporation's  liability under this paragraph  unless
     such delay has prejudiced the defence to such claim). The Corporation shall
     be  entitled  but not  obliged  to  participate  in or assume  the  defence
     thereof,  provided, however that the defence shall be through legal counsel
     acceptable to the Indemnified Party,  acting reasonably.  In addition,  the
     Indemnified  Party shall also have the right to employ separate  counsel in
     any such action and  participate in the defence  thereof,  and the fees and
     expense of such counsel shall be paid by the  Indemnified  Party unless (i)
     the employment  thereof has been specifically  authorized in writing by the
     Corporation;  (ii) the Indemnified Party has been advised by counsel,  that
     representation  of the Corporation  and the  Indemnified  Party by the same
     counsel  would  be  inappropriate  due to  actual  or  potential  differing
     interests  between  them;  or (iii) the  Corporation  has  failed  within a
     reasonable  time after receipt of such written notice to assume the defence
     of such action or claim.  Neither party shall effect any  settlement of any
     such action or claim or make any admission of liability without the written
     consent of the other party, such consent not to be unreasonably withheld or
     delayed.  The indemnity  hereby provided for shall remain in full force and
     effect and shall not be limited to or  affected by any other  indemnity  in
     respect  of  any  matters   specified  in  this  section  obtained  by  the
     Indemnified Party from any other person.

(3)  To the extent that any  Indemnified  Party is not a party to this Agreement
     the Agent shall  obtain and hold the right and  benefit of this  section in
     trust for and on behalf of such Indemnified Party.

(4)  The Corporation  hereby waives its right to recover  contribution  from the
     Agent with  respect to any  liability  of the  Corporation  by reason of or
     arising  out  of  any
<PAGE>
                                      -20-

     misrepresentation  contained in the Preliminary Prospectus,  the Prospectus
     or in any Supplementary Material; provided, however, that such waiver shall
     not  apply in  respect  of  liability  caused or  incurred  by reason of or
     arising out of any  misrepresentation  which is based upon or results  from
     information relating solely to the Agent contained in such document.

(5)  The Corporation  hereby consents to personal  jurisdiction  and service and
     venue in any court in which any claim  which is subject to  indemnification
     hereunder is brought against the Agent or any Indemnified  Party and to the
     assignment of the benefit of this section to any Indemnified  Party for the
     purpose  of  enforcement  provided  that  nothing  herein  shall  limit the
     Corporation's  right or ability to contest the appropriate  jurisdiction or
     forum for the determination of any such claims.

Section 11     Contribution.

     If, for any  reason,  the  indemnity  provided  for in Section 11 hereof is
illegal or unenforceable or  insufficient,  the Corporation  shall contribute to
the  amount  paid or  payable  by the Agent as a result of all  losses,  claims,
costs,  damages,  expenses or liabilities  (except loss of profits in connection
with the sale of Special  Warrants).  Notwithstanding  the  foregoing,  a person
guilty of  fraudulent  misrepresentation  shall not be entitled to  contribution
from any other  party.  The  Agent  will,  promptly  after  receiving  notice of
commencement  of any claim,  action,  suit or  proceeding  against such party in
respect of which a claim for  contribution  may be made against the  Corporation
under this section,  notify the Corporation that  contribution may be sought. In
no case shall such party from whom  contribution  may be sought be liable  under
this contribution agreement unless such notice shall have been provided, but the
omission  to so  notify  such  party  shall  not  relieve  the  party  from whom
contribution  may be sought from any other obligation it may have otherwise than
under this section. The right to contribution  provided in this section shall be
in addition and not in derogation of any other right to  contribution  which the
Agent may have by statute or otherwise by law.

Section 12     Termination Rights.

(1)  The  Agent  shall be  entitled,  at its  option,  to  terminate  all of its
     obligations  under this  Agreement,  and the obligations of any person from
     whom the Agent has solicited an order to purchase the Special Warrants that
     has executed a Subscription  Agreement,  by notice to that effect delivered
     to the Corporation prior to the Time of Closing if:

     (a)  An  adverse  material  change  in  the  business  or  affairs  of  the
          Corporation or any of its  Subsidiaries  occurs or is announced by the
          Corporation;

     (b)  There is an event,  accident,  governmental law or regulation or other
          occurrence of any nature which, in the opinion of the Agent, seriously
          affects  or  will  seriously  affect  the  financial  markets,  or the
          business of the Corporation or its  Subsidiaries or the ability of the
          Agent  to  perform  its  obligations  under  this  Agreement,   or  an
          investor's decision to purchase the Special Warrants;
<PAGE>
                                      -21-

     (c)  Following a consideration of the history, business, products, property
          or affairs of the Corporation,  its Subsidiaries or its principals, or
          of the state of the financial markets in general,  or the state of the
          market  for the  Corporation's  securities  in  particular,  the Agent
          determines, in its sole discretion,  that it is not in the interest of
          the  Purchasers  to  complete  the  purchase  and sale of the  Special
          Warrants;

     (d)  Any order to cease trading  (including  communicating  with persons in
          order to obtain  expressions  of  interest) in the  securities  of the
          Corporation is made by a competent regulatory authority and that order
          is still in effect;

     (e)  The Corporation is in breach of any term of this Agreement; or

     (f)  The Agent  determines  that any of the  representations  or warranties
          made by the  Corporation  in this  Agreement  is false  or has  become
          false.

(2)  If the Agent  terminates  this  Agreement  pursuant to this section,  there
     shall  be no  further  liability  on  the  part  of  the  Agent  or of  the
     Corporation to the Agent except in respect of any liability  which may have
     arisen or may thereafter arise under Section 3(2), Section 8, Section 10 or
     Section 11 hereof.

(3)  The right of the Agent to terminate its obligations under this Agreement is
     in addition  to such other  remedies as they may have or have in respect of
     any default,  act or failure to act of the Corporation in respect of any of
     the matters contemplated by this Agreement.

Section 13     Breach of Agreement.

     Any breach of, or failure by the  Corporation  to comply with,  any term or
condition of this Agreement shall entitle the Agent, on behalf of the Purchasers
of the Special Warrants,  to terminate their respective  obligations to purchase
the Special Warrants by notice to that effect given to the Corporation  prior to
the Time of Closing,  and there shall be no further liability on the part of the
Corporation  or such Agent  except in respect  of any  liability  which may have
arisen or may  thereafter  arise under  Section  3(2),  Section 8, Section 10 or
Section 11Section 11 hereof. The Agent may waive, in whole or in part, or extend
the time for compliance with, any terms and conditions  without prejudice to its
rights in respect of any other terms and  conditions  or any other or subsequent
breach or non-compliance provided, however, that any waiver or extension must be
in writing and signed by the Agent in order to be binding upon them.

Section 14     Right of First Refusal.

     The  Corporation  hereby grants to the Agent a right (the "First Right") to
act as the Corporation's  exclusive agent in connection with any equity offering
of securities  (including an offering of special warrants) of the Corporation or
in  connection  with a sale  or  proposed  sale  by  the  Corporation  of all or
substantially  all of the  Corporation's  assets  or the  entering  into  of any
business  combination by the  Corporation,  including any merger or acquisition,

<PAGE>
                                      -22-

during the one year period commencing on the date hereof.  The First Right shall
be  exercisable  during a period of ten Business Days after receipt by the Agent
from the Corporation of a notice  outlining the proposed terms of a transaction.
The terms and  conditions of any retainer will be subject to separate good faith
negotiations  between  the  Corporation  and  the  Agent,  such  fees  to  be in
accordance with North American industry  standards for transactions of a similar
nature.

Section 15     Notices.

     Any  notice  under  this  Agreement  shall be given in  writing  and either
delivered,  faxed or mailed by prepaid  registered  post to the party to receive
such notice at the address or facsimile numbers indicated below:

     (a)  to the Corporation at:

          Brocker Technology Group Ltd.
          2150 Scotia One
          10060 Jasper Avenue
          Edmonton, Alberta
          T5J 3R8

          Attention:    Mr. Casey J. O'Byrne
                        Chairman

          Facsimile:    (780) 429-0101

     (b)  to the Agent or any Indemnified Party at:

          Thomson Kernaghan & Co. Limited
          365 Bay Street
          9th Floor
          Toronto, Ontario  M5H 2V2

          Attention:    Mr. Lionel Conacher

          Facsimile:    416-367-8055

or such other address or facsimile number as such party may hereafter  designate
by notice in writing to the other party.  If a notice is delivered,  it shall be
effective  from the date of  delivery;  if such  notice is faxed  (with  receipt
confirmed),  it shall be effective on the Business Day  following  the date such
notice is faxed;  if such  notice is sent by mail,  it shall be  effective  four
Business Days following the date of mailing, excluding all days when normal mail
service is interrupted.
<PAGE>
                                      -23-

Section 16     Survival.

     All  representations,   warranties,   and  agreements  of  the  Corporation
contained  herein  or  contained  in any  document  submitted  pursuant  to this
Agreement  or in  connection  with the  purchase of the Special  Warrants  shall
survive the purchase of the Special  Warrants and the Agent's Special Option for
a period of two  years  from the Time of  Closing  by the  Purchasers  and shall
continue in full force and effect  unaffected by any  subsequent  disposition or
conversion of the Special  Warrants and the Agent's Special Option and the Agent
shall not be limited or prejudiced by any investigation  made by or on behalf of
the Agent in the course of the  preparation of the Preliminary  Prospectus,  the
Prospectus  or any  Supplementary  Material or the  distribution  of the Special
Warrants.

Section 17     Entire Agreement.

     The provisions  herein  contained and all agreements,  instruments or other
documents referred to herein constitute the entire agreement between the parties
hereto   and   supersede   all   previous    communications,    representations,
understandings  and  agreements  between the parties with respect to the subject
matter hereof whether verbal or written.

Section 18     Counterparts.

     This  Agreement  may be executed in any number of  counterparts  and may be
executed by facsimile,  all of which when taken  together  shall be deemed to be
one and the same document and not  withstanding  the actual date of execution of
each  counterpart,  this  Agreement  shall be  deemed to be dated as of the date
first above written.

Section 19     General.

     This Agreement  shall be governed by and interpreted in accordance with the
laws of Alberta and the laws of Canada  applicable  therein and time shall be of
the essence hereof.

Section 20     Severability.

     If any provision of this Agreement, or the application of such provision to
any  person  or  circumstance,  shall  be held  invalid  or  unenforceable,  the
remainder of this Agreement,  or the application of such provision to persons or
circumstances  other than those as to which it is held invalid or unenforceable,
shall not be affected thereby.
<PAGE>
                                      -24-

     If the above is in  accordance  with your  understanding,  please  sign and
return  to the  Agent a copy of this  letter,  whereupon  this  letter  and your
acceptance shall constitute a binding  agreement between the Corporation and the
Agent.

                                        THOMSON KERNAGHAN & CO. Limited

                                        By:
                                           -------------------------------------
                                             Authorized Signing Officer

     The above offer is hereby accepted and agreed to as of the date first above
written.

                                        BROCKER TECHNOLOGY GROUP LTD.

                                        By:
                                           -------------------------------------
                                             Authorized Signing Officer

<PAGE>

                                SCHEDULE 3(2)(a)
                         FORM OF AGENT'S SPECIAL OPTION

                        AGENT'S SPECIAL OPTION TO ACQUIRE
                                 AGENT'S OPTION
                                       OF
                          BROCKER TECHNOLOGY GROUP LTD.

          (incorporated under the Business Corporations Act (Alberta))

     THIS CERTIFIES  that, for value received,  Thomson  Kernaghan & Co. Limited
(the  "Agent")  is the  registered  holder of an  agent's  special  option  (the
"Agent's  Special  Option")  granted  by  Brocker  Technology  Group  Ltd.  (the
"Corporation") which entitles the Agent, subject to the terms and conditions set
forth in this  certificate,  to  acquire  from the  Corporation  an option  (the
"Agent's  Option"),  for no additional  consideration,  at any time prior to the
Time of Expiry  (defined  below).  The Agent's Option shall entitle the Agent to
acquire 200,000 fully paid and  non-assessable  common shares of the Corporation
(each, a "Share", collectively, the "Shares") commencing on the date of issuance
of the Agent's Option and continuing up to 4:00 p.m.  (Edmonton time) on January
21,  2002 on payment  of $6.25 per Share (the  "Exercise  Price").  The  Agent's
Option  shall be in the form  attached as  Schedule  "B"  hereto.  This  Agent's
Special Option is being issued as partial  compensation  to the Agent for its or
its affiliates  services  pursuant to an agency agreement dated January 21, 2000
between the  Corporation  and the Agent in connection with the issue and sale of
special  warrants  (the  "Special  Warrants")  of the  Corporation.  The Agent's
Special Option will be deemed to be exercised by the Agent without any action on
the part of the Agent upon the earlier of the (i) the first  anniversary  of the
Closing Date  (defined  below) and (ii) the fifth  business day (defined  below)
after  the  day on  which  all  receipts  have  been  issued  by the  securities
regulatory authorities in the Provinces of Canada in which purchasers of Special
Warrants are resident (the "Qualifying Provinces") for the final prospectus (the
"Prospectus")  to qualify the  distribution  of common shares of the Corporation
and, to the extent  possible,  the  distribution  of the Agent's Option issuable
upon the  exercise  of the Agent's  Special  Option (in either case the "Time of
Expiry"). For the purposes hereof, "business day" means any day except Saturday,
Sunday or statutory holiday in Edmonton, Alberta.

Section 1      Exercise of Agent's Special Option:

(1)  Exercise.  The Agent may at any time  prior to the Time of Expiry  exercise
     the Agent's  Special  Option by means of the completion and delivery to the
     Corporation, at the offices of Chamberlain Hutchison, 1103 Toronto Dominion
     Tower,  10088-102 Avenue,  Edmonton Alberta T5J 2Z1,  Attention:  Andrew J.
     Chamberlain,  of the  Exercise  Form in the form  attached as Schedule  "A"
     hereto.  If the Agent's Special Option has not been exercised in full prior
     to the Time of  Expiry,  the  unexercised  portion of the  Agent's  Special
     Option will be deemed exercised by the holder thereof  immediately prior to
     the Time of Expiry. Notwithstanding the date of exercise or deemed exercise
     of the Agent's  Special  Option,  the Agent's Option shall be in respect
<PAGE>
                                      -25-

     of the Shares as  constituted  on January 21, 2000 (the "Closing  Date") in
     order to ensure  that the  Agent's  Option  is  subject  to the  adjustment
     provisions  contained in the  certificate  representing  the Agent's Option
     from the date hereof.

(2)  Shares to be Reserved.  The  Corporation  will at all times keep available,
     and reserve if necessary under applicable law, out of its authorized common
     shares,  solely for the  purpose of issue upon the  exercise of the Agent's
     Option,  such number of Shares as shall then be issuable  upon the exercise
     of the Agent's Option. The Corporation covenants and agrees that all Shares
     which shall be so issuable will,  upon issuance,  be duly authorized and be
     issued as fully paid and  non-assessable.  The  Corporation  will take such
     actions  as may be  reasonably  necessary  and as are  within  its power to
     ensure  that all such  Shares  may be so issued  without  violation  of any
     applicable  law or applicable  requirements  of any exchange upon which the
     common shares of the  Corporation  may be listed or in respect of which the
     common  shares  of the  Corporation  are  qualified  for  unlisted  trading
     privileges.

(3)  Qualification.  The  Corporation  will use its  reasonable  best efforts to
     promptly  finalize  and obtain all  receipts  for the  Prospectus  from the
     securities  regulatory  authorities in the Qualifying  Provinces as soon as
     reasonably practicable.

Section 2      No Transfer.

     The   Agent's   Special   Option   evidenced   hereby  is   non-assignable,
non-transferable  and  non-negotiable  and  may not be  exercised  by or for the
benefit of any person other than the Agent.

Section 3      Replacement.

     Upon  receipt of  evidence  satisfactory  to the  Corporation  of the loss,
theft,  destruction or mutilation of this  certificate  and, if requested by the
Corporation,   upon  delivery  of  a  bond  of  indemnity  satisfactory  to  the
Corporation (or, in the case of mutilation, upon surrender of this certificate),
the Corporation  will issue to the Agent a replacement  certificate  (containing
the same terms and conditions as this certificate).

Section 4      Governing Law.

     The laws of the  Province  of  Alberta  and the laws of  Canada  applicable
therein shall govern the Agent's Special Option.

Section 5      Successor Agent.

     This  Certificate  shall enure to the benefit of and shall be binding  upon
the Agent and the Corporation and their respective successors.

Section 6      General.

     This certificate is not valid for any purpose  whatsoever  unless and until
it has been  signed by or on  behalf  of the  Corporation.  The  holding  of the
Agent's Special Option  evidenced by this  certificate  shall not constitute the
holder a shareholder  of the  Corporation
<PAGE>
                                      -26-

or entitle  the holder to any right or  interest  in respect  thereof  except as
expressly provided in this certificate.

     IN WITNESS WHEREOF the Corporation has caused this certificate to be signed
by its duly authorized officers and its corporate seal hereto affixed.

     DATED as of the _____ day of January, 2000.

                                        BROCKER TECHNOLOGY GROUP
                                        LTD.

                                        By:
                                           -------------------------------------
                                             Authorized Signing Officer

<PAGE>

                                  SCHEDULE "A"

                                  EXERCISE FORM

     The undersigned  hereby  irrevocably elects to exercise the Agent's Special
Option  granted by Brocker  Technology  Group Ltd. (the  "Corporation")  set out
below for an Agent's Option (or other property or securities subject thereto) to
acquire  ___________ common shares in the capital of the Corporation and directs
such Agent's Option to be registered and a certificate therefor to be issued and
delivered as directed below.

     DATED this ____ day of _________________, _____

                                        THOMSON KERNAGHAN & CO.
                                        LIMITED

                                        By:
                                           -------------------------------------
                                             Authorized Signing Officer

Direction as to Registration:

Name of Registered Holder:                 -------------------------------------

Address of Registered Holder               -------------------------------------

                                           -------------------------------------

                                           -------------------------------------

Direction as to Delivery:

Name of Contact:                           -------------------------------------

Address of Contact:                        -------------------------------------

                                           -------------------------------------

                                           -------------------------------------

<PAGE>

                                  SCHEDULE "B"

                  FORM OF AGENT'S OPTION TO PURCHASE SHARES OF
                          BROCKER TECHNOLOGY GROUP LTD.

           (incorporated under the Business Corporation Act (Alberta))

     THIS CERTIFIES  that, for value received,  Thomson  Kernaghan & Co. Limited
(the  "Agent")  is the  registered  holder of an Agent's  Option  (the  "Agent's
Option")  which  entitles the holder,  subject to the terms and  conditions  set
forth in this Certificate,  to purchase from Brocker  Technology Group Ltd. (the
"Corporation") up to 200,000 fully paid and non-assessable  common shares of the
Corporation  (the  "Shares")  at any  time  commencing  on the date  hereof  and
continuing  up to 4:00 p.m.  (Edmonton  time) on January  21, 2002 (the "Time of
Expiry")  on payment of $6.25 per Share (the  "Exercise  Price").  The number of
Shares that the Agent is entitled to acquire upon exercise of the Agent's Option
and payment of the  Exercise  Price are  subject to  adjustment  as  hereinafter
provided.

Section 1      Exercise of Agent's Option.

(1)  Election to  Purchase.  The rights  evidenced  by this  certificate  may be
     exercised  by the  Agent in whole  or in part  and in  accordance  with the
     provisions  hereof by delivery of an Election to Exercise in  substantially
     the form attached hereto as Exhibit "1",  properly  completed and executed,
     together  with  payment  of the  Exercise  Price  for the  number of Shares
     specified in the Election to Exercise to the  Corporation at the offices of
     Chamberlain  Hutchison,  1103 Toronto  Dominion  Tower,  10088-102  Avenue,
     Edmonton, Alberta T5J 2Z1, Attention:  Andrew J. Chamberlain, or such other
     address in Canada as may be notified in writing by the Corporation.  In the
     event that the rights  evidenced by this certificate are exercised in part,
     the Corporation  shall,  contemporaneously  with the issuance of the Shares
     issuable on the exercise of the Agent's  Option so exercised,  issue to the
     Agent,  an Agent's  Option on identical  terms in respect of that number of
     Shares in respect of which the Agent has not exercised the rights evidenced
     by this certificate.

(2)  Exercise.  The  Corporation  shall, on the date it receives a duly executed
     Election  to  Exercise  and the  Exercise  Price  for the  number of shares
     specified in the Election to Exercise  (the  "Exercise  Date"),  issue that
     number of Shares  specified  in the  Election to Exercise as fully paid and
     non-assessable Shares of the Corporation.

(3)  Certificate. As promptly as practicable after the Exercise Date and, in any
     event,  within five  business  days of receipt of the Election to Exercise,
     the  Corporation  shall issue and deliver to the Agent,  registered in such
     name or names as the Agent  may  direct  or if no such  direction  has been
     given,  in the name of the Agent,  certificate(s)  for the number of Shares
     specified in the Election to Exercise. To the extent permitted by law, such
     exercise  shall be deemed to have been effected as of the close of business
     on the Exercise Date, and at such time the rights of the Agent with respect
     to the  number of Shares in respect  of which the  Agent's  Option has been
     exercised shall
<PAGE>
                                      -2-

     cease, and the person or persons in whose name or names any  certificate(s)
     for Shares  shall then be issuable  upon such  exercise  shall be deemed to
     have  become the  holder or  holders  of record of the  Shares  represented
     thereby.

(4)  Fractional  Shares.  Fractional  shares  shall not be issued and the holder
     shall  not be  entitled  to any  compensation  or  other  right  in lieu of
     fractional Shares.

(5)  Corporate Changes. Subject to Section 5 hereof, if the Corporation shall be
     a  party  to any  reorganization,  merger,  dissolution  or  sale of all or
     substantially  all of its  assets,  whether or not the  Corporation  is the
     surviving entity, the Agent's Option evidenced by this certificate shall be
     adjusted  so as to apply to the  securities  to which  the  holder  of that
     number of Shares subject to the unexercised  Agent's Option would have been
     entitled by reason of such reorganization,  merger,  dissolution or sale of
     all or  substantially  all of its assets (the  "Event"),  and the  Exercise
     Price shall be  adjusted to be the amount  determined  by  multiplying  the
     Exercise  Price in effect  immediately  prior to the Event by the number of
     Shares subject to the unexercised  Agent's Option  immediately prior to the
     Event,  and dividing  the product  thereof by the number of  securities  to
     which the  holder  of that  number of  Shares  subject  to the  unexercised
     Agent's Option would have been entitled to by reason of such Event.

(6)  Subdivision or Consolidation of Shares:

     (a)  In the event the Corporation  shall  subdivide its outstanding  common
          shares into a greater number of common  shares,  the Exercise Price in
          effect  immediately prior to such subdivision shall be proportionately
          reduced, and conversely,  in case the outstanding common shares of the
          Corporation shall be consolidated into a smaller number of shares, the
          Exercise Price in effect immediately prior to such consolidation shall
          be proportionately  increased (such subdivision or consolidation being
          hereinafter referred to as a "Capital Reorganization").

     (b)  Upon each  adjustment of the Exercise  Price as provided  herein,  the
          Agent shall  thereafter be entitled to acquire,  at the Exercise Price
          resulting from such adjustment,  in lieu of the number of Shares which
          the Agent would have been previously  entitled to acquire,  the number
          of  Shares  obtained  by  multiplying  the  Exercise  Price in  effect
          immediately  prior to such adjustment by the number of Shares that may
          be  acquired  hereunder  immediately  prior  to  such  adjustment  and
          dividing the product thereof by the Exercise Price resulting from such
          adjustment.

(7)  Change or  Reclassification  of Shares.  In the event the Corporation shall
     change or reclassify its  outstanding  common shares into a different class
     of securities, the rights evidenced by the Agent's Option shall be adjusted
     as follows so as to apply to the successor class of securities:
<PAGE>
                                      -3-

     (a)  the number of the successor class of securities  which the Agent shall
          be entitled to acquire shall be that number of the successor  class of
          securities  which a holder of that  number of  Shares  subject  to the
          unexercised   Agent's  Option  immediately  prior  to  the  change  or
          reclassification  would have been entitled to by reason of such change
          or reclassification; and

     (b)  the Exercise  Price shall be  determined by  multiplying  the Exercise
          Price in effect immediately prior to the change or reclassification by
          the  number  of  Shares  subject  to the  unexercised  Agent's  Option
          immediately prior to the change or reclassification,  and dividing the
          product  thereof by the number of successor  securities  determined in
          Section 1(7)(a) hereof.

(8)  Offering to  Shareholder.  If and whenever at any time prior to the Time of
     Expiry, the Corporation shall fix a record date or if a date of entitlement
     to  receive  is  otherwise  established  (any such date  being  hereinafter
     referred to in this Section 1(8) as the "record  date") for the issuance of
     rights,  options or warrants to all or substantially all the holders or the
     outstanding  common shares of the Corporation  entitling them, for a period
     expiring  not more than 45 days  after  such  record  date (any such  event
     hereinafter being referred to as a "Rights Offering"),  to subscribe for or
     purchase common shares of the Corporation or securities convertible into or
     exchangeable  for common shares at a price per common share or, as the case
     may be,  having a conversion  or exchange  price per common share less than
     95% of the Current Market Value (as defined below) on such record date, the
     Exercise Price shall be adjusted immediately after such record date so that
     it shall equal the price  determined by  multiplying  the Exercise Price in
     effect on such record date by a fraction,  (i) the numerator of which shall
     be the  aggregate of (A) the number of common  shares  outstanding  on such
     record date and (B) a number equal to the number arrived at by dividing the
     product of the number of common  shares that may be purchased or subscribed
     for (or into which they may be converted or  exchanged)  multiplied  by the
     subscription or purchase price of the common shares offered for purchase or
     subscription  (or the  conversion or exchange  price of the  convertible or
     exchangeable  securities so offered) by such Current Market Value, and (ii)
     the denominator of which shall be the aggregate of (X) the number of common
     shares  outstanding  on such record  date and (Y) the number of  additional
     common  shares so offered (or into which the  convertible  or  exchangeable
     securities so offered are convertible or exchangeable). Common shares owned
     by or held for the  account of the  Corporation  or any  subsidiary  of the
     Corporation  shall be deemed not to be  outstanding  for the purpose of any
     such computation.  Such adjustment shall be made successively whenever such
     a record date is fixed.  To the extent that any rights or warrants  are not
     so issued or any such rights or  warrants  are not  exercised  prior to the
     expiration  thereof,  the Exercise  Price shall then be  readjusted  to the
     Exercise  Price that would  then be in effect if such  record  date had not
     been fixed or to the Exercise Price that would then be in effect based upon
     the number of common shares or conversion or exchange  rights  contained in
     convertible or exchangeable securities actually issued upon the exercise of
     such rights or warrants, as the case may be.
<PAGE>
                                      -4-

(9)  Special  Distribution.  If and  whenever  at any time  prior to the Time of
     Expiry, the Corporation shall fix a record date for the distribution to all
     or substantially all the holders of common shares of:

     (a)  shares  of  any  class,  whether  of  the  Corporation  or  any  other
          corporation;

     (b)  rights, options or warrants;

     (c)  evidences or indebtedness; or

     (d)  other assets or property;

     and if such distribution does not constitute a Capital  Reorganization or a
     Rights  Offering  or does  not  consist  of  rights,  options  or  warrants
     entitling the holders of common shares of the  Corporation to subscribe for
     or purchase common shares of the Corporation for a period expiring not more
     than 45 days after such  record  date and at a price per share (or having a
     conversion  or  exchange  price per  share) of at least 95% of the  Current
     Market Value of the common  shares of the  Corporation  on such record date
     (any such non-excluded  event being  hereinafter  referred to as a "Special
     Distribution") the Exercise Price shall be adjusted  immediately after such
     record date so that it shall equal the price  determined by multiplying the
     Exercise  Price  in  effect  on such  record  date by a  fraction:  (A) the
     numerator of which shall be the amount by which (1) the amount  obtained by
     multiplying the number of common shares of the  Corporation  outstanding on
     such record date by the Current  Market  Value of the common  shares of the
     Corporation  on such record  date,  exceeds  (2) the fair market  value (as
     reasonably  determined by the directors of the  Corporation  in good faith,
     which  determination  shall be conclusive) to the holders of such shares of
     such Special  Distribution;  and (B) the  denominator of which shall be the
     total number of common shares of the Corporation outstanding on such record
     date  multiplied  by such Current  Market  Value.  Any common shares of the
     Corporation  owned by or held for the account of the  Corporation  shall be
     deemed not to be outstanding for the purpose of any such computation.  Such
     adjustment shall be made successively whenever such a record date is fixed.
     To the extent  that such  Special  Distribution  is not so made or any such
     rights,  options or  warrants  are not  exercised  prior to the  expiration
     thereof,  the Exercise Price shall then be readjusted to the Exercise Price
     which  would then be in effect if such record date had not been fixed or if
     such expired rights, options or warrants had not been issued.

(10) Carry Over of  Adjustments.  No adjustment  of the Exercise  Price shall be
     made if the amount of such adjustment shall be less than 1% of the Exercise
     Price  in  effect  immediately  prior  to  the  event  giving  rise  to the
     adjustment,  provided, however, that in such case any adjustment that would
     otherwise be required then to be made shall be carried forward and shall be
     made at the time of and together with the next subsequent adjustment which,
     together with any adjustment so carried  forward,  shall amount to at least
     1% of the Exercise Price.
<PAGE>
                                      -5-

(11) Notice of Adjustment.  Upon any adjustment of the number of Shares and upon
     any  adjustment  of the  Exercise  Price,  then and in each  such  case the
     Corporation  shall give written notice  thereof to the Agent,  which notice
     shall  state the  Exercise  Price and the  number of Shares  subject to the
     unexercised  Agent's Option resulting from such  adjustment,  and shall set
     forth in  reasonable  detail the method of  calculation  and the facts upon
     which such calculation is based.  Upon the request of the Agent there shall
     be transmitted promptly to the Agent a statement of the firm of independent
     chartered  accountants  retained to audit the  financial  statements of the
     Corporation  to the  effect  that such firm  concurs  in the  Corporation's
     calculation of the change.

(12) Other Notice. In case at any time:

     (a)  the  Corporation  shall  declare any dividend  upon its common  shares
          payable in common shares;

     (b)  the Corporation  shall offer for  subscription pro rata to the holders
          of its  common  shares  any  additional  shares  of any class or other
          rights;

     (c)  there shall be any capital  reorganization or  reclassification of the
          capital stock of the Corporation,  or  consolidation,  amalgamation or
          merger of the Corporation with, or sale of all or substantially all of
          its assets to, another corporation; or

     (d)  there shall be a voluntary or involuntary dissolution,  liquidation or
          winding-up of the Corporation;

     then, in any one or more of such cases,  the Corporation  shall give to the
     Agent  (A) at least 10 days'  prior  written  notice of the date on which a
     record  shall be taken  for such  dividend,  distribution  or  subscription
     rights  or  for  determining   rights  to  vote  in  respect  of  any  such
     reorganization,  reclassification,   consolidation,  merger,  amalgamation,
     sale,  dissolution,  liquidation  or winding-up  and (B) in the case of any
     such  reorganization,   reclassification,   consolidation,   merger,  sale,
     dissolution,  liquidation  or  winding-up,  at least 10 days prior  written
     notice  of the  date  when  the same  shall  take  place.  Such  notice  in
     accordance with the foregoing clause (A) shall also specify, in the case of
     any such dividend,  distribution or subscription  rights, the date on which
     the  holders  of  Shares  shall be  entitled  thereto,  and such  notice in
     accordance  with the  foregoing  clause (B) shall also  specify the date on
     which the holders of Shares shall be entitled to exchange  their Shares for
     securities  or  other  property   deliverable  upon  such   reorganization,
     reclassification,  consolidation,  merger, amalgamation, sale, dissolution,
     liquidation or winding-up, as the case may be.

(13) Shares to be Reserved.  The  Corporation  will at all times keep available,
     and reserve if necessary  under Canadian law, out of its authorized  common
     shares,  solely for the  purpose of issue upon the  exercise of the Agent's
     Option,  such number of Shares as shall then be issuable  upon the exercise
     of the Agent's Option,  as the case may be. The  Corporation  covenants and
     agrees that all Shares that shall be so issuable will,
<PAGE>
                                      -6-

     upon issuance,  be duly authorized and, in respect of the Shares, be issued
     as fully paid and non-assessable. The Corporation will take such actions as
     may be reasonably  necessary and as are within its power to ensure that all
     such Shares may be so issued without  violation of any  applicable  laws or
     the applicable requirements of any exchange upon which the common shares of
     the  Corporation  may be listed or in  respect  of which  such  shares  are
     qualified for unlisted trading privileges.

(14) Current Market Value.  For the purposes of any computation  hereunder,  the
     "Current Market Value" at any date shall be the weighted average sale price
     per share for the common shares of the  Corporation  for the 20 consecutive
     trading days immediately  before such date on such principal stock exchange
     or over-the-counter market as the common shares of the Corporation may then
     be listed or quoted  (as the case may be),  or, if the shares in respect of
     which a determination  of Current Market Value is being made are not listed
     on  any  stock   exchange   or  quoted   for   trading   by  a   recognized
     over-the-counter  market,  the Current  Market Value shall be determined by
     the  firm of  independent  chartered  accountants  retained  to  audit  the
     financial  statements  of the  Corporation,  which  determination  shall be
     conclusive.  The weighted average price shall be determined by dividing the
     aggregate  sale price of all such shares sold on the said  exchange  during
     the said 20 consecutive  trading days by the total number of such shares so
     sold.

Section 2      Replacement.

     Upon  receipt of  evidence  satisfactory  to the  Corporation  of the loss,
theft,  destruction  or mutilation of this Agent's  Option  Certificate  and, if
requested by the Corporation,  upon delivery of a bond of indemnity satisfactory
to the  Corporation  (or,  in the case of  mutilation,  upon  surrender  of this
Agent's  Option  Certificate),  the  Corporation  will  issue  to  the  Agent  a
replacement  certificate  (containing  the same  terms  and  conditions  as this
Agent's Option Certificate).

Section 3      No Transfer of Option.

     The Agent's Option  evidenced hereby are  non-assignable,  non-transferable
and  non-negotiable and may not be exercised by or for the benefit of any person
other than the Agent.

Section 4      Expiry Date.

     The Agent's Option shall expire and all rights to purchase Shares hereunder
shall cease and become null and void at 4:00 p.m. (Edmonton time) on January 21,
2002.

Section 5      Inability to Deliver Shares.

     If for any  reason,  other than the  failure  or default of the Agent,  the
Corporation  is unable to issue and  deliver the Shares or other  securities  as
contemplated  herein to the Agent upon the proper  exercise  by the Agent of the
right to purchase any of the Shares covered by this Agent's Option  Certificate,
the  Corporation  may pay,  at its option and in  complete  satisfaction  of its
obligations hereunder,  to the Agent, in cash, an amount equal to the difference
between the Exercise Price and the fair market value (as  reasonably  determined
by
<PAGE>
                                      -7-

the directors of the Corporation in good faith, which  determination shall be
conclusive) of such Shares or other securities on the Exercise Date.

Section 6      Governing Law.

     The laws of the  Province  of  Alberta  and the laws of  Canada  applicable
therein shall govern the Agent's Option.

Section 7      Successor.

     This  certificate  shall enure to the benefit of and shall be binding  upon
the Agent and the Corporation and their respective successors.

Section 8      General.

     The holding of the Agent's Option evidenced by this  certificate  shall not
constitute the holder a shareholder of the  Corporation or entitle the holder to
any right or interest in respect  thereof  except as expressly  provided in this
certificate.

     IN  WITNESS   WHEREOF  the  Corporation  has  caused  this  Agent's  Option
Certificate to be signed by its duly authorized  officers and its corporate seal
hereto affixed.

     DATED as of the _____ day of _____________________, _______.

                                        BROCKER TECHNOLOGY GROUP
                                        LTD.

                                        By:
                                           -------------------------------------
                                             Authorized Signing Officer

<PAGE>

                                    EXHIBIT 1
                              Election to Exercise

     The undersigned  hereby  irrevocably  elects to exercise the Agent's Option
granted by  Brocker  Technology  Group  Ltd.  for the number of Shares (or other
property or securities subject thereto) as set forth below:

     (a)  Number of Shares to be Acquired: ________________

     (b)  Exercise Price per Share: _________________

     (c)  Aggregate Purchase Price [(a) multiplied by (b)] $_________________

and hereby  tenders a certified  cheque,  bank draft or cash for such  aggregate
purchase  price,  and directs  such Shares to be  registered  and a  certificate
therefor to be issued and delivered as directed below.

     DATED this _____ day of ___________________, _______.

                                        THOMSON KERNAGHAN & CO.
                                        LIMITED

                                        By:
                                           -------------------------------------
                                             Authorized Signing Officer

Direction as to Registration:

Name of Registered Holder:                 -------------------------------------

Address of Registered Holder               -------------------------------------

                                           -------------------------------------

                                           -------------------------------------

Direction as to Delivery:

Name of Contact:                           -------------------------------------

Address of Contact:                        -------------------------------------

                                           -------------------------------------

                                           -------------------------------------

<PAGE>

                                SCHEDULE 3(2)(b)
                             FORM OF AGENT'S OPTION

                      AGENT'S OPTION TO PURCHASE SHARES OF
                          BROCKER TECHNOLOGY GROUP LTD.

           (incorporated under the Business Corporation Act (Alberta))

     THIS CERTIFIES  that, for value received,  Thomson  Kernaghan & Co. Limited
(the  "Agent")  is the  registered  holder of an Agent's  Option  (the  "Agent's
Option")  which  entitles the holder,  subject to the terms and  conditions  set
forth in this Certificate,  to purchase from Brocker  Technology Group Ltd. (the
"Corporation") up to 200,000 fully paid and non-assessable  common shares of the
Corporation  (the  "Shares")  at any  time  commencing  on the date  hereof  and
continuing  up to 4:00 p.m.  (Edmonton  time) on January  21, 2002 (the "Time of
Expiry")  on payment of $6.25 per Share (the  "Exercise  Price").  The number of
Shares that the Agent is entitled to acquire upon exercise of the Agent's Option
and payment of the  Exercise  Price are  subject to  adjustment  as  hereinafter
provided.

Section 9      Exercise of Agent's Option.

(1)  Election to  Purchase.  The rights  evidenced  by this  certificate  may be
     exercised  by the  Agent in whole  or in part  and in  accordance  with the
     provisions  hereof by delivery of an Election to Exercise in  substantially
     the form attached hereto as Exhibit "1",  properly  completed and executed,
     together  with  payment  of the  Exercise  Price  for the  number of Shares
     specified in the Election to Exercise to the  Corporation at the offices of
     Chamberlain  Hutchison,  1103 Toronto  Dominion  Tower,  10088-102  Avenue,
     Edmonton, Alberta T5J 2Z1, Attention:  Andrew J. Chamberlain, or such other
     address in Canada as may be notified in writing by the Corporation.  In the
     event that the rights  evidenced by this certificate are exercised in part,
     the Corporation  shall,  contemporaneously  with the issuance of the Shares
     issuable on the exercise of the Agent's  Option so exercised,  issue to the
     Agent,  an Agent's  Option on identical  terms in respect of that number of
     Shares in respect of which the Agent has not exercised the rights evidenced
     by this certificate.

(2)  Exercise.  The  Corporation  shall, on the date it receives a duly executed
     Election  to  Exercise  and the  Exercise  Price  for the  number of shares
     specified in the Election to Exercise  (the  "Exercise  Date"),  issue that
     number of Shares  specified  in the  Election to Exercise as fully paid and
     non-assessable Shares of the Corporation.

(3)  Certificate. As promptly as practicable after the Exercise Date and, in any
     event,  within five  business  days of receipt of the Election to Exercise,
     the  Corporation  shall issue and deliver to the Agent,  registered in such
     name or names as the Agent  may  direct  or if no such  direction  has been
     given,  in the name of the Agent,  certificate(s)  for the number of Shares
     specified in the Election to Exercise. To the extent permitted by law, such
     exercise  shall be deemed to have been effected as of the close of business
     on the Exercise Date, and at such time the rights of the Agent with respect
     to
<PAGE>
                                      -2-

     the  number of Shares in  respect  of which  the  Agent's  Option  has been
     exercised shall cease, and the person or persons in whose name or names any
     certificate(s)  for Shares shall then be issuable upon such exercise  shall
     be deemed to have  become  the  holder or  holders  of record of the Shares
     represented thereby.

(4)  Fractional  Shares.  Fractional  shares  shall not be issued and the holder
     shall  not be  entitled  to any  compensation  or  other  right  in lieu of
     fractional Shares.

(5)  Corporate Changes. Subject to Section 5 hereof, if the Corporation shall be
     a  party  to any  reorganization,  merger,  dissolution  or  sale of all or
     substantially  all of its  assets,  whether or not the  Corporation  is the
     surviving entity, the Agent's Option evidenced by this certificate shall be
     adjusted  so as to apply to the  securities  to which  the  holder  of that
     number of Shares subject to the unexercised  Agent's Option would have been
     entitled by reason of such reorganization,  merger,  dissolution or sale of
     all or  substantially  all of its assets (the  "Event"),  and the  Exercise
     Price shall be  adjusted to be the amount  determined  by  multiplying  the
     Exercise  Price in effect  immediately  prior to the Event by the number of
     Shares subject to the unexercised  Agent's Option  immediately prior to the
     Event,  and dividing  the product  thereof by the number of  securities  to
     which the  holder  of that  number of  Shares  subject  to the  unexercised
     Agent's Option would have been entitled to by reason of such Event.

(6)  Subdivision or Consolidation of Shares:

     (a)  In the event the Corporation  shall  subdivide its outstanding  common
          shares into a greater number of common  shares,  the Exercise Price in
          effect  immediately prior to such subdivision shall be proportionately
          reduced, and conversely,  in case the outstanding common shares of the
          Corporation shall be consolidated into a smaller number of shares, the
          Exercise Price in effect immediately prior to such consolidation shall
          be proportionately  increased (such subdivision or consolidation being
          hereinafter referred to as a "Capital Reorganization").

     (b)  Upon each  adjustment of the Exercise  Price as provided  herein,  the
          Agent shall  thereafter be entitled to acquire,  at the Exercise Price
          resulting from such adjustment,  in lieu of the number of Shares which
          the Agent would have been previously  entitled to acquire,  the number
          of  Shares  obtained  by  multiplying  the  Exercise  Price in  effect
          immediately  prior to such adjustment by the number of Shares that may
          be  acquired  hereunder  immediately  prior  to  such  adjustment  and
          dividing the product thereof by the Exercise Price resulting from such
          adjustment.

(7)  Change or  Reclassification  of Shares.  In the event the Corporation shall
     change or reclassify its  outstanding  common shares into a different class
     of securities, the rights evidenced by the Agent's Option shall be adjusted
     as follows so as to apply to the successor class of securities:
<PAGE>
                                      -3-

     (a)  the number of the successor class of securities  which the Agent shall
          be entitled to acquire shall be that number of the successor  class of
          securities  which a holder of that  number of  Shares  subject  to the
          unexercised   Agent's  Option  immediately  prior  to  the  change  or
          reclassification  would have been entitled to by reason of such change
          or reclassification; and

     (b)  the Exercise  Price shall be  determined by  multiplying  the Exercise
          Price in effect immediately prior to the change or reclassification by
          the  number  of  Shares  subject  to the  unexercised  Agent's  Option
          immediately prior to the change or reclassification,  and dividing the
          product  thereof by the number of successor  securities  determined in
          Section 1(7)(a) hereof.

(8)  Offering to  Shareholder.  If and whenever at any time prior to the Time of
     Expiry, the Corporation shall fix a record date or if a date of entitlement
     to  receive  is  otherwise  established  (any such date  being  hereinafter
     referred to in this Section 1(8) as the "record  date") for the issuance of
     rights,  options or warrants to all or substantially all the holders or the
     outstanding  common shares of the Corporation  entitling them, for a period
     expiring  not more than 45 days  after  such  record  date (any such  event
     hereinafter being referred to as a "Rights Offering"),  to subscribe for or
     purchase common shares of the Corporation or securities convertible into or
     exchangeable  for common shares at a price per common share or, as the case
     may be,  having a conversion  or exchange  price per common share less than
     95% of the Current Market Value (as defined below) on such record date, the
     Exercise Price shall be adjusted immediately after such record date so that
     it shall equal the price  determined by  multiplying  the Exercise Price in
     effect on such record date by a fraction,  (i) the numerator of which shall
     be the  aggregate of (A) the number of common  shares  outstanding  on such
     record date and (B) a number equal to the number arrived at by dividing the
     product of the number of common  shares that may be purchased or subscribed
     for (or into which they may be converted or  exchanged)  multiplied  by the
     subscription or purchase price of the common shares offered for purchase or
     subscription  (or the  conversion or exchange  price of the  convertible or
     exchangeable  securities so offered) by such Current Market Value, and (ii)
     the denominator of which shall be the aggregate of (X) the number of common
     shares  outstanding  on such record  date and (Y) the number of  additional
     common  shares so offered (or into which the  convertible  or  exchangeable
     securities so offered are convertible or exchangeable). Common shares owned
     by or held for the  account of the  Corporation  or any  subsidiary  of the
     Corporation  shall be deemed not to be  outstanding  for the purpose of any
     such computation.  Such adjustment shall be made successively whenever such
     a record date is fixed.  To the extent that any rights or warrants  are not
     so issued or any such rights or  warrants  are not  exercised  prior to the
     expiration  thereof,  the Exercise  Price shall then be  readjusted  to the
     Exercise  Price that would  then be in effect if such  record  date had not
     been fixed or to the Exercise Price that would then be in effect based upon
     the number of common shares or conversion or exchange  rights  contained in
     convertible or exchangeable securities actually issued upon the exercise of
     such rights or warrants, as the case may be.
<PAGE>
                                      -4-

(9)  Special  Distribution.  If and  whenever  at any time  prior to the Time of
     Expiry, the Corporation shall fix a record date for the distribution to all
     or substantially all the holders of common shares of:

     (a)  shares  of  any  class,  whether  of  the  Corporation  or  any  other
          corporation;

     (b)  rights, options or warrants;

     (c)  evidences or indebtedness; or

     (d)  other assets or property;

     and if such distribution does not constitute a Capital  Reorganization or a
     Rights  Offering  or does  not  consist  of  rights,  options  or  warrants
     entitling the holders of common shares of the  Corporation to subscribe for
     or purchase common shares of the Corporation for a period expiring not more
     than 45 days after such  record  date and at a price per share (or having a
     conversion  or  exchange  price per  share) of at least 95% of the  Current
     Market Value of the common  shares of the  Corporation  on such record date
     (any such non-excluded  event being  hereinafter  referred to as a "Special
     Distribution") the Exercise Price shall be adjusted  immediately after such
     record date so that it shall equal the price  determined by multiplying the
     Exercise  Price  in  effect  on such  record  date by a  fraction:  (A) the
     numerator of which shall be the amount by which (1) the amount  obtained by
     multiplying the number of common shares of the  Corporation  outstanding on
     such record date by the Current  Market  Value of the common  shares of the
     Corporation  on such record  date,  exceeds  (2) the fair market  value (as
     reasonably  determined by the directors of the  Corporation  in good faith,
     which  determination  shall be conclusive) to the holders of such shares of
     such Special  Distribution;  and (B) the  denominator of which shall be the
     total number of common shares of the Corporation outstanding on such record
     date  multiplied  by such Current  Market  Value.  Any common shares of the
     Corporation  owned by or held for the account of the  Corporation  shall be
     deemed not to be outstanding for the purpose of any such computation.  Such
     adjustment shall be made successively whenever such a record date is fixed.
     To the extent  that such  Special  Distribution  is not so made or any such
     rights,  options or  warrants  are not  exercised  prior to the  expiration
     thereof,  the Exercise Price shall then be readjusted to the Exercise Price
     which  would then be in effect if such record date had not been fixed or if
     such expired rights, options or warrants had not been issued.

(10) Carry Over of  Adjustments.  No adjustment  of the Exercise  Price shall be
     made if the amount of such adjustment shall be less than 1% of the Exercise
     Price  in  effect  immediately  prior  to  the  event  giving  rise  to the
     adjustment,  provided, however, that in such case any adjustment that would
     otherwise be required then to be made shall be carried forward and shall be
     made at the time of and together with the next subsequent adjustment which,
     together with any adjustment so carried  forward,  shall amount to at least
     1% of the Exercise Price.
<PAGE>
                                      -5-

(11) Notice of Adjustment.  Upon any adjustment of the number of Shares and upon
     any  adjustment  of the  Exercise  Price,  then and in each  such  case the
     Corporation  shall give written notice  thereof to the Agent,  which notice
     shall  state the  Exercise  Price and the  number of Shares  subject to the
     unexercised  Agent's Option resulting from such  adjustment,  and shall set
     forth in  reasonable  detail the method of  calculation  and the facts upon
     which such calculation is based.  Upon the request of the Agent there shall
     be transmitted promptly to the Agent a statement of the firm of independent
     chartered  accountants  retained to audit the  financial  statements of the
     Corporation  to the  effect  that such firm  concurs  in the  Corporation's
     calculation of the change.

(12) Other Notice. In case at any time:

     (a)  the  Corporation  shall  declare any dividend  upon its common  shares
          payable in common shares;

     (b)  the Corporation  shall offer for  subscription pro rata to the holders
          of its  common  shares  any  additional  shares  of any class or other
          rights;

     (c)  there shall be any capital  reorganization or  reclassification of the
          capital stock of the Corporation,  or  consolidation,  amalgamation or
          merger of the Corporation with, or sale of all or substantially all of
          its assets to, another corporation; or

     (d)  there shall be a voluntary or involuntary dissolution,  liquidation or
          winding-up of the Corporation;

     then, in any one or more of such cases,  the Corporation  shall give to the
     Agent  (A) at least 10 days'  prior  written  notice of the date on which a
     record  shall be taken  for such  dividend,  distribution  or  subscription
     rights  or  for  determining   rights  to  vote  in  respect  of  any  such
     reorganization,  reclassification,   consolidation,  merger,  amalgamation,
     sale,  dissolution,  liquidation  or winding-up  and (B) in the case of any
     such  reorganization,   reclassification,   consolidation,   merger,  sale,
     dissolution,  liquidation  or  winding-up,  at least 10 days prior  written
     notice  of the  date  when  the same  shall  take  place.  Such  notice  in
     accordance with the foregoing clause (A) shall also specify, in the case of
     any such dividend,  distribution or subscription  rights, the date on which
     the  holders  of  Shares  shall be  entitled  thereto,  and such  notice in
     accordance  with the  foregoing  clause (B) shall also  specify the date on
     which the holders of Shares shall be entitled to exchange  their Shares for
     securities  or  other  property   deliverable  upon  such   reorganization,
     reclassification,  consolidation,  merger, amalgamation, sale, dissolution,
     liquidation or winding-up, as the case may be.

(13) Shares to be Reserved.  The  Corporation  will at all times keep available,
     and reserve if necessary  under Canadian law, out of its authorized  common
     shares,  solely for the  purpose of issue upon the  exercise of the Agent's
     Option,  such number of Shares as shall then be issuable  upon the exercise
     of the Agent's Option,  as the case may be. The  Corporation  covenants and
     agrees that all Shares that shall be so issuable will,
<PAGE>
                                      -6-

     upon issuance,  be duly authorized and, in respect of the Shares, be issued
     as fully paid and non-assessable. The Corporation will take such actions as
     may be reasonably  necessary and as are within its power to ensure that all
     such Shares may be so issued without  violation of any  applicable  laws or
     the applicable requirements of any exchange upon which the common shares of
     the  Corporation  may be listed or in  respect  of which  such  shares  are
     qualified for unlisted trading privileges.

(14) Current Market Value.  For the purposes of any computation  hereunder,  the
     "Current Market Value" at any date shall be the weighted average sale price
     per share for the common shares of the  Corporation  for the 20 consecutive
     trading days immediately  before such date on such principal stock exchange
     or over-the-counter market as the common shares of the Corporation may then
     be listed or quoted  (as the case may be),  or, if the shares in respect of
     which a determination  of Current Market Value is being made are not listed
     on  any  stock   exchange   or  quoted   for   trading   by  a   recognized
     over-the-counter  market,  the Current  Market Value shall be determined by
     the  firm of  independent  chartered  accountants  retained  to  audit  the
     financial  statements  of the  Corporation,  which  determination  shall be
     conclusive.  The weighted average price shall be determined by dividing the
     aggregate  sale price of all such shares sold on the said  exchange  during
     the said 20 consecutive  trading days by the total number of such shares so
     sold.

Section 10     Replacement.

     Upon  receipt of  evidence  satisfactory  to the  Corporation  of the loss,
theft,  destruction  or mutilation of this Agent's  Option  Certificate  and, if
requested by the Corporation,  upon delivery of a bond of indemnity satisfactory
to the  Corporation  (or,  in the case of  mutilation,  upon  surrender  of this
Agent's  Option  Certificate),  the  Corporation  will  issue  to  the  Agent  a
replacement  certificate  (containing  the same  terms  and  conditions  as this
Agent's Option Certificate).

Section 11     No Transfer of Option.

     The Agent's Option  evidenced hereby are  non-assignable,  non-transferable
and  non-negotiable and may not be exercised by or for the benefit of any person
other than the Agent.

Section 12     Expiry Date.

     The Agent's Option shall expire and all rights to purchase Shares hereunder
shall cease and become null and void at 4:00 p.m. (Edmonton time) on January 21,
2002.

Section 13     Inability to Deliver Shares.

     If for any  reason,  other than the  failure  or default of the Agent,  the
Corporation  is unable to issue and  deliver the Shares or other  securities  as
contemplated  herein to the Agent upon the proper  exercise  by the Agent of the
right to purchase any of the Shares covered by this Agent's Option  Certificate,
the  Corporation  may pay,  at its option and in  complete  satisfaction  of its
obligations hereunder,  to the Agent, in cash, an amount equal to the difference
between the Exercise Price and the fair market value (as  reasonably  determined
by
<PAGE>
                                      -7-

the directors of the Corporation in good faith, which  determination shall be
conclusive) of such Shares or other securities on the Exercise Date.

Section 14     Governing Law.

     The laws of the  Province  of  Alberta  and the laws of  Canada  applicable
therein shall govern the Agent's Option.

Section 15     Successor.

     This  certificate  shall enure to the benefit of and shall be binding  upon
the Agent and the Corporation and their respective successors.

Section 16     General.

     The holding of the Agent's Option evidenced by this  certificate  shall not
constitute the holder a shareholder of the  Corporation or entitle the holder to
any right or interest in respect  thereof  except as expressly  provided in this
certificate.

     IN  WITNESS   WHEREOF  the  Corporation  has  caused  this  Agent's  Option
Certificate to be signed by its duly authorized  officers and its corporate seal
hereto affixed.

     DATED as of the _____ day of _____________________, _______.

                                        BROCKER TECHNOLOGY GROUP
                                        LTD.

                                        By:
                                           -------------------------------------
                                             Authorized Signing Officer

<PAGE>
                                  SCHEDULE 3(3)
                         FORM OF SUBSCRIPTION AGREEMENT

Issue of up to 1,800,000 Special Warrants of Brocker  Technology Group Ltd. at a
Subscription  Price of $6.25 per Special  Warrant as  described  in the attached
Term Sheet.  Each Special  Warrant  shall  entitle the holder to acquire,  at no
additional  cost,  one (1) common share,  with an attributed  value of $6.25 per
share.

TO:  Brocker Technology Group Ltd.
     (the "Corporation")
     2150 Scotia One
     10060 Jasper Avenue
     Edmonton, Alberta
     T5J 3R8

1.   Subscription:  The Subscriber  hereby subscribes for and agrees to purchase
     __________  Special  Warrants  of the  Corporation  at a price of $6.25 per
     Special Warrant for an aggregate  subscription  price of $____________ upon
     the terms and conditions set out herein.

2.   Acknowledgement:   In   subscribing   for  the  Special   Warrants  of  the
     Corporation,  the Subscriber hereby irrevocably represents and acknowledges
     that:

     (a)  in subscribing for the Special Warrants,  I am purchasing as principal
          the  said  Special  Warrants  pursuant  to  Section  107(1)(d)  of the
          Securities  Act (Alberta) or 72(1)(d) of The  Securities Act (Ontario)
          and that the said purchase has an aggregate  acquisition cost to me of
          not less than  $97,000 if a resident of Alberta,  British  Columbia or
          Manitoba,  $100,000 if a resident of  Newfoundland  and  $150,000 if a
          resident of Ontario or Quebec; and

     (b)  the  Corporation  and its  counsel  are  relying  upon  the  foregoing
          representation and acknowledgement.

3.   Representations,  Warranties and Covenants:  By executing this Subscription
     Agreement,  the  Subscriber  represents,  warrants  and  covenants  to  the
     Corporation  (and  acknowledges  that the  Corporation  and its counsel are
     relying thereon) that:

     (a)  it has been  independently  advised as to restrictions with respect to
          trading in the Special  Warrants  (which for  purposes of this section
          include the Common  Shares  issuable  upon the exercise of the Special
          Warrants)  imposed  by  applicable   securities   legislation  in  the
          jurisdiction in which it resides,  confirms that no representation has
          been  made  to it by or on  behalf  of the  Corporation  with  respect
          thereto,  acknowledges that it is aware of the  characteristics of the
          Special Warrants,  the risks relating to an investment  therein and of
          the fact that it may not be able to resell the Special Warrants except
          in accordance
<PAGE>
                                      -2-

          with limited  exemptions under applicable  securities  legislation and
          regulatory policy.

     (b)  the sale of the  Special  Warrants  has not been  qualified  under the
          securities  legislation of any province by way of prospectus,  that it
          is purchasing the Special Warrants pursuant to an exemption  contained
          in  the  securities  legislation  of the  Province  of  Alberta,  such
          exemption will exempt the Corporation  from certain of the obligations
          of such securities legislation,  and that the Special Warrants will be
          subject to certain restrictions on resale;

     (c)  except for the Term Sheet and publicly available  information,  it has
          not  received,  nor has it  requested,  nor  does it have  any need to
          receive, any offering memorandum, or any other document describing the
          business and affairs of the  Corporation  which has been  prepared for
          delivery  to, and  reviewed  by,  prospective  purchasers  in order to
          assist it in making an  investment  decision in respect of the Special
          Warrants and it has not become aware of any  advertisement  in printed
          media of general and regular  paid  circulation,  radio or  television
          with respect to the  distribution of the Special Warrants or any other
          advertisement;

     (d)  if an individual, he/she is of the full age of majority and is legally
          competent to execute this Subscription  Agreement and take all actions
          pursuant hereto;

     (e)  this  Subscription  Agreement  has been duly and  validly  authorized,
          executed and delivered by and constitutes a legal, valid,  binding and
          enforceable obligation of the Subscriber;

     (f)  it has such  knowledge  in  financial  and  business  affairs as to be
          capable of evaluating  the merits and risks of its  investment  and is
          able to bear the economic risk of loss of its investment;

     (g)  if required by applicable securities  legislation,  policy or order or
          securities  commission,  stock exchange or other regulatory authority,
          the Subscriber will execute,  deliver,  file and otherwise  assist the
          Corporation in filing such reports,  undertakings  and other documents
          with respect to the issue of the Special Warrants  (including  without
          limitation, any undertaking required by The Toronto Stock Exchange) as
          may be required; and

     (h)  if the Subscriber is a corporation,  partnership or syndicate,  it has
          not been created  solely to permit a purchase of the Special  Warrants
          without a prospectus by groups of individuals  whose  individual share
          of the aggregate acquisition cost of the Special Warrants is less than
          sufficient to ensure the  availability of an exemption from prospectus
          requirement of applicable securities legislation,  and it is an entity
          which  pre-existed  the offering of the Special  Warrants  with a bona
          fide purpose other than investment in the Special Warrants.
<PAGE>
                                      -3-

The  representations,  warranties and covenants of the Subscriber  shall survive
the purchase by the  Subscriber  of the Special  Warrants,  without  limit as to
time.

4.   Acceptance:  The Subscriber  understands that this  Subscription may not be
     accepted by the Corporation,  or may be accepted in whole or in part by the
     Corporation, as it may in its discretion determine.

5.   Release  of  Funds:   The   subscriber   acknowledges   and  agrees   that,
     notwithstanding  that  such  acceptance  is  conditional  upon  receipt  of
     regulatory approval, upon the Corporation's acceptance of this subscription
     it shall be entitled to the immediate  release and use of the subscriptions
     funds.

6.   Terms of Special  Warrants:  The Special  Warrants shall have the following
     terms:

     (a)  Each Special Warrant shall,  upon its exercise,  entitle the holder to
          acquire  one  Common  Share  of the  Corporation  prior  to 4:00  p.m.
          (Edmonton time) on the earlier of:

          (i)  within 5 days of the date  (the  "Qualification  Date"),  if any,
               that the Corporation receives a receipt for the filing of a final
               prospectus  that  qualifies  for  distribution  the common shares
               issuable upon the exercise of the Special Warrants; or

          (ii) twelve months from the date of issuance of the Special Warrants;

          the  earlier of such dates  being  herein  referred  to as the "Expiry
          Date";

     (b)  Any Special Warrants not exercised prior to 4:00 p.m.  (Edmonton time)
          on the Expiry Date shall be deemed to have been  exercised  as at that
          time, without any further action on the part of the holder;

     (c)  By its acceptance of this  subscription the Corporation  undertakes to
          file,  within  120  days  of  issuance  of  the  Special  Warrants,  a
          preliminary  prospectus  to  qualify  the  distribution  of the Common
          Shares  issuable  upon the  exercise  of the Special  Warrants  and to
          obtain, within 150 days of issuance of the Special Warrants, a receipt
          for the filing of a final  prospectus,  provided that the  Corporation
          reserves the right to postpone the filing of a preliminary  prospectus
          or final prospectus if it considers it, in its unfettered  discretion,
          in the best interests of the Corporation to do so as a result of other
          financings or transactions  that may be carried out or contemplated by
          the Corporation.

     (d)  If the  Corporation  has not  filed a  prospectus  within  120 days of
          issuance of the Special Warrants, each special warrants shall upon its
          exercise thereafter, entitle the holder to acquire 1.1 common share of
          the Corporation prior to the Expiry Date.
<PAGE>
                                      -4-

In the event of any  inconsistency  or conflict between the terms of the Special
Warrants set out in this Subscription Agreement and Acknowledgement and the Term
Sheet  attached   hereto,   the  terms  of  this   Subscription   Agreement  and
Acknowledgement shall prevail.

7.   Enurement: Once accepted by the Corporation,  this agreement shall enure to
     the  benefit  of  and be  binding  upon  each  of the  Subscriber  and  the
     Corporation and their respective heirs,  executors,  administrators,  legal
     representatives and successors.

8.   Governing  Law:  This  Subscription  Agreement  shall  be  governed  by and
     construed in accordance with the laws of the Province of Alberta.

     IN  WITNESS  WHEREOF,   the  undersigned  has  executed  this  Subscription
Agreement and Acknowledgement as of the date specified below.

-----------------------------------    --------------------------------------
Number of Special Warrants             Name of Subscriber (please print)

                                    By:
-----------------------------------    -----------------------------------------
Aggregate Purchase Price               (Signature of or on behalf of Subscriber)
($6.25 per Special Warrant)

Dated                                  Name & Title: (if not an individual)

-----------------------------------    -----------------------------------------
                                       Address:

                                       -----------------------------------------
                                       -----------------------------------------
                                       -----------------------------------------

                                       Registration Instructions:

                                       Name:
                                       -----------------------------------------
                                       Address:
                                       -----------------------------------------
                                       -----------------------------------------
                                       -----------------------------------------
                                       Delivery Instructions:

                                       Address:
                                       -----------------------------------------
                                       -----------------------------------------
                                       -----------------------------------------
                                       Contact

                                       -----------------------------------------
<PAGE>
                                      -5-

                                            Phone No. and Area Code:

                                          --------------------------------------
                                                       Social Insurance Number:

                                          --------------------------------------

               ACCEPTED AND AGREED:
               BROCKER TECHNOLOGY GROUP LTD.
By:
               -----------------------------------------

Dated:
               -----------------------------------------

     Note:  Special  Warrants issued will be registered in the manner  indicated
above under the heading "Registration Instructions" or if same is left blank, in
the manner in which the Subscriber's name and address appear hereon.  Any change
of Subscriber's address will be effective upon receipt of written notice thereof
by the Corporation.

<PAGE>

                                 SCHEDULE 4 (b)

Brocker  Technology  Group  (NZ)  Limited  (formerly  Brocker  Investments  (NZ)
limited)

Brocker Investments (Austalia) Pty Limited

Brocker Financial Limited

Sealcorp Computer Products Limited ("Sealcorp Computer Products")

Sealcorp Telecommunications Group Limited ("Sealcorp Technologies Group")

Sealcorp Australia Pty Limited ("Sealcorp Pty Ltd. (Australia)")

Easy PC Computer Rentals Limited ("Easy PC Computer Rentals")

Image Craft Limited ("Imagecraft")

Image Craft Australia Pty Limited (formerly Parilott Pty Limited)

Industrial Communications Service Limited ("Industrial Communications Ltd.")

Photo Magic Limited ("Photo Magic")

Powercall Technologies Limited

Powercall Technologies Australia Pty Ltd.

Pritech Corporation Limited ("Pritech Corporation")

Pritech Australia Pty Limited ("Pritech Corporation Australia Pty Ltd.")

Northmark Technologies Limited

1 World Systems Limited (formerly Microchannel Limited)("1 World Systems")

Tech Support Limited

Beachlands Holdings Limited (Non-trading)("Beachland Holdings")

Candia Holdings Limited (Non-trading)("Candia Holdings")

Brocker Properties Limited (Non-trading)("Brocker Properties")

Technologis Financial Limited (Non-trading)("Technologis Finance Ltd.")

Highway Technologies Limited (20%)("Highway Technologies")

Eftpos Corporation Limited (40%)("Eftpos Corp.")

<PAGE>

                           Legal Organisational Chart
                            Brocker Technology Group

                         [ORGANIZATIONAL CHART OMITTED]

<PAGE>

                                 Schedule 4(h)

                    Options/Warrants/Special Warrants/Escrow

Options (unexercised)                                       1,048,000
(see attached list for details)

Warrants                                                    1,000,000
     - July 1999 (@ $1.25)

Special Warrants
          - December 1999                                   1,800,000
          - attached half warrants                            900,000
          - compensation warrants                             486,000

Escrowed Shares                                               963,602
(see below for details)

Escrowed Shares

We have  outstanding  963,602  shares of our common stock held in escrow,  which
shares are subject to the terms of the following issued and escrow arrangements:

(a)  Pursuant  to an Escrow  Agreement  dated  March 31,  1997 (the "ICS  Escrow
     Agreement"),  a total of  760,500  shares  of our  common  stock  have been
     deposited in escrow with Montreal  Trust Company of Canada.  The ICS Escrow
     Agreement  provides  that such  shares may be  released  at the rate of one
     share for each $1.65 of cash generated by or from Industrial Communications
     Service  Ltd.,  subject  to a maximum of  one-third  of such  shares  being
     released each year. To date there have been no releases pursuant to the ICS
     Escrow Agreement.

(b)  Pursuant  to an Escrow  Agreement  dated  April 1, 1997,  the shares of our
     common stock purchased pursuant to the acquisition of the shares of commmon
     stock of Powercall are to be deposited in escrow. As of September 29, 1999,
     there are  186,317  shares of our common  stock  deposited  in escrow to be
     released  based on the cumulative  cash  generated by Powercall,  using the
     share price at March 31, 1998.

<PAGE>

                                      -2-

(c)  Pursuant to an Escrow  Agreement  dated December 24, 1997, the shares to be
     issued pursuant to the acquisition of NZ Online (currently Image Craft) are
     to be deposited in escrow.  Once deposited,  such shares are to be released
     based on cash generated by NZ Online for the years ended March 31, 1999 and
     March 31, 2000, using the share price as at March 31, 1998.

(d)  Of the  shares  issued  pursuant  to the  acquisition  of Easy PC  Computer
     Rentals  Limited,  16,785  common  shares are subject to escrow  conditions
     based on cash flow generated by Easy PC Computer Rentals.

<PAGE>

                                    OPTIONS
                                    -------

                             AS AT JANUARY 21, 2000
--------------------------------------------------------------------------------
DATE OF GRANT       NAME                NUMBER    PRICE         EXPIRY DATE
--------------------------------------------------------------------------------
July 6, 1999        Richard Justice     118,000   $1.41          07/02/04
--------------------------------------------------------------------------------
July 6, 1999        Hal Linstrom        50,000    $1.41          07/02/04
--------------------------------------------------------------------------------
July 6, 1999        Steve Hassall       50,000    $1.41          07/02/04
--------------------------------------------------------------------------------
July 6, 1999        Mike O'Brien        50,000    $1.41          07/02/04
--------------------------------------------------------------------------------
July 6, 1999        Chris Spring        31,000    $1.41          07/02/04
--------------------------------------------------------------------------------
July 6, 1999        Richard MacLean     31,000    $1.41          07/02/04
--------------------------------------------------------------------------------
July 6, 1999        Roger Carter        16,000    $1.41          07/02/04
--------------------------------------------------------------------------------
November 30, 1998   Julia Clarkson      50,000    $1.50          11/30/03
--------------------------------------------------------------------------------
January 26, 1998    Dan Hachey          50,000    $1.99          01/26/03
--------------------------------------------------------------------------------
November 20, 1997   Hal Linstrom        70,000    $1.90          11/20/02
--------------------------------------------------------------------------------
November 20, 1997   Steve Hassall       70,000    $1.90          11/20/02
--------------------------------------------------------------------------------
November 20, 1997   M. O'Brien          70,000    $1.90          11/20/02
--------------------------------------------------------------------------------
November 20, 1997   Gilliam Morgan      20,000    $1.90          11/20/02
--------------------------------------------------------------------------------
November 20, 1997   Nigel Guthrie       20,000    $1.90          11/20/02
--------------------------------------------------------------------------------
November 20, 1997   Chris Spring        50,000    $1.90          11/20/02
--------------------------------------------------------------------------------
November 20, 1997   Josephine James     15,000    $1.90          11/20/02
--------------------------------------------------------------------------------
November 20, 1997   Michael Ridgway     30,000    $1.90          11/20/02
--------------------------------------------------------------------------------
December, 1996      Lori Mitchell       15,000    $1.18          01/12/01
--------------------------------------------------------------------------------
December, 1996      Gillian Morgan      25,000    $1.18          01/12/01
--------------------------------------------------------------------------------
December, 1996      Richard Preston     15,000    $1.18          01/12/01
--------------------------------------------------------------------------------
December, 1996      Casey O'Byrne       57,000    $1.31          01/12/01
--------------------------------------------------------------------------------
December, 1996      Casey O'Byrne       145,000   $1.18          01/12/01
--------------------------------------------------------------------------------
                                        1,048,000
                                        =========
--------------------------------------------------------------------------------

<PAGE>

                                                                   Schedule 4(l)

                          BROCKER TECHNOLOGY GROUP LTD

                              FINANCIAL STATEMENTS

                  FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

INDEX

Index                                                                     Page 1

Auditors' Report                                                          Page 2

Consolidated Balance Sheets                                               Page 3

Consolidated Statements of Earnings                                       Page 4

Consolidated Statements of Retained Earnings                              Page 5

Consolidated Statements of Cash Flows                                     Page 6

Notes to Consolidated Financial Statements                                Page 7

                                                                          Page 1

<PAGE>

Auditors' report to the shareholders

We have audited the consolidated  balance sheets of Brocker Technology Group Ltd
as at March  31,  1999 and 1998 and the  consolidated  statements  of  earnings,
retained  earnings  and cash flows for the YEARS  then  ended.  These  financial
statements   are  the   responsibility   of  the   company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards  require that we plan and perform an audit to obtain
reasonable  assurance  whether  the  financial  statements  are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management, as well as evaluating the overall financial statement presentation.

In our opinion,  these consolidated  financial statements present fairly, in all
material  respects,  the financial  position of the company as at March 31, 1999
and 1998 and the  results of its  operations  and the  changes in its cash flows
cash  flows for the YEARS  then  ended in  accordance  with  generally  accepted
accounting principles.

Chartered Accountants

/s/ KMPG  Auckland, New Zealand
August 18, 1999

                                                                          Page 2

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

CONSOLIDATED BALANCE SHEETS

AS AT MARCH 31, 1999 AND 1998

<TABLE>
<CAPTION>
                                                   Note             1999               1998
                                                                     $                  $
<S>                                                 <C>     <C>                <C>
ASSETS

Current Assets
Cash                                                                  --            205,365
Accounts receivable                                           22,909,294         13,915,450
Other receivables                                   11         1,435,325          1,636,758
Inventories                                                   15,276,865          9,673,446
Prepaid expenses and deposits                                    917,009            538,610
Income taxes recoverable                                         554,538            403,334
Deferred tax asset                                               310,270            214,231
                                                            ------------       ------------

                                                              41,403,301         26,587,194

Deferred Development Costs                           5         1,252,368            490,513

Capital Assets                                       4         5,551,068          3,679,572

Investment in Associated Company                     6           604,433            263,113

Goodwill (Net of accumulated amortisation                      1,876,325          1,478,779
of $1,036,327; 1998 $779,583)                               ------------       ------------
                                                            $ 50,687,495       $ 32,499,171
                                                            ============       ============

LIABILITIES

Current Liabilities
Bank Overdraft                                                    55,433                 --
Accounts payable                                              36,648,724         17,422,333
Accrued liabilities                                            1,596,241          1,387,512
Rental finance liability                            7&8               --          1,094,464
Financing facility                                   8         3,213,122          5,827,883
Current portion of long-term debt                    8           220,028             44,303
                                                            ------------       ------------

                                                              41,733,548         25,776,495

Long-Term Debt                                       8         2,284,578            881,070
                                                            ------------       ------------

                                                              44,018,126         26,657,565
                                                            ------------       ------------
SHAREHOLDERS' EQUITY

Share Capital                                        9         5,761,721          5,367,730
Foreign Currency Translation Reserve                            (799,084)          (881,364)
Retained Earnings                                              1,706,732          1,355,240
                                                            ------------       ------------

                                                               6,669,369          5,841,606
                                                            ------------       ------------
                                                            $ 50,687,495       $ 32,499,171
                                                            ============       ============

Deferred Development Costs                           5
Investment in Associated Company                     6
Commitments                                         16
Contingencies                                       17
Subsequent Events                                   18
</TABLE>

                                                                          Page 3
<PAGE>

Signed on behalf of the Board

/s/ Michael Ridgway                      /s/ Richard Justice
---------------------------------        ---------------------------------------
Director                                 Director

Date:  August 18, 1999

                                                                          Page 4

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

CONSOLIDATED STATEMENT OF EARNINGS

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

<TABLE>
<CAPTION>
                                                 Note               1999               1998
                                                                     $                  $
<S>                                                <C>      <C>                <C>
Revenue
Sales                                                        133,302,640         70,811,220

Cost of Goods Sold                                           115,611,548         56,410,370
                                                            ------------       ------------

Gross Margin                                                  17,691,092         14,400,850
                                                            ------------       ------------

Operating Expenses
Depreciation and amortisation                                  2,010,703          1,692,585
Net interest expense                                           1,409,187            668,845
Salaries and commissions                                       6,348,910          6,431,431
Other operating expenses                                       7,043,157          4,225,153
                                                            ------------       ------------

Total operating expenses                                      16,811,957         13,018,014
                                                            ------------       ------------

Operating Income                                                 879,135          1,382,836

Equity accounted losses of associated company       6             91,330             79,953
                                                            ------------       ------------

Income before Income Tax Provision                               787,805          1,302,883
Income Tax Provision                               10            272,991            506,067
                                                            ------------       ------------

Net Earnings for the year                                   $    514,814       $    796,816
                                                            ============       ============

Earnings Per Common Share                           9 (d)   $       0.03       $       0.06
                                                            ============       ============
</TABLE>

                                                                          Page 5

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

                                                           1999            1998
                                                            $               $

Retained Earnings, Beginning of the year              1,355,240         703,424

Net Earnings for the year                               514,814         796,816

Discount on redemption of preferred shares                   --          50,000

Preferred dividends paid                               (163,322)       (195,000)
                                                    -----------     -----------

Retained Earnings, End of the year                  $ 1,706,732     $ 1,355,240
                                                    ===========     ===========

                                                                          Page 6
<PAGE>

BROCKER TECHNOLOGY GROUP LTD

MOVEMENTS IN FOREIGN CURRENCY TRANSLATION RESERVE

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

                                                            1999           1998
                                                             $              $

Beginning of the year                                   (881,364)       (82,609)

Difference arising on the translation of
foreign operations                                        82,280       (798,755)
                                                       ---------      ---------

End of the year                                        $(799,084)     $(881,364)
                                                       =========      =========

                                                                          Page 7

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

CONSOLIDATED CASH FLOW STATEMENTS

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

<TABLE>
<CAPTION>
                                                Note             1999             1998
                                                                  $                $
<S>                                               <C>     <C>              <C>
Cash flows from operating activities

Receipts from customers                                   124,528,860       62,560,393
Payments to suppliers and employees                      (119,790,928)     (59,656,639)
Interest paid                                              (1,338,547)        (463,756)
Taxation paid                                                (417,742)        (970,979)
                                                        -------------    -------------

Cash flows from operating activities              14        2,981,643        1,469,019

Cash flows from investing activities

Proceeds from the sale of capital assets                       51,597           56,814
Purchase of capital assets                                 (4,673,881)      (1,045,119)
Investment in associated company                             (428,440)        (343,066)
Purchase of subsidiaries                                     (412,566)        (523,181)
                                                        -------------    -------------

Cash flows from investing activities                       (5,463,290)      (1,854,552)

Cash flows from financing activities

Proceeds from share options exercised                          29,500          130,900
Proceeds from share warrants exercised                             --          495,000
Proceeds from mortgage finance raised                       2,428,692               --
Redemption of preferred shares                                     --         (543,049)
Repayment of mortgage finance                                 (70,745)              --
Payment of dividend on preferred shares                      (163,322)        (195,000)
                                                        -------------    -------------

Cash flows from financing activities                        2,224,125         (112,149)
                                                        -------------    -------------

Net decrease in cash equivalents                             (257,522)        (497,682)

Cash at Beginning of the year                                 205,365          602,233

Translation of cash equivalents to
reporting currency                                             (3,286)         100,814
                                                        -------------    -------------

Cash/(Overdraft) at End of the year                     $     (55,433)         205,365
                                                        =============    =============
</TABLE>

                                                                          Page 8

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

1.   BASIS OF PRESENTATION

     Brocker  Technology  Group Ltd, the  Company,  was  incorporated  under the
     Business  Corporation  Act (Alberta) on November 25, 1993, and obtained its
     listing on the Alberta Stock Exchange on April 14, 1994.

     On February  28, 1998 the  Company  transferred  its listing to the Toronto
     Stock Exchange.

     These  financial  statements  have been  prepared  in  accordance  with the
     generally accepted accounting principles of Canada.

     Brocker  Technology  Group  Limited  has chosen to adopt the changes to the
     accounting standards, regarding reporting of Cash Flow Statements, in these
     financial  statements.  The prior period has been  restated on a comparable
     basis.

2.   SIGNIFICANT ACCOUNTING POLICIES

     a)   Principles of Consolidation

          The consolidated financial statements include the financial statements
          of the Company and all of its subsidiary  companies since the dates of
          their  acquisition.  Its wholly owned  subsidiaries,  all of which are
          consolidated using the purchase method, are as follows:

             Brocker Technology Group (NZ) Limited
                (formerly Brocker Investments (NZ) Limited)
             Brocker Investments (Australia)  Pty  Limited
             Sealcorp Computer Products Limited
             Sealcorp Telecommunications Group Limited
             Sealcorp Australia Pty Limited
             Easy PC Computer Rentals Limited
             Image Craft Limited
             Image Craft Australia Pty Limited (formerly Parilott Pty Limited)
             Industrial Communications Service Limited
             Photo Magic Limited
             Powercall Technologies Limited
             Pritech Corporation Limited
             Pritech Australia Pty Limited
             Northmark Technologies Limited
             1 World Systems Limited (formerly Microchannel Limited)

          During  1998  Brocker   Technology  Group  Ltd  took  a  20%  founding
          shareholding in Highway Technologies Limited. This investment has been
          recorded using the equity method.

     b)   Goodwill

          The excess of cost over the fair value of  identifiable  net assets of
          subsidiaries  acquired is recorded as goodwill  and is  amortised on a
          straight-line  basis over its estimated useful life,  considered to be
          five  to ten  YEARS.  On an  ongoing  basis,  management  reviews  the
          valuation and amortisation of goodwill taking into  consideration  any
          events and circumstances which might have impaired the fair value.

          Where an acquisition  price is contingent on a future event or events,
          no additional goodwill is recognised until the final acquisition price
          can be reasonably determined.

                                                                          Page 9

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     c)   Foreign Currency

          Foreign  currency  transactions  are recorded at the exchange rates in
          effect at the date of  settlement.  Monetary  assets  and  liabilities
          arising from trading are translated at closing rates. Gains and losses
          due to  currency  fluctuations  on these  items  are  included  in the
          statement of earnings.

          The  financial  statements  of foreign  operations  are  translated to
          Canadian  dollars using weighted  average  exchange rates for the year
          for items  included in the  statement of earnings,  year end rates for
          assets and  liabilities  included in the balance sheet and  historical
          rates for equity transactions.  The cumulative  translation adjustment
          represents  the  deferred   foreign  exchange  gain  or  loss  on  the
          translation of the financial statements.

          The  following  rates were used in the  preparation  of the  financial
          statements:

          ----------------------------------------------------------------------
                New Zealand dollar        Average rate        Rate at March 31
          ----------------------------------------------------------------------
                      1999                   0.7862                0.7976
          ----------------------------------------------------------------------
                      1998                   0.8833                0.7816
          ----------------------------------------------------------------------

          ----------------------------------------------------------------------
                 Australian dollar        Average rate        Rate at March 31
          ----------------------------------------------------------------------
                      1999                   0.9318                0.9455
          ----------------------------------------------------------------------
                      1998                   1.0055                0.9408
          ----------------------------------------------------------------------

     d)   Inventories

          Inventories principally comprise finished goods and are carried at the
          lower  of cost  and net  realisable  value.  Cost is  determined  on a
          weighted average or first in first out basis.

     e)   Capital Assets

          Capital assets are recorded at cost.  Depreciation  is calculated on a
          declining  balance basis (except for  leasehold  improvements  where a
          straight line basis is used) using the following rates:

                 Land                                                    0%
                 Buildings                                               2%
                 Office equipment                                       20%
                 Vehicles                                        20 and 26%
                 Furniture and fixtures                                 20%
                 Computer hardware                                20 to 30%
                 Computer software                                30 to 40%
                 Plant and Equipment                              20 to 26%
                 Leasehold improvements                        1 to 4 YEARS
                 Computer hardware held for rental             2 to 3 YEARS

     f)   Revenue recognition

          The Company earns  substantially  all of its revenue from the sale and
          delivery of products to its  customers.  Revenue is recorded  when the
          products are shipped to customers.

                                                                         Page 10

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

2.   SIGNIFICANT ACCOUNTING POLICIES (Continued)

     g)   Research and development expenditures

          Research  costs,  other than  capital  expenditures,  are  expensed as
          incurred.  Development costs are expensed as incurred unless they meet
          the  criteria  under  generally  accepted  accounting  principles  for
          deferral and  amortisation.  Deferred  development costs are amortised
          over the expected life of the developed  product,  currently a maximum
          of three YEARS.

     h)   Deferred Income Taxes

          The Company  follows the deferral method of income tax allocation such
          that  deferred  income  taxes are  recognised  when income and expense
          items are  reported for income tax  purposes in YEARS  different  from
          those in which they are recorded for financial reporting purposes.

     i)   Earnings Per Share

          Earnings per share have been calculated  based on the weighted average
          number of common shares  outstanding.  The fully diluted  earnings per
          share have been  calculated  based on the  assumption  that all vested
          options would have been exercised.

          In both  cases,  common  shares to be issued,  or held in  escrow,  in
          respect of the  settlement  of earn-out  consideration  in relation to
          acquisitions  are  only  taken  into  account  in the  calculation  of
          earnings  per  share  once the  number  of  shares  can be  reasonably
          determined.

     j)   Use of estimates

          The  preparation of financial  statements in accordance with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions  that  affect the amounts  reported in the  financial
          statements and  accompanying  notes.  Actual results could differ from
          those estimates.

                                                                         Page 11

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

3.   ACQUISITIONS

          1999 Acquisitions

          Pritech Corporation Limited

     On May 15, 1998  Brocker  Technology  Group (NZ) Limited  acquired  Pritech
     Corporation  Limited  for an  initial  cash  consideration  of  NZ$265,620.
     Pritech   Corporation   Limited  is  principally   involved  with  software
     consultation and knowledge  management.  Pritech is a Lotus Premium Partner
     whose target market is enterprise and  government  customers in New Zealand
     and Australia.

     The maximum  purchase  price  payable is based on the profit  earned by the
     company for the year ended  September  30,  1998 at a four times  multiple.
     Additional consideration, however, is only payable based on the cash earned
     by the company for the YEARS ended  September  30, 1999 to 2000,  being the
     earn out period.  That is the maximum price must be subsequently  earned by
     the company, during the earn out period, before it is payable.

     Any  additional  consideration  will be  satisfied  by the  issue of common
     shares which will be held in escrow until the earn out criteria are met.

     This  acquisition was accounted for using the purchase  method.  Net assets
     acquired and consideration paid were as follows:

                                                                  1999
                                                                     $
              Net current assets                               472,515
              Capital assets                                    51,987
              Net current liabilities                         (316,893)
              Goodwill attributed                                   --
                                                              --------
              Consideration paid                               207,609

          Additional  future  consideration  will be added to  goodwill  when it
          becomes determinable.

          1 World Systems Limited (formerly Microchannel Limited)

     On June 16, 1998 Brocker  Technology  Group (NZ)  Limited  acquired 1 World
     Systems Limited for an initial consideration of NZ$103,750. 1 World Systems
     Limited is principally  involved with the distribution,  implementation and
     support of accounting software.

     The maximum  purchase  price  payable is based on the profit  earned by the
     company  for the  year  ended  March  31,  1999 at a four  times  multiple.
     Additional consideration, however, is only payable based on the cash earned
     by the company  for the YEARS ended March 31, 2000 to 2001,  being the earn
     out period.  That is the maximum price must be  subsequently  earned by the
     company, during the earn out period, before it is payable.

     Any  additional  consideration  will be  satisfied  by the  issue of common
     shares which will be held in escrow until the earn out criteria are met.

     This  acquisition was accounted for using the purchase  method.  Net assets
     acquired and consideration paid were as follows:

                                                                  1999
                                                                     $
              Net current assets                               281,790
              Capital assets                                    43,341
              Net current liabilities                         (182,365)
              Term liabilities                                 (61,675)
              Goodwill attributed                                   --
                                                              --------
              Consideration paid                                81,091

     Additional future  consideration  will be added to goodwill when it becomes
     determinable.

                                                                         Page 12

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

3.   ACQUISITIONS (Continued)

     QSoft Pty Limited

     On February 8, 1999 Sealcorp Australia acquired the net assets of QSoft Pty
     Limited  for a cash  consideration  of  AUD$150,000.  QSoft  is a  Software
     Distribution company based in Brisbane Australia.

     The net assets acquired were valued at their fair value, and as a result no
     goodwill arose on acquisition.

     Motorola Service Contract

     During March 1999 Industrial  Communications  Service Limited  acquired the
     net assets of a division of Hart Candy in order to fulfil the  requirements
     of the Motorola Service contract awarded to the company.

     This  acquisition was accounted for using the purchase  method.  Net assets
     acquired and consideration paid were as follows:

                                                                  1999
                                                                     $
         Net current assets                                      8,774
         Capital assets                                         55,677
         Net current liabilities                               (16,595)
         Goodwill attributed                                    47,856
                                                              --------
         Consideration paid                                     95,712

     1998 Acquisitions

     Powercall Technologies Limited

     On May 10, 1997  Brocker  Technology  Group (NZ)  Limited  acquired the net
     assets of Powercall  Limited and Powercall  Services Limited for an initial
     cash  consideration  of  NZ$4,948  and  27,440  common  shares.   Powercall
     Technologies   Limited  is   principally   involved  with  the  design  and
     development of telecommunication systems.

     Total  purchase  price of the entity is based on the lesser of a four times
     multiple of the  cumulative  cash earned by the company for the YEARS ended
     March 31,  1998 to 2001 or a twelve  times  multiple  of the profit for the
     year ended March 31, 2001.  The  purchase  price is limited to a maximum of
     NZ$20m.  An additional one year is then allowed for this price to be earned
     out by the company.  That is the maximum price must be subsequently  earned
     by the company, during the earn out period, before it is payable.

     Any  additional  consideration  will be  satisfied  by the  issue of common
     shares which will be held in escrow until the earn out criteria are met.

     This  acquisition was accounted for using the purchase  method.  Net assets
     acquired and consideration paid were as follows:

                                                                  1998
                                                                     $
              Capital assets                                   180,582
              Net current liabilities                         (124,556)
              Goodwill attributed                                7,535
                                                            ----------
              Consideration paid                                63,561

     On November 30, 1998 an additional 98,416 shares were issued in relation to
     the acquisition of Powercall, with an attributable value of $172,228.

     Additional future  consideration  will be added to goodwill when it becomes
     determinable.

                                                                         Page 13

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

3.   ACQUISITIONS (Continued)

     Easy PC Computer Rentals Limited

On July 10, 1997 Brocker Technology Group (NZ) Limited acquired Easy PC Computer
Rentals Limited for an initial cash  consideration of NZ$71,183 and 8,128 common
shares.  In  addition  an  advance on the final  price was paid to the  previous
shareholders of NZ$150,000. This amount is repayable to the Company based on the
earn out details below,  and is included  within prepaid  expenses and deposits.
Easy  PC  Computer  Rentals  Limited  is  involved  in the  rental  of  computer
equipment.

The maximum  purchase price payable is based on the profit earned by the company
for  the  year  ended  March  31,  1998  at a four  times  multiple.  Additional
consideration,  however, is only payable based on the cash earned by the company
for the years ended March 31, 1999 to 2000,  being the earn out period.  That is
the maximum price must be  subsequently  earned by the company,  during the earn
out period, before it is payable.

Any  additional  consideration  will be satisfied by the issue of common  shares
which will be held in escrow until the earn out criteria are met.

     This  acquisition was accounted for using the purchase  method.  Net assets
     acquired and consideration paid were as follows:

                                                                   1998
                                                                      $
          Capital assets                                        248,576
          Rental assets, externally financed (Note 7)         1,452,174
          Rental finance liability (Note 7)                  (1,452,174)
          Net current liabilities                              (253,602)
          Goodwill attributed                                    73,846
                                                           ------------
          Consideration paid                                     68,820

     On December 31, 1998 an additional 94,782 shares were issued in relation to
     the acquisition of Easy-PC Computer  Rentals Limited,  with an attributable
     value of $165,869.

     Additional future  consideration  will be added to goodwill when it becomes
     determinable.

     Image Craft Limited

On December 24, 1997 Brocker  Technology Group (NZ) Limited acquired Image Craft
Limited and its  subsidiary  company  Parrilott  Pty Limited for an initial cash
consideration of NZ$500,000.

Image Craft Limited and Parrilott  Pty Limited are  principally  involved in the
design and  implementation  of image  processing  and storage  equipment for the
photographic industry.

This  acquisition  was  accounted  for using the  purchase  method.  Net  assets
acquired and consideration paid were as follows:

                                                                  1998
                                                                     $
          Net current assets                                    65,648
          Capital assets                                       278,372
          Goodwill attributed                                   46,780
                                                              --------
          Consideration paid                                   390,800
     The maximum  purchase price payable was to be based on the profit earned by
     the company  for the year ended  March 31,  1998 at a four times  multiple.
     However, during the current year an additional  consideration of NZ$159,036
     was accrued in relation to the final settlement.

                                                                         Page 14

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

4.   CAPITAL ASSETS

                                                        1999
                                      ------------------------------------------
                                                     Accumulated        Net Book
                                            Cost    Depreciation           Value

Land (Note 8a)                           622,128              --         622,128

Buildings (Note 8a)                    2,684,411          37,860       2,646,551

Office equipment
- leased                                  72,260          31,036          41,224
- non-leased                             368,147         184,704         183,443

Vehicles
- leased                                 105,285          69,380          35,905
- non-leased                             107,222          45,302          61,920

Furniture and fixtures
- leased                                  37,456           8,317          29,139
- non-leased                             464,038         172,221         291,817

Computer hardware
- non-leased                           1,750,998         901,607         849,391
- held for rental                        830,688         369,218         461,470

Computer software                        156,292          88,467          67,825

Plant and Equipment                      316,838         161,297         155,541

Leasehold improvements                   147,402          42,688         104,714
                                      ------------------------------------------
                                      $7,663,165      $2,112,097      $5,551,068
                                      ==========================================

                                                                         Page 15

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

4.   CAPITAL ASSETS (Continued)

                                                        1998
                                      ------------------------------------------
                                                     Accumulated        Net Book
                                            Cost    Depreciation           Value

Office equipment
- leased                                  29,598          14,039          15,559
- non-leased                             218,228          82,476         135,752

Vehicles
- leased                                  69,718          24,871          44,847
- non-leased                             138,823          74,633          64,190

Furniture and fixtures
- leased                                  35,598           4,041          31,557
- non-leased                             349,516         118,955         230,561

Computer hardware
- leased                                  15,659           2,349          13,310
- non-leased                           1,243,415         562,767         680,648
- held for rental                        360,951          75,233         285,718

Computer software                        119,265          52,745          66,520

Plant and Equipment                      247,240         150,947          96,293

Leasehold improvements                   126,156          26,851          99,305
                                      ------------------------------------------
                                       2,954,167       1,189,907       1,764,260
Computer hardware held for rental,
externally financed (Note 7)           2,786,167         870,855       1,915,312
                                      ------------------------------------------
                                      $5,740,334      $2,060,762      $3,679,572
                                      ==========================================

5.   DEFERRED DEVELOPMENT COSTS

                                                          1999             1998
                                                             $                $

     Development costs deferred as at March 31,        521,428               --

     Development costs deferred during the year        883,295          521,428
                                                    ----------       ----------
                                                     1,404,723          521,428

     Amortised as at March 31,                        (152,355)         (30,915)
                                                    ----------      -----------

     Development costs deferred as at March, 31      1,252,368          490,513
                                                    ==========       ==========

     Development  costs  deferred  principally  relate  to  the  development  of
     software applications.

     Management  has  reviewed  the  status of the  projects  to which  deferred
     development  costs relate and are satisfied that the recovery of such costs
     is  reasonably  assured.  However the  eventual  recovery of these costs is
     ultimately  dependent on actual sales volumes being  achieved in subsequent
     periods and as such recovery is not certain.

                                                                         Page 16

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

6.   INVESTMENTS

     INVESTMENT IN ASSOCIATED COMPANY

     During 1998  Brocker  Technology  Group (NZ)  Limited  took a 20%  founding
     shareholding in Highway  Technologies  Limited.  This company has developed
     new  technology  capable of  providing  transport  and highway  management,
     operation and funding solutions.  The Board of Highway Technologies Limited
     has identified other sources of revenue in order to reduce the amount owing
     to Brocker Technology Group Limited. These sources include the provision of
     financial  and  technical  consulting  services to parties  external to the
     Group.

     In addition to the investment,  Brocker  Technology  Group (NZ) Limited has
     entered an agreement to loan Highway  Technologies Limited funds during the
     company's  establishment  phase up to a maximum  of  NZ$1.5m.  Interest  is
     payable  on these  funds at 30% per  annum.  As at March 31,  1999  amounts
     advanced  to  Highway   Technologies   Limited   amounted   to   NZ$820,220
     (NZ$327,151,  1998).  No  interest  has  been  accrued  on the loan for the
     current year (NZ$60,735, 1998).

                                                           1999           1998
     Carrying value of investment                           $              $

     Initial cost of investment                          87,366         87,366
     Amounts owing from associate                       689,523        255,700
     Equity accounted losses to date                   (172,456)       (79,953)
                                                      ---------      ---------

                                                        604,433        263,113
                                                      =========        =======

     The financial position of Highway
     Technologies Limited as at
     March 31, 1999 is represented
     as follows:

     Net Current Assets*                                  3,718
     Net Current Liabilities (including amounts
     owing to Brocker Technology Group Limited
     of ($789,045, inclusive of accrued interest)      (803,523)
                                                       --------

     Net Liabilities                                   (799,805)
                                                       ========

     * All research and development expenditure has been expensed.

     Management has assessed the  recoverability  of the funding loan to Highway
     Technologies  Limited,  which is ultimately dependent on the future revenue
     stream of the software  technology under development and the revenue stream
     from  consultancy  services,  and are satisfied on the basis of the current
     status of the projects  concerned that no impairment  provision is required
     as at March 31, 1999.  Management  will  continue to assess the need for an
     impairment provision in light of the actual revenues generated.

     OTHER INVESTMENTS

     During 1999  Industrial  Communications  Service  Limited,  a subsidiary of
     Brocker  Technology  Group (NZ) Limited,  took a 40% shareholding in Eftpos
     Corporation  Limited for a consideration  of NZ$5,000.  Eftpos  Corporation
     Limited is a manufacturer of mobile  electronic  payment devices  utilising
     cellular technology.

     Industrial  Communications  Service Limited has an obligation to acquire an
     additional 20%  shareholding  for a consideration of NZ$85,000 in the event
     profit targets, for the year ended 31 October 1999, are achieved.

     The  results  of this  company  for the year ended  March 31,  1999 are not
     material to the Group.

                                                                         Page 17

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

7.   RENTAL FINANCE LIABILITY

     Easy PC Computer Rentals Limited,  a subsidiary of Brocker Technology Group
     (NZ)  Limited,  acts as an  intermediary  between  an  independent  finance
     company,  which  arranges  finance for the purchase of  equipment,  and its
     customers.

     During March 1999 Easy PC Computer Rentals Limited  renegotiated its Rental
     Recourse Dealer Deed, with the independent  finance company, to ensure that
     all significant risk of recourse from the individual finance agreements was
     transferred  to  the  independent  finance  company.  The  result  of  this
     renegotiation  was to enable the  company,  in  accordance  with  generally
     accepted  accounting  principles,  to  treat  these  as  off-balance  sheet
     arrangements.

     Due to the renegotiation the Group risk of recourse is limited to $167,245.

     Included   within  the   financial   statements   is  revenue  of  $910,550
     ($1,075,944,  1998) in relation to income earned on these leases during the
     year up to the date of the renegotiation with a corresponding  depreciation
     expense of  $736,995  ($870,855,  1998) and  interest  charges of  $173,555
     ($205,089, 1998).

                                                                         Page 18

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

8.   INDEBTEDNESS

<TABLE>
<CAPTION>
                                                                                  1999             1998
a)   Long Term Debt                                                                  $                $

<S>                                                                        <C>               <C>
     Mortgage finance liability,  payable in New Zealand                     2,357,142               --
     Dollars, with a current interest rate of 6.73%, collateralised
     by land and buildings situated at 17 Kahika Road,
     Beachaven, Auckland, payable over  10 Years

     Less:  Current portion                                                   (183,352)              --
                                                                           -----------       ----------

                                                                             2,173,790               --

     Rental finance liability, payable in New Zealand
     dollars, with an interest rate of 16.1% per
     annum (Note 7)                                                                 --        1,915,312

     Less:  Current portion                                                         --       (1,094,464)
                                                                           -----------       ----------
     Rental finance liability payable over 1 year                                   --          820,848

     Capital lease obligations payable in New
     Zealand dollars, with interest rates ranging from
     6.6% to 14.5% per annum, collateralised by related
     assets, payable over 1 to 3 years                                          91,632           49,813

     Less:  Current portion                                                    (36,676)         (44,303)
                                                                           -----------       ----------

     Capital lease obligations payable over 1 year                              54,956            5,510

     Unsecured Term Liability, repayable in NZ$                                 55,832           54,712
                                                                           -----------       ----------

                                                                           $ 2,284,578       $  881,070
                                                                           ===========       ==========
</TABLE>

     The total interest  expense for the year in relation to long term debt, was
     $258,957 ($207,048, 1998).

     Capital lease obligations are repayable as follows:

                2000                        36,676
                2001                        36,821
                2002                        18,135
                                            ------
                                            91,632
                                            ======

b)   Mortgage Finance Liability                    $2,357,142         $       --
                                                   ==========         ==========

     On October 1, 1998  Brocker  Technology  Group (NZ) Limited  purchased  new
     premises in Auckland,  New Zealand.  The purchase price of NZ$3,400,000 was
     financed  by  mortgage  finance of  NZ$3,045,000.  As at March 31, 1999 the
     amount  remaining  outstanding  was  $NZ  2,955,293,  and is  repayable  as
     follows:

                                                                         Page 19

<PAGE>

                                                                    NZ$

                  In less than 1 year                           229,880
                  1 to 2 years                                  245,837
                  2 to 3 years                                  262,902
                  3 to 4 years                                  281,152
                  4 to 5 year                                   300,668
                  5 years and over                            1,634,854
                                                              ---------
                                                              2,955,293
                                                              =========

                                                                         Page 20

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

8.   INDEBTEDNESS (Continued)

     c)   Financing Facility                         $3,213,122       $5,827,883
                                                     ==========       ==========

          Sealcorp Computer Products Limited, Sealcorp  Telecommunications Group
          Limited and Sealcorp  Australia Pty Limited (all  subsidiaries  of the
          Company) have entered into a financing facility agreement secured by a
          registered  first  debenture over the assets and  undertakings  of all
          Group companies.  As at March 31, 1999 $3,213,122  ($5,827,883,  1998)
          was  outstanding   under  this  AUD$  16.0m  facility   (approximately
          C$15.0m).  Interest  rates on  financing  facilities  have ranged from
          9.95% to 13.43% during the year.

     As  discussed  in Note 18,  subsequent  to year end a new facility has been
     negotiated.

9.   SHARE CAPITAL

     a)  Authorised

              Unlimited number of common shares
              Unlimited number of Preferred Shares
              10,000,000 Series A Preferred Shares
                 6 1/2% cumulative

         Issued and outstanding                        1999                1998
                                                        $                   $

               Common shares                      3,353,490           2,959,499
               Series A Preferred                 2,450,000           2,450,000

               Less:  Share issue costs             (41,769)            (41,769)
                                                -----------         -----------
                                                $ 5,761,721         $ 5,367,730
                                                ===========         ===========

     As at March 31, 1999 963,602  shares were being held in escrow  pursuant to
     Escrow  Agreements  which  provide  for the  release  of such  shares  on a
     performance basis. In the prior year 760,500 shares were held in escrow.

                                                                         Page 21

<PAGE>

BROCKER  TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

9.   SHARE CAPITAL (Continued)

     b)   Share Transactions

<TABLE>
<CAPTION>
                                                                    1999                            1998

          Common Shares                                      Shares          Amount          Shares         Amount
          <S>                                            <C>           <C>               <C>           <C>
          Shares outstanding  - at March 31,             11,704,554       4,214,324      10,315,486      2,262,460

          Issue of shares for acquisition of
          Industrial Communications (Note (i))                   --              --         760,500      1,254,825

          Issue of shares for acquisition of
          Powercall Technologies Limited (Note (ii))        284,733         498,283          27,440         54,880

          Issue of shares for acquisition of Easy PC
          Computer Rentals Limited (Note (iii))             111,567         195,258           8,128         16,259

          Exercise of share warrants                         25,000          29,500         450,000        495,000

          Exercise of stock options                              --              --         143,000        130,900
                                                         ---------------------------------------------------------

          Shares issued - at March 31, 1998
                                                         12,125,854       4,937,365      11,704,545      4,214,324

          Acquisition shares held in escrow (Note(i)
          and (iii))                                       (963,602)     (1,583,875)       (760,500)    (1,254,825)
                                                         ---------------------------------------------------------

          Shares outstanding - at March 31,              11,162,252      $3,353,490      10,944,045    $ 2,959,499
                                                         =========================================================
</TABLE>

          (i)     During  1998  share  script  was  issued  in  respect  of  the
                  acquisition  of  Industrial  Communications  Service  Limited.
                  These shares  (760,500) are  currently  held in escrow and are
                  only released as earn-out provisions are achieved.  These will
                  be issued  at $1.65  per  share  but as at March  31,  1999 no
                  earn-out  amounts  have  been   determined,   resulting  in  a
                  prescribed value of nil.

          (ii)    During the year shares were issued,  at $1.75,  in relation to
                  the acquisition of Powercall  Technologies  Limited in respect
                  to earn-out targets that were achieved. (Note 3).

                  As at March 31, 1999  186,317 of these  shares were being held
                  in escrow.

          (iii)   Also during the year additional  shares were issued,  at $1.75
                  in relation  to the  acquisition  of Easy PC Computer  Rentals
                  Limited in respect to  earn-out  targets  that were  achieved.
                  (Note 3)

                  As at March 31, 1999 16,785 of these shares were being held in
                  escrow.

                                                                         Page 22

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

9.   SHARE CAPITAL (Continued)

<TABLE>
<CAPTION>
                                                               1999                            1998

     Preferred Shares                                    Shares         Amount          Shares         Amount
     <S>                                            <C>           <C>               <C>            <C>
     Series A shares outstanding at March 31,         2,450,000      2,450,000       3,043,049       3,043,049

     Redeemed at $1.00                                       --             --        (593,049)       (593,049)
                                                    ----------------------------------------------------------

     Series A shares outstanding at March 31,         2,450,000    $ 2,450,000       2,450,000     $ 2,450,000
                                                    ==========================================================
</TABLE>

          In 1995 the Company  acquired  Brocker  Investment  (NZ) Limited and a
          liability   was   established   in  the   accounts  for  the  purchase
          consideration.  In 1996 the liability was satisfied by the issuance of
          Series A preferred shares.

          No transactions, involving Preferred Shares, were conducted during the
          year. During 1998 593,049 shares were redeemed at $1.00 per share.

          During  the  year a  dividend  was  paid at 6.5% of  preferred  shares
          outstanding at September 30, 1998.

          Any holder of preferred  shares may convert their shares to fully paid
          common shares at the following  conversion prices, which are dependent
          upon when the date of notice to convert is received by the Company:

          ----------------------------------------------------------------------
          Date notice received                      Conversion rate
          ----------------------------------------------------------------------
          After March 31, 1998 and on          Market value of common shares at
          or before March 31, 2000             April 1, 1998 ($1.75)
          ----------------------------------------------------------------------
          After March 31, 2000 and             Market value of common shares at
          on or before March 31, 2001          April 1, 2000
          ----------------------------------------------------------------------

                                                                         Page 23

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

9.9  SHARE CAPITAL (Continued)

     c)   Unexercised Options

          There are a total of 889,000 outstanding and unexercised stock options
          (934,000, 1998).

          Options held by the  Directors of the Company  (287,000,  1998) are as
          follows:

          ----------------------------------------------------------------
          Number of options         Exercise price           Expiry date
          ----------------------------------------------------------------
               57,000                  $1.31             November 1, 2001
          ----------------------------------------------------------------
              100,000                  $1.50             November 30, 2003
          ----------------------------------------------------------------
              150,000                  $1.18             November 1, 2001
          ----------------------------------------------------------------
               30,000                  $1.90             November 1, 2002
          ----------------------------------------------------------------
               50,000                  $1.99             January 26, 2003
          ----------------------------------------------------------------

          Options  are held by  employees  of the Group as  follows  (647,000  -
          1998):

          ----------------------------------------------------------------------
                Number of options         Exercise price           Expiry date
          ----------------------------------------------------------------------
                     12,000                  $0.30             December 31, 1999
          ----------------------------------------------------------------------
                    135,000                  $1.18             November 1, 2001
          ----------------------------------------------------------------------
                     20,000                  $1.52             April 17, 2000
          ----------------------------------------------------------------------
                    335,000                  $1.90             November 1, 2002
          ----------------------------------------------------------------------

     d)   Earnings Per Common Share

          Earnings  per share has been  calculated  on the basis of the weighted
          average number of common shares  outstanding  for the year. Net income
          has been adjusted for dividends  paid on preferred  shares of $163,322
          ($195,000, 1998).

                                                        1999            1998
--------------------------------------------------------------------------------
Weighted average number of shares                   11,012,887       10,516,318

Net income attributable to shareholders after
deduction of preference dividends                     351,492          $601,816

Basic earnings per share                                $0.03             $0.06
--------------------------------------------------------------------------------

          For the current,  and previous,  financial year the effect on earnings
          per share of the exercise of  outstanding  options and  conversion  of
          preferred  shares,  for the calculation of fully diluted  earnings per
          share, is anti-dilutive.

                                                                         Page 24

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

10.  INCOME TAX

                                                          1999           1998
                                                           $              $
          Expected income tax expense
           calculated at the Statutory Rate
           on Earnings before Taxation                 346,635        583,691

          Adjusted for the tax effect of:

          Amortisation of goodwill                     114,487         95,497
          Canadian parent Company losses not
           available for offset with foreign income         --         14,784
          Adjustment for foreign tax rates            (109,765)      (203,896)
          Other                                        (78,366)        15,991
                                                      --------       --------

          Income tax expense                           272,991        506,067
                                                                     ========

          Total income tax expense is made up of:

          Current taxation                             180,380        648,116
          Deferred taxation                             92,611       (142,049)
                                                      --------       --------

                                                       272,991        506,067
                                                                     ========

11.  RELATED PARTY TRANSACTIONS

     a)   During  the year,  the Group  provided  an  interest  free  short-term
          advance to the Chief  Executive  Officer of the  Company.  The balance
          outstanding at March 31, 1999 was $4,663 ($5,778,  1998). This balance
          is included in other receivables.

          The Chief Executive  Officer has also borrowed $26,371 from the Group.
          Interest is  currently  charged on this amount at 6.5% and the loan is
          unsecured and is repayable on demand.  The maximum amount  outstanding
          during  the year in  respect of this loan was  $94,817,  and  interest
          charged amounted to $7,725.

     b)   The Chief Executive Officer of the Company, as at March 31, 1999, held
          923,453  (1,148,453,  1998)  preferred  shares on which a dividend  of
          $60,783 was paid during the year.

     c)   Directors  of the Company  have  exercised  stock  options.  The funds
          required to exercise  these  options have been loaned to the Directors
          by Brocker Technology Group (NZ) Limited.

          As at March 31, 1999 the amount  outstanding  was $749,375  ($715,801,
          1998).  The current market value of the shares,  held as security over
          these  loans is in excess of $1.6m.  Interest  of $16,692  was charged
          during the year.  This balance is included in other  receivables.  The
          maximum amount  outstanding  during the year in respect of these loans
          was $749,375.

          The loan to each  Director is repayable on demand or within 30 days of
          the  individual  ceasing to be a Director of the Company or one of its
          subsidiaries.  The  beneficial  ownership  of the  shares  are held as
          security  over the loan,  and the Company  retains the right to either
          sell or cancel the shares to settle any  outstanding  amounts  and the
          employee may not sell or transfer the shares  prior to  settlement  of
          the amounts outstanding.

                                                                         Page 25

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

11.9 RELATED PARTY TRANSACTIONS

     a)   Directors, of various subsidiary companies, have advances owing to the
          Group  as  at  March  31,  1999  totalling  $193,124,   including  the
          NZ$150,000 advance referred to in Note 3. In all cases these Directors
          were  shareholders  of the subsidiary  prior to acquisition by Brocker
          Technology  Group (NZ) Limited.  No interest is charged on the amounts
          outstanding and the balance is included in other receivables.

     b)   A number of Group  companies  transact  business  with each other on a
          regular  basis.   These   transactions  are  entered  into  on  normal
          commercial terms and are eliminated on consolidation.  See Note 13 for
          Intersegment revenues.

     Unless otherwise stated the maximum amount  outstanding during the year was
     the higher of the balance at March 31, 1999 or March 31, 1998.

12.  EMPLOYEE SHARE OWNERSHIP PLAN

     In  November  1996 the  Company  established  a plan to  enable a number of
     senior  management  employees  to acquire  stock  options  in the  Company.
     Brocker Technology Group (NZ) Limited has provided financial  assistance to
     some of these employees to exercise the options offered.

     The loan to each  employee is  repayable on demand or within 30 days of the
     individual  ceasing  to be an  employee  of  the  Company  or  one  of  its
     subsidiaries.  The beneficial  ownership of the shares are held as security
     over the loan,  and the Company  retains the right to either sell or cancel
     the shares to settle any outstanding  amounts and the employee may not sell
     or transfer the shares prior to settlement of the amounts outstanding.

     As at March 31, 1999 the  amounts  outstanding  in respect of these  shares
     amounted  to  $84,297  ($130,855,   1998)  and  is  included  within  other
     receivables.  Interest of $13,729  was  charged on these  loans  during the
     year.  The current market value of the shares held as security is in excess
     of $600,000.

     The maximum amount outstanding during the year was $130,855.

                                                                         Page 26

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

13.  SEGMENTED OPERATIONS

     The Group operates in two geographical segments, New Zealand and Australia.
     The Canadian operations shown relate to administrative items only.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
1999    ($)                                   Canada          New Zealand            Australia                 Total
--------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                 <C>                  <C>                   <C>
Sales                                            --           109,887,630           23,415,010           133,302,640
--------------------------------------------------------------------------------------------------------------------
Intersegment revenue                             --                18,058              (18,058)                   --
--------------------------------------------------------------------------------------------------------------------
Net profit/(loss)                                --               204,103              310,711               514,814
--------------------------------------------------------------------------------------------------------------------
Depreciation and amortisation                    --             1,894,449              116,254             2,010,703
--------------------------------------------------------------------------------------------------------------------
Net interest expense                             --             1,270,935              138,252             1,409,187
--------------------------------------------------------------------------------------------------------------------
Identifiable assets                              --            41,417,762            9,269,733            50,687,495
--------------------------------------------------------------------------------------------------------------------
Capital asset expenditure                        --             4,439,113              324,768             4,673,881
--------------------------------------------------------------------------------------------------------------------

<CAPTION>
1998    ($)                                  Canada           New Zealand            Australia                 Total
--------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                  <C>                  <C>                   <C>
Sales                                            --            57,281,846           13,529,374            70,811,220
--------------------------------------------------------------------------------------------------------------------
Intersegment revenue                             --                    --                   --                    --
--------------------------------------------------------------------------------------------------------------------
Net profit/(loss)                           (33,001)            1,208,407             (378,590)              796,816
--------------------------------------------------------------------------------------------------------------------
Depreciation and amortisation                    --             1,629,985               62,600             1,692,585
--------------------------------------------------------------------------------------------------------------------
Net interest expense                             --               584,070               84,775               668,845
--------------------------------------------------------------------------------------------------------------------
Identifiable assets                              --            29,923,977            2,575,194            32,499,171
--------------------------------------------------------------------------------------------------------------------
Capital asset expenditure                        --             1,007,960               37,159             1,045,119
--------------------------------------------------------------------------------------------------------------------
</TABLE>

     The  Group  principally  operates  in four  industry  segments,  being  the
     divisions by which the Group is managed, as follows:

          o    Distribution and sale of computer and telecommunications hardware
               and software ("Sales and Distribution");

          o    Technical  support  and  services  for  the  Technology  Industry
               ("Technical Services");

          o    Software   application   design  and  development   ("Application
               Development"); and

          o    Provision  of  professional  consulting  services  ("Professional
               Services").

     The   corporate   services   operation   shown   relates  to  the   Group's
     administrative functions in New Zealand, Australia, and Canada.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                     Sales &         Technical        Application   Professional      Corporate
1999  ($)                         Distribution       Services         Development     Services         Services         Total
----------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>              <C>                <C>          <C>              <C>              <C>
Sales                               124,995,192      2,661,745          2,124,378    3,519,855             1,470       133,302,640
----------------------------------------------------------------------------------------------------------------------------------
Intersegment revenue                    465,306        (38,691)           (62,525)    (364,090)               --                --
----------------------------------------------------------------------------------------------------------------------------------
Net profit/(loss)                     3,137,297         54,278           (407,056)     (65,010)       (2,204,695)          514,814
----------------------------------------------------------------------------------------------------------------------------------
Depreciation and amortisation         1,257,971         82,843            330,630       37,252           302,007         2,010,703
----------------------------------------------------------------------------------------------------------------------------------
Net interest expense                  1,206,905         33,225            126,465        8,651            33,941         1,409,187
----------------------------------------------------------------------------------------------------------------------------------
Identifiable assets                  49,731,409        532,667            189,390    1,100,084          (866,055)       50,687,495
----------------------------------------------------------------------------------------------------------------------------------
Capital asset expenditure               835,810        185,184            170,388      170,388         3,355,565         4,673,881
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                         Page 27

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

13.  SEGMENTED OPERATIONS (Continued)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                     Sales &         Technical        Application     Professional     Corporate
1998  ($)                         Distribution       Services         Development       Services        Services            Total
---------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>              <C>                <C>          <C>              <C>              <C>
Sales                               67,856,803        2,331,371           623,046               --            --       70,811,220
---------------------------------------------------------------------------------------------------------------------------------
Intersegment revenue                   178,283          (12,632)         (165,651)              --            --               --
---------------------------------------------------------------------------------------------------------------------------------
Net profit/(loss)                    2,555,089          (28,671)           96,344               --    (1,825,946)         796,816
---------------------------------------------------------------------------------------------------------------------------------
Depreciation and amortisation        1,470,999           90,513            87,274               --        43,799        1,692,585
---------------------------------------------------------------------------------------------------------------------------------
Net interest expense                   540,396           70,030             2,541               --        55,878          668,845
---------------------------------------------------------------------------------------------------------------------------------
Identifiable assets                 33,281,993          441,775           306,213               --    (1,530,810)      32,499,171
---------------------------------------------------------------------------------------------------------------------------------
Capital asset expenditure              598,923           66,128           250,293               --       129,775        1,045,119
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     During  1999 the  group  conducted  business  with a single  customer  that
     accounted  for revenue of  $23,792,150.  This revenue was  generated in New
     Zealand by the Distribution Services segment.  There were no such customers
     during the 1998 year.

14.  NOTES TO CASH FLOWS STATEMENT

     a)   Cash and cash equivalents

          Cash and cash  equivalents  consist of cash on hand and balances  with
          banks,  and  investments  in money market  instruments.  Cash and cash
          equivalents  included in the cash flow statement are comprised  solely
          of balances with banks.

     b)   Reconciliation of net profit and cash flow from operating activities

<TABLE>
<CAPTION>
                                                                              1999              1998
                                                                                 $                 $
<S>                                                         <C>         <C>               <C>
     Net Earnings for the year                              Note           514,814           796,816

     Add/(Less) non cash items:
     Depreciation and amortisation                                       1,273,748           821,730
     Depreciation on rental finance liability                  7           736,955           870,855
     Interest on rental finance liability                      7           173,555           205,089
     Income on rental finance liability                        7          (910,550)       (1,075,944)
     Loss of associated company                                             91,330            79,953
     Loss on sale of fixed assets                                           78,808            17,550
     Deferred taxation                                                      92,611           154,132
     Unrealised exchange (gain)/loss                                       (22,665)           46,558

     Impact of changes in working capital items:
     Increase in accounts receivable and prepayments                    (8,913,357)       (8,565,305)
     Increase in taxation receivable                                      (456,569)         (983,360)
     Increase in inventories                                            (5,448,644)       (4,577,815)
     Increase in accounts payable and accrued liabilities               15,771,607        13,678,760
                                                                       -----------       -----------
     Net cash flow from operating activities                             2,981,643         1,469,019
                                                                       ===========       ===========
</TABLE>

                                                                         Page 28

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

15.  FINANCIAL INSTRUMENTS

     Currency Risk

     The nature of activities and management  policies with respect to financial
     instruments are as follows:

     i)   Currency

          The Group uses a very limited number of forward exchange contracts and
          currency   options  to  hedge   purchases   of  inventory  in  foreign
          currencies.  The Group's  exchange  rate  commitments  are intended to
          minimise the exposure to exchange  rate  movement  risk on the cost of
          the  Group's  products  and on the  price  it is able  to  sell  those
          products to its  customers.  The Group does not use  foreign  exchange
          instruments for trading or any other purpose.

          No forward  exchange  contracts  were  entered into during the current
          financial year.  During the previous  financial year the average value
          of these contracts  amounted to $1,232,000 and were entered as a hedge
          against New Zealand purchases made in Australian dollars.

     ii)  Concentration of credit risk

          In the normal  course of business,  the Group incurs  credit risk from
          trade debtors and transactions with financial institutions.  The Group
          has a credit  policy which is used to manage the risk. As part of this
          policy,  limits on exposure with  counterparties have been set and are
          monitored on a regular  basis.  Anticipated  bad debt losses have been
          provided for in the allowance for doubtful accounts.

          The Group has no significant  concentrations of credit risk. The Group
          does not  consider  that they  require any  collateral  or security to
          support  financial   instruments  due  to  the  quality  of  financial
          institutions and trade debtors.

     iii) Interest Rate Risk

          The  Group  has  adopted a policy of  ensuring  that its  exposure  to
          changes in interest rates is on a floating rate basis.

     iv)  Fair Values

          The fair values of the Group's cash  accounts  and other  receivables,
          bank,  indebtedness,  accounts payable,  accrued liabilities and lease
          obligations  approximate  their carrying values given their short term
          nature. The carrying value of the demand debenture and capital leases,
          as  disclosed  in note 8,  also  approximate  their  fair  value as do
          amounts owing by shareholders.

16.  COMMITMENTS

     a)   Brocker  Technology  Group (NZ)  Limited has entered  into a number of
          acquisitions  where the final  acquisition  price is  dependent on the
          occurrence  of  future  events.  This  contingent  purchase  price  is
          calculated  based  on cash  flow  earned  for a given  period,  and is
          settled by way of shares issued but held in escrow.

          Shares are released  from escrow based on cash flows,  as defined with
          each party,  earned by the  subsidiary  over a varying number of years
          following acquisition, being the "earn-out" period.

                                                                         Page 29

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

16.  COMMITMENTS (Continued)

          As at March 31, 1999 the following earn-outs were in existence.

              Subsidiary                         Acquisition  price and earn-out
                                                 provisions
              -----------------------------------------------------------------
              Industrial Communications
              Service Limited                    Maximum     purchase     price
                                                 established  and shares issued
                                                 and held in escrow (refer Note
                                                 9)

                                                 Earn-out based on defined cash
                                                 flow earned in financial years
                                                 ended  March  31,  1998 - 1999
              -----------------------------------------------------------------
              Powercall Technologies Limited     Shares  to be held  in  escrow
                                                 based  on the  lessor  of four
                                                 times the cumulative cash flow
                                                 earned  for  the  years  ended
                                                 March  31,  1998  to  2001  or
                                                 twelve  times  profit  for the
                                                 year  ended  March  31,  2001,
                                                 limited  to  NZ$20m.  Earn-out
                                                 based  on  defined  cash  flow
                                                 earned  in   financial   years
                                                 ended  March  31,  1998 - 2002
                                                 (Note 3).
              -----------------------------------------------------------------
              Easy PC Computer Rentals Limited   Shares  to be held  in  escrow
                                                 based on cash flow  earned for
                                                 the year ended March 31, 1998.
                                                 Earn-out based on defined cash
                                                 flow earned in financial years
                                                 ended  March  31,  1999 - 2000
                                                 (Note 3).
              -----------------------------------------------------------------
              Pritech Corporation Limited        Shares  to be held  in  escrow
                                                 based on cash flow  earned for
                                                 the year ended  September  30,
                                                 1998.    Earn-out   based   on
                                                 defined  cash  flow  earned in
                                                 financial      years     ended
                                                 September   30,  1999  -  2000
                                                 (Note 3).

              -----------------------------------------------------------------
              1 World Systems Limited            Shares  to be held  in  escrow
                                                 based on cash flow  earned for
                                                 the year ended March 31, 1999.
                                                 Earn-out based on defined cash
                                                 flow earned in financial years
                                                 ended  March  31,  2001 - 2002
                                                 (Note 3).
              -----------------------------------------------------------------

     b)   Industrial Communications Service Limited has an obligation to acquire
          an additional 20%  shareholding  of Eftpos  Corporation  Limited for a
          consideration  of NZ$85,000 in the event that profit targets,  for the
          year ended 31 October 1999, are achieved.

                                                                         Page 30

<PAGE>

     c)   Group   companies   operate  from  leased   premises  and  have  other
          obligations  under operating  leases  requiring  annual  repayments as
          follows:

                       2000                     $467,652
                       2001                     $382,624
                       2002                     $309,829
                       2003                     $150,140
                       Thereafter                     --

                                                                         Page 31

<PAGE>

BROCKER TECHNOLOGY GROUP LTD

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

FOR THE YEARS ENDED MARCH 31, 1999 AND 1998

17.  CONTINGENT LIABILITIES

     In the general  course of business  disputes may arise with  customers  and
     other third parties.  The Directors  consider  adequate  provision has been
     made for all such instances.

18.  SUBSEQUENT EVENTS

     a)   Subsequent to the year end, the company has successfully  renegotiated
          its financing arrangements with the National Bank of New Zealand. This
          increased  NZ$20m  facility  provides  the  Group's  New  Zealand  and
          Australian  operations  greater  access  to funds at a lower net cost.
          This facility will be secured over the Group's assets.

     b)   Also  subsequent to year end the Group acquired Tech Support  Limited.
          No cash  consideration has been paid, to date, the maximum of which is
          limited to NZ$45,000.

     c)   Also  subsequent  to March  31,  1999 the  Company  completed  a fully
          subscribed  private  placement of 1,000,000 units to raise proceeds of
          $1,070,000.  Each  unit  is  comprised  of one  common  share  and one
          non-transferable  share purchase warrant entitling the purchase of one
          additional common share at a price of $1.25 until January 16, 2002.

19.  UNCERTAINTY DUE TO YEAR 2000 ISSUE

     The year 2000 Issue arises because many computerised systems use two digits
     rather that four to identify a year.  Date-sensitive  systems may recognise
     the year 2000 as 1900 or as some  other  date,  resulting  in  errors  when
     information  using  year 2000  dates is  processed.  In  addition,  similar
     problems  may  arise in some  systems  which use  certain  dates in 1999 to
     represent  something  other than a date. The effects of the Year 2000 Issue
     may be  experienced  before,  on or after  January  1,  2000,  and,  if not
     addressed,  the impact on operations and financial reporting may range from
     minor  errors  to  significant  system  failures  which  could  affect  the
     Company's ability to conduct normal business operations. It is not possible
     to be  certain  that all  aspects  of the Year  2000  Issue  affecting  the
     Company, including those related to the efforts of customers,  suppliers or
     other third parties, will be fully resolved.

                                                                         Page 32

<PAGE>

                                                                   Schedule 4(l)

                          BROCKER TECHNOLOGY GROUP LTD

                              FINANCIAL STATEMENTS

                  FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999

<PAGE>

BROCKER TECHNOLOGY GROUP LTD
CONSOLIDATED BALANCE SHEETS
AS AT SEPTEMBER 30, 1999 AND 1998

                                                          1999             1998
                                                             $                $
ASSETS
Current Assets
Cash                                                   194,753        1,283,039
Other receivables                                   21,401,823       16,861,428
Inventories                                          1,798,862        1,754,405
Prepaid expenses and deposits                        1,056,381          545,940
Income taxes recoverable                               643,366          265,469
Deferred tax asset                                     314,162          222,516
                                                   -----------      -----------
                                                    45,645,817       31,723,106

Deferred Development Costs                           1,144,474          632,251
Capital Assets                                       5,255,550        7,038,578
Investment in Associated Company                       678,128          447,556
Goodwill                                             1,635,115        1,230,486
                                                   -----------      -----------
                                                    54,359,084       41,071,977
                                                   ===========      ===========

LIABILITIES
Current Liabilities
Accounts payable                                    35,761,670       22,200,451
Accrued liabilities                                  1,939,153        1,264,920
Finance facility                                     7,028,684        7,294,423
Rental finance liability                                    --        1,075,428
Current portion of long-term debt                      198,353          363,913
                                                   -----------      -----------

Long-Term Debt                                       2,070,224        2,826,840
                                                   -----------      -----------
                                                    46,998,084       35,025,975

SHAREHOLDERS' EQUITY
Share Capital                                        6,906,721        5,367,730
Foreign Currency Translation Reserve                (1,104,541)      (1,177,105)
Retained Earnings                                    1,558,820        1,855,377
                                                   -----------      -----------
                                                     7,361,000        6,046,002
                                                   -----------      -----------
                                                    54,359,084       41,071,977
                                                   ===========      ===========

Signed on behalf of the Board

-------------------------               -------------------------
Director                                Director

<PAGE>

BROCKER TECHNOLOGY GROUP LTD
CONSOLIDATED STATEMENT OF EARNINGS
AS AT SEPTEMBER 30, 1999 AND 1998

                                                            1999            1998
                                                               $               $

Revenue                                               74,233,131      64,099,951
Cost of Goods Sold                                    64,667,335      55,915,355
                                                     -----------     -----------
Gross Margin                                           9,565,796       8,184,596

Operating Expenses
Depreciation and amortisation                            765,675         818,103
Net income expense                                       544,347         580,390
Salaries and commissions                               4,950,463       3,390,896
Other operating expenses                               3,384,553       2,532,250
                                                     -----------     -----------

Total operating expenses                               9,645,038       7,321,639
                                                     -----------     -----------

Operating Income                                         (79,242)        862,957

Equity accounted losses of associated company             45,720          59,680
                                                     -----------     -----------

Income before Income Tax Provision                      (124,962)        803,277

Income Tax Provision                                      22,950         303,140
                                                     -----------     -----------
Net Earnings for the period                             (147,912)        500,137
                                                     ===========     ===========

<PAGE>

BROCKER TECHNOLOGY GROUP LTD
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
AS AT SEPTEMBER 30, 1999 AND 1998

                                                            1999            1998
                                                               $               $

Retained Earnings, Beginning of the period             1,706,732       1,355,240

Net Earnings for the period                             (147,912)        500,137

Discount on redemption of preferred shares                    --              --

Preferred dividends paid                                      --              --
                                                      ----------      ----------
Retained Earnings, End of the period                   1,558,820       1,855,377
                                                      ==========      ==========

BROCKER TECHNOLOGY GROUP LTD
MOVEMENTS IN FOREIGN CURRENCY TRANSLATION RESERVE
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

                                                           1999            1998
                                                              $               $

Beginning of the period                                (799,084)       (881,364)

Difference arising on the translation of
  foreign operations                                   (305,457)       (295,741)
                                                     ----------      ----------
End of the period                                    (1,104,541)     (1,177,105)
                                                     ==========      ==========

<PAGE>

BROCKER TECHNOLOGY GROUP LTD
CONSOLIDATED CASH FLOW STATEMENTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

<TABLE>
<CAPTION>
                                                               1999           1998
                                                                  $              $
<S>                                                     <C>            <C>
Cash flows from operating activities
Receipts from customers                                  74,299,551     60,882,946
Payments to suppliers and employees                     (73,795,105)   (36,721,438)
Interest paid                                              (544,347)      (865,714)
Taxation paid                                              (155,278)      (191,346)
                                                        -----------    -----------
Cash flows from operating activities                       (195,179)     3,104,448

Cash flows from investing activities
Purchase of capital assets                                 (396,978)    (3,723,298)
Investment in associated company                           (147,098)      (251,701)
Acquisition of subsidiaries                                 (33,831)      (288,700)
                                                        -----------    -----------
Cash flows from investing activities                       (577,907)    (4,263,699)

Cash flows from financing activities
Proceeds from the issue of share capital                  1,145,000             --
Proceeds from mortgage finance raised                            --      2,230,356
Repayment of mortgage principle                            (124,267)            --
                                                        -----------    -----------
Cash flows from financing activities                      1,020,733      2,230,356
                                                        -----------    -----------
Net Increase in cash equivalents                            247,647      1,071,105

Cash at the beginning of the year                           (55,433)       205,365

Translation of cash equivalents to reporting currency         2,539          6,569
                                                        -----------    -----------
Cash at the End of the period                               194,753      1,283,039
                                                        ===========    ===========
</TABLE>

<PAGE>

BROCKER TECHNOLOGY GROUP LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

1    BASIS OF PRESENTATION

     Brocker Technology Group Ltd, the Company, was incorporated under the
     Business Corporation Act (Alberta) on November 25, 1993, and obtained its
     listing on the Alberta Stock Exchange on April 14, 1994.

     On February 28, 1998 the Company transferred its listing to the Toronto
     Stock Exchange.

     These financial statements have been prepared in accordance with the
     generally accepted accounting principles of Canada.

2    SIGNIFICANT ACCOUNTING POLICIES

a)   Principles of Consolidation

     The consolidated financial statements include the financial statements of
     the Company and all of its subsidiary companies since the dates of their
     acquisition. Its wholly owned subsidiaries, all of which are consolidated
     using the purchase method, are as follows:

     Brocker Investments (Australia) Pty Limited
     Brocker Technology Group (NZ) Limited
     Easy PC Computer Rentals Limited
     Image Craft Australia Pty Limited
     Image Craft Limited (formerly NZ Online Limited)
     Industrial Communications Service Limited
     Northmark Technologies Limited
     Photo Magic Limited
     Powercall Technologies Limited
     Pritech Australia Pty Limited
     Pritech Corporation Limited
     Sealcorp Australia Pty Limited (formerly TGE Pty Limited)
     Sealcorp Computer Products Limited
     Sealcorp Telecommunications Group Limited
     Tech Support Limited
     1 World Systems Limited (formerly Microchannel Limited)

     During the 1998 Brocker Technology Group (NZ) Ltd took a 20% founding
     shareholding in Highway Technologies Limited. This investment has been
     recorded using the equity method.

     During 1999 Industrial Communications Service Limited took a 40%
     shareholding in Eftpos Corporation Limited. The results of this company are
     not material to the Group.

<PAGE>

BROCKER TECHNOLOGY GROUP LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

2    SIGNIFICANT ACCOUNTING POLICIES (Continued)

b)   Goodwill

     The excess of cost over the fair value of identifiable net assets of
     subsidiaries acquired is recorded as goodwill and is amortised on a
     straight-line basis over its estimated useful life, considered to be five
     to ten years. On an ongoing basis, management reviews the valuation and
     amortisation of goodwill taking into consideration any events and
     circumstances which might have impaired the fair value.

     Where an acquisition price is contingent on a future event or events, no
     goodwill is recognised until the final acquisition price can be reasonably
     determined.

c)   Foreign Currency

     Foreign currency transactions are recorded in the exchange rates in effect
     at the date of settlement.

     The financial statements of foreign operations are translated to Canadian
     dollars using weighted average exchange rates for the period for items
     included in the statement of earnings, period end rates for assets and
     liabilities included in the balance sheet and historical rates for equity
     transactions. The cumulative translation adjustment represents the deferred
     foreign exchange gain or loss on the translation of the financial
     statements.

d)   Inventories

     Inventories principally comprise finished goods and are carried at the
     lower of cost and net realisable value. Cost is determined on a weighted
     average or first in first out basis.

e)   Capital Assets

     Capital assets are recorded at cost. Depreciation is calculated on a
     declining balance basis (except for leasehold improvements where a straight
     line basis is used) using the following rates:

     Land                                                        0%
     Buildings                                                   2%
     Office equipment                                           20%
     Vehicles                                            20 and 26%
     Furniture and fixtures                                     20%
     Computer hardware                                    20 to 30%
     Computer software                                     30 - 40%
     Plant and Equipment                                   20 - 26%
     Leasehold improvements                            1 to 4 years
     Computer hardware held for rental                 2 to 3 years

f)   Revenue recognition

     The Company earns substantially all of its revenue for the sale and
     delivery of products to its customers. Revenue is recorded when the
     products are shipped to customers.

<PAGE>

BROCKER TECHNOLOGY GROUP LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

2    SIGNIFICANT ACCOUNTING POLICIES (Continued)

g)   Research and development expenditures

     Research costs, other than capital expenditures, are expensed as incurred.
     Development costs are expended as incurred unless they meet the criteria
     under generally accepted accounting principles for deferral and
     amortisation. Deferred development costs are amortised over the life of the
     developed product, currently a maximum of three years.

h)   Deferred Income Taxes

     The Company follows the deferral method of income tax allocation such that
     deferred income taxes are recognised when income and expense items are
     reported for income tax purposes in years different from those in which
     they are recorded for financial reporting purposes.

i)   Use of estimates

     The preparation of financial statements in accordance with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the amounts reported in the financial statements
     and accompanying notes. Actual results could differ from those estimates.

3    ACQUISITIONS

     During the six months to September 30, 1999 Brocker Technology Group (NZ)
     Limited acquired the net assets of Tech Support Limited for a total cash
     consideration of NZ$45,000. Tech Support Limited offers technical support
     and advise to a wide range of customers in Auckland, New Zealand.

     No additional amounts are payable in respect to this acquisition. The
     purchase price may, however, be reduced in the event certain warranties
     made be the Vendors do not eventuate.

     The acquisition has been accounted for using the purchase method. Net
     assets acquired and consideration paid are as follows:

     Net current assets                                     37,470
     Capital assets                                          9,555
     Net current liabilities                               (22,822)
     Goodwill attributed                                     9,628
                                                           -------
     Consideration paid                                     33,831

4    CAPITAL ASSETS

     During the 1998 Brocker Technology Group (NZ) Limited have acquired new
     premises in Auckland, New Zealand. The $2.6M purchase price of this
     property has been acquired by way of mortgage finance of $2,292,000.

<PAGE>

BROCKER TECHNOLOGY GROUP LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

5    DEFERRED DEVELOPMENT COSTS

     As at September 30, 1999 development costs of $1,144,474 had been
     capitalised. These costs principally relate to the development of software
     applications.

6    INVESTMENT IN ASSOCIATED COMPANY

     During 1998 Brocker Technology Group (NZ) Limited took a 20% founding
     shareholding on Highway Technologies Limited. This Company has developed
     new technology capable of providing transport and highway management,
     operation and funding solutions.

     In addition to the investment, Brocker Technology Group (NZ) Limited has
     entered an agreement to loan Highway Technologies Limited funds during the
     Company's establishment phase up to a maximum of NZ$1.5M. Interest is
     payable on these funds at 30% per annum. As at September 30, 1999 amounts
     advanced to Highway Technologies Limited amounted to NZ$963,172.

7    INDEBTEDNESS

(a)  The components of indebtedness are follows:

     Mortgage finance liability                                  2,139,237

     Less current portion                                         (184,821)
                                                                 ---------
                                                                 1,954,416

     Capital lease obligations payable in New Zealand
     dollars, with interest rates ranging from 6.6% to
     14.5% per annum, collateralised by related assets,
     payable over 1 to 3 years                                      76,715

     Less current portion                                          (13,532)
                                                                 ---------
                                                                    63,183

     An unsecured term liability repayable in NZ$                   52,625
                                                                 ---------
                                                                 2,070,224
                                                                 =========

(b)  Since the year end Sealcorp Computer Products Limited, Sealcorp
     Telecommunications Group Limited and Sealcorp Australia Pty Limited (all
     subsidiaries of the Company) have successfully renegotiated their financing
     arrangements. A new NZ$20M financing facility, secured by a registered
     first debenture over the assets and undertakings of these companies,
     replaces the previous facility, of similar terms, which was terminated
     during the period.

<PAGE>

BROCKER TECHNOLOGY GROUP LTD
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

SHARE CAPITAL

Authorised

Unlimited number of common shares
Unlimited number of Preferred Shares
10,000,000 Series A Preferred Shares 6 1/2% cumulative

Issued and outstanding                       1999                1998
                                                $                   $

Common shares                           5,339,125           1,890,548
Series A Preferred                      1,609,365           3,043,049

          Less: Share issue costs         (41,769)            (41,769)
                                        ---------           ---------
                                        6,906,721           4,891,828

As at September 30, 1999 there were 1,583,875 shares are being held in escrow
pursuant to Escrow Agreement which provide for the release of such shares on a
performance basis.

<PAGE>

                                  SCHEDULE 4(m)
                           AGENTS FOR THE CORPORATION

          AGENT                              COMMISSION          OPTIONS
          -----                              ----------          -------

HSBC SECURITIES (CANADA) INC.                $21,875.00          10,000
GOEPEL McDERMID INC.                          $7,000.00           3,200
MERRILL LYNCH CANADA INC.                     $3,500.00           1,600
SCOTIA McLEOD INC.                           $14,000.00           6,400
NATIONAL BANK FINANCIAL                       $3,500.00           1,600
WOOD GUNDY                                    $5,250.00           2,400
RBC DOMINION SECURITIES                       $7,000.00           3,200
GARY COOPER                                  $15,750.00              --
MORTEN BORCH                                $109,375.00              --
                                           ------------          ------
                                           $187,250,000          28,400
                                           ============          ======

<PAGE>

                                 SCHEDULE 4(ff)

                                                             Intellectual [LOGO]
                                                                 Property Office
                                                                  of New Zealand
                                                                  To [ILLEGIBLE]

                     CERTIFICATE OF TRADE MARK REGISTRATION

                                 Number 310570

                                     [LOGO]
                                     Telco

     (II) proposed to be used by the proprietor(s), (being the applicant)

     310570:  Filed in New Zealand 4 June 1999.  Class 9: cellular  accessories.
     SEALCORP  TELECOMMUNICATIONS  GROUP LTD, Brocker Technology Park, 17 Kahika
     Road,  Beach Haven,  (PO Box 99-222),  Auckland,  New Zealand,  Address for
     Service:  Brocker  Technology  Park, 17 Kahika Road,  Beach Haven,  (PO Box
     99-222), Auckland, NZ

I hereby  certify that,  pursuant to the New Zealand Trade Marks Act 1953,  that
this Trade Mark No.  310570 was  advertised  in Journal  No.  1443  issued on 30
August 1999 and has been  registered  in Part A, on 20 December 1999 with effect
from 4 June 1999.

<PAGE>

                                 SCHEDULE 6(h)

                         BROCKER TRECHNOLOGY GROUP LTD.

                 Public Offering of 1,800,000 Special Warrants

                                 CLOSING AGENDA

PRE-CLOSING         5:00 p.m. (Toronto time) January 20, 2000

CLOSING TIME:       10:00 a.m. (Toronto time) January 21, 2000

PLACE:              Stikeman Elliott
                    Suite 5300 Commerce Court West
                    Toronto, Ontario

PARTIES:            Brocker Technology Group Limited ("Corportion")
                    represented by:

                    Michael Ridgway

                    Thomson Kernaghan & Co. Limited ("Thomson Kernaghan")
                    represented by:

                    Lionel Conacher
                    Darren Wallace

                    Montreal Trust Company of Canada ("Montreal Trust")
                    represented by:

                    Tina Vitali
                    Donata Konigsberg

                    Chamberlain Hutchison ("Chamberlain")
                    represented by:

                    Andrew J. Chamberlain

                    Stikeman Elliott ("Stikeman")
                    represented by:

                    Daniel H. Thomson

DEFINE TERMS

Any term not otherwise defined herein shall have the menaing  attributed thereto
in the Agency  Agreement  dated  January 21, 2000 between the  Corporation,  and
Thomson Kernaghan.

ESCROW

All  deliveries  and  all  payments  described  below  in the  Section  entitled
"Closing" shall be held in escrow

<PAGE>

                                       2

until:  (a) all such deliveries and payments have been delivered and made to the
satisfaction  of the  parties  to whom  the  deliveries  or  payments  are to be
deliverd or made; and (b) all parties have agreed to terminate the escrow.  Upon
both of such events occurring,  the documents and payments shall be deemed to be
released  in the order,  in the  manner and to the  parties as set forth in this
Closing  Agenda.  In the event that the conditions  specified in clauses (a) and
(b) above are not met on or before 4:30 p.m. (Toronto time) on the Closing Date,
or as such other time as the  parties may agree,  all  deliveries  and  payments
shall be returned to the party tabling the same.

The docments  noted below will be made  available at Closing in the  appropriate
number of  counterparts  or copies for  Standard  Delivery.  The term  "Standard
Delivery"  indicates  that an original of the document shall be delivered to all
parties involved. Certain of the documents have been delived to the Corporation,
Thomas Kernaghan, Chamberlain Hutchison, Stikeman Elliott and any other personal
party thereto

       DOCUMENT                              TABLED BY         DELIVERED TO

A.     Pre-Closing

A-1    Engagement Letter between the         Chamberlain       Standard Delivery
       Corporaiton and Thomson Kernaghan
       including the Term Sheet

A-2    Copies of correspondence to           Chamberlain       Standard Delivery
       the TSE seeking conditional
       listing

A-3    Copies of TSE price protection        Chamberlain       Standard Delivery
       and conditional listing approval

B.     Closing

I      Corporate Authority

B-1    Certified Copy of Directors'          Corporation       Standard Delivery
       Resolution authorizing, among other
       things, Agency Agreement, Special
       Warant Indenture, Special Warrants;
       agent's special option, agent's
       option, allotment of underlying
       Common Shares (including penalty
       shares); appointment of Special
       Warrants Trustee; TSE listing
       applicaitons; execution of
       documentation

B-2    Certified Copy of Articles and        Corporation       Standard Delivery
       By-laws of the Corporation

B-3    Certificate of Incumbency             Corporation       Standard Delivery

B-4    Certificate of Status for             Corporation       Standard Delivery
       Corporation

B-5    Certificate of the Corporation        Corporation       Standard Delivery
       as a reporting issuer not in
       default pursuant to Securities
       Acts of Alberta and Ontario

<PAGE>

                                       3

B-6    Confirmation by Montreal Trust        Montreal Trust    Thomsan Kernaghan
       of outstanding shares and other                         Standard Delivery
       rights as of the close of
       business on the Closing Date

II     Special Warrant Trustee

B-7    Certified copies of By-laws and       Montreal Trust    Standard Delivery
       resolutions Montreal Trust of
       Montreal Trust with respect to
       signing and certifying authority
       together with specimen signatures

B-8    Special Warrant Indenture             Corporation       Standard Delivery

B-9    Specimen Special Warrant              Corporation       Standard Delivery
       Certificate

III    Opinions and Supporting Documents

B-10   Officer's Certificate                 Corporation       Standard Delivery

B-11   Opinion of Chamberlain addressed      Chamberlain       Standard Delivery
       to Thomson Kernaghan and each of
       the Purchasers

B-12   Opinion of local counsel addressed    Local counsel     Standard Delivery
       to Thomason Kernaghan and each of
       the Purchasers in:
       a)B.C.
       b)Ontario
       c)Newfoundland
       d)California

B-12A  Opinion of Chamberlain to MTCC        Chamberlain       Original to MTCC
                                                               Standard Delivery
                                                               of Copies

IV     Purchase of Special Warrants

B-13   Executed Agency Agreement,            Thomson Kernaghan Standard Delivery
       together with form of Agent's
       Special Option certificate and
       Agent's Option certificate

B-14   Executed Subscription Agreements      Thomson Kernaghan Standard Delivery
       and private placement                 Corporation
       questionnaries and undertakings

B-15   List of Purchasers together with      Thomson Kernaghan Standard Delivery
       registration details from Thomson     Chamberlain
       Kernaghan and Chamberlain
       Hutchison

B-16   Direction form the Corporation        Corporation       Standard Delivery
       to pay gross proceeds of the

<PAGE>

                                       4

       Offering received from Thomson
       Kernaghan subscribers (plus 6
       others) less commission and
       Stikeman legal fees

B-17   Cheque for net proceeds realized      Thomson Kernaghan Standard Delivery
       from the sale of Special Warrants

B-18   Receipt of Corporation of net         Corporation       Thomson Kernaghan
       proceeds to Thomson Kernaghan                           (originals)
                                                               Standard Delivery
                                                               (copies)

B-19   Receipt of Thomson Kernaghan          Thomson Kernaghan Corporation
       for commissions                                         (original)
                                                               Standard Delivery
                                                               (copies)

B-20   Acknowledgement of Corporation        Corporation       Standard Delivery
       to Thomson Kernaghan of all
       Thomson Kernaghan subscribers
       for Special Warrants paid in full

B-21   Intentionally Deleted

B-22   Intentionally Deleted

B-23   Direction of Corporation as to        Corporation       Montreal Trust
       registration of all Special                             (originals)
       Warrant Certificates                                    Standard Delivery
                                                               (copies)

B-24   Special Warrant Certificates          Corporation       Thomson Kernaghan
       registered in the name of each        Montreal Trust    (originals)
       Subscriber                                              Standard Delivery
                                                               (copies)

B-25   Receipt of Corporation on behalf      Corporation       Montreal Trust
       of Presidents' list subscribers                         (orignals)
       for Special Warrant Certificates                        Standard Delivery
       relating to the President's List                        (copies)
       Subscriptions

B-26   Receipt of Thomson Kernaghan on       Thomson Kernaghan Montreal Trust
       behalf of the Thomson Kernaghan                         (original)
       Purchasers for Special Warrant                          Standard Delivery
       Certificates                                            (copies)

B-27   Executed Agent's Special Option       Corporation       Thomson Kernaghan
       Certificate in favour of Thomson                        (originals)
       Kernaghan                                               Standard Delivery
                                                               (copies)

B-28   Receipt for Executed Agent's          Thomson Kernaghan Thomson Kernaghan
       Special Option Certificate                              (originals)
                                                               Standard Delivery
                                                               (copies)

B-29   Undertaking of Corporation to         Corporation       Thomson Kernaghan
       deliver Agent's Options to                              (originals)
       sub-agents responsible for President's                  Standard Delivery
       Warrant subscriptions                                   (copies)

C.     Matters to be compedted after Closing

C-1    Press Release                         Corporation       Standard Delivery

<PAGE>

                                       5

C-2    Material Change Reports for           Corporation       Standard Delivery
       Ontario and Alberta

C-3    Notice of Closing to TSE              Corporation       Standard Delivery
       - covering letter
       - corporation's confirmation
       - special warrant indenture
       - special warrant certificate
       - sample subscription agreement
       - executed Questionnaires and Undertakings
       - opinion
       - executed agency agreement
       - listing fee $5911.95 including GST

C-4    Filing of Form 20 or equivalent       Corporation       Standard Delivery
       in each Qualifying Province and
       payment of relevant fees

C-5    Preparation and filing of             Corporation       Standard Delivery
       Prospectus

C-6    Evidence of Payment of                Corporation       Standard Delivery
       Corporation to each sub-agent's
       commission

C-7    Copy of executed special option       Corporation       Standard Delivery
       certificate in favour of each
       sub-agent up to an aggregate total of
       options to ultimately acquire
       30,000 common shares

C-8    Receipt from each sub-agent re:       Corporation       Standard Delivery
       commission and special option
       certificate

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