Document:

Purchase and Sale Agreement Between
                             Great Basin Water Company and Round III Enterprises
                                                               November 10, 2000
                                                                       Page 1 of

CONTRACT FOR THE SALE AND PURCHASE OF CORPORATE ASSETS
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AGREEMENT  made November 10, 2000,  between Great Basin Water  Company,  Inc., a
Nevada  corporation  with its principal  place of business at 2950 East Flamingo
Road,  Suite  F,  Las  Vegas,  Nevada,   89121  ("Purchaser"),   and  Round  III
Enterprises,  a California corporation,  with its principal place of business at
2707 Garnet Avenue, Ste. 200, San Diego, California ("Seller").

RECITALS
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Seller is a  corporation  engaged in the business of operating  and  maintaining
four   internet   web   sites  on  the  world   wide  web:   Dictionaryhill.com,
OTCVision.com, Equityminded.com, and UpWeGo.com. Seller owns outright all rights
to the web sites:  Dictionaryhill.com,  OTCVision.com  and  UpWeGo.com.  Seller,
while  maintaining  and  operating  the web  site  Equityminded.com,  has only a
license to use the trademarks, tradenames, service marks, copyrights and graphic
images related to Equityminded.com.

Seller desires to sell the internet web sites Dictionaryhill.com, OTCVision.com,
and  UpWeGo.com,  and the rights to operate and maintain  that web site known as
Equityminded.com.  Seller  desires  to assign its  license  to use  intellectual
property related to Equityminded.com, including, but not limited to, trademarks,
tradenames,  service marks,  and copyrights and any related  graphic images used
under license.

By virtue of a license between Andrew Austin and Seller, Seller does not own any
intellectual  property related to Equityminded.com,  including,  but not limited
to, its tradename,  trademark,  service mark,  copyright,  or any graphic images
associated with Equityminded.com.  Seller acknowledges Andrew Austin's ownership
of those particular  items, and that while the license to use said  intellectual
property may be assigned by Seller, they cannot be sold.

Seller's Board of Directors, and the owners and holders of all of its issued and
outstanding  shares,  have duly authorized and approved the sale of the internet
web sites:  Dictionaryhill.com,  OTCVision.com, and UpWeGo.com, and intellectual
property associated with the web sites. Also,  Seller's Board of Directors,  and
the owners and  holders of all its  issued  and  outstanding  shares,  have duly
authorized  and approved the assignment of the license  contract  between Seller
and Andrew Austin regarding intellectual property related to Equityminded.com.

Purchaser is a  corporation  engaged in the business of acquiring  companies and
business entities which are consistent with its business plan and purposes.

<PAGE>

                                             Purchase and Sale Agreement Between
                             Great Basin Water Company and Round III Enterprises
                                                               November 10, 2000
                                                                       Page 2 of

Purchaser    desires   to   purchase   the   Seller's    internet   web   sites:
Dictionaryhill.com,  OTCVision.com,  and  UpWeGo.com,  as  well  as the  related
intellectual property and good will associated with them.

Purchaser recognizes that the intellectual property related to Equityminded.com,
including,  but  not  limited  to,  its  tradename,   trademark,  service  mark,
copyright,  or related graphic images,  are not owned by Seller and are not part
of this sale and purchase  agreement,  except insofar as the license to use said
intellectual property may be assigned to Purchaser.

Purchaser's  Board of  Directors  determined  that  the  purchase  of the  above
referenced   assets   consisting   of   the   web   sites:   Dictionaryhill.com,
OTCVision.com,  and UpWeGo.com, and the acquisition of the intellectual property
license  between  Seller  and Andrew  Austin  related  to  Equityminded.com  are
consistent with the Purchaser's objectives.

The  parties  intend  to have the  transaction  contemplated  by this  agreement
treated as a tax-free  exchange  of stock for  Seller's  assets  under  Seller's
Agreement and Plan of  Reorganization  pursuant to Section  368(a)(1)(C)  of the
Internal Revenue Code of 1986, as amended,  and all provisions contained in this
agreement shall be interpreted to effectuate such intent.

It is therefore agreed:
-----------------------

ARTICLE 1. Sale of assets.  Seller shall sell to Purchaser,  and Purchaser shall
purchase and  acquire,  all rights and  computer  code to Seller's  internet web
sites:  Dictionaryhill.com,  OTCVision.com, and UpWeGo.com, including the domain
names, trademarks, tradenames, service marks.

1.01 Seller shall also assign to  Purchaser,  and  Purchaser  shall  acquire and
assume all rights and duties  thereunder,  Seller's  license to use intellectual
property solely owned by Andrew Austin related to the web site Equityminded.com,
including,  but not  limited  to: any  tradename,  trademark,  service  mark and
related graphic image or images set forth in Exhibit "A" hereto.

<PAGE>

                                             Purchase and Sale Agreement Between
                             Great Basin Water Company and Round III Enterprises
                                                               November 10, 2000
                                                                       Page 3 of

ARTICLE 2. Purchase Price. In consideration for such sale, Purchaser shall issue
to Seller or its nominees,  ten million shares (10,000,000) of $0.001 par value,
fully paid and  nonassessable  voting  shares of  Purchaser.  The stock shall be
issued  no  later  than  10  days  after  the  Seller   provides  the  Purchaser
instructions  for the  issuance  of  certificates.  In  order  that  Seller  may
distribute   such  voting  shares  readily  to  its   shareholders,   the  share
certificates  issued by Purchaser shall be in the  denominations,  amounts,  and
names requested by Seller. If Purchaser  effects a stock split,  stock dividend,
reverse  stock  split,  spin-off,  or similar  change in its  capital  structure
between the date of this agreement and the date the stock is issued, there shall
be an equitable  adjustment  to the number of shares to be issued in  accordance
with the terms and  conditions  of this  paragraph  to  reflect  such  change or
changes.  Purchaser shall bear all necessary and reasonable expenses incurred by
Seller  in the  distribution  of  such  voting  preference  shares  to  Seller's
shareholders,  except that Purchaser  shall bear those  expenses  referred to in
Article 6 of this agreement.

ARTICLE  3.  Assumption  of  contract  commitments.  Seller  shall  assign,  and
Purchaser  shall  acquire  and  assume  all  rights  and  duties  related to all
contracts  necessary  for the operation of the web sites that are the subject of
this  agreement:  OTCVision.com,   Equityminded.com,   Dictionaryhill.com,   and
UpWeGo.com,  including, but not limited to: service contracts between Seller and
CariNet for lease of an internet computer server and an installment  contract to
purchase an e-commerce server, both attached hereto as Exhibit "B."

3.01 Purchaser shall perform all contracts and commitments  made in the ordinary
course of Seller's  business which are  outstanding on the date of closing,  and
shall  indemnify and hold Seller  harmless  against all  liabilities  under such
contracts  and  commitments,  including  costs and  attorney  fees,  except that
Purchaser  shall  not be  responsible  for the  breach of any such  contract  or
commitment which occurs before the date of closing.

ARTICLE 4.     Representations of Seller.

4.01 Authority. Its Board of Directors and shareholders have duly authorized and
approved  execution of this agreement and the sale of its assets.  Copies of the
minutes of the directors' and shareholders'  meeting at which such authorization
and approval were granted, duly certified by the Seller's Secretary, are annexed
as Exhibit "C."

ARTICLE  5.  Transfer  Date.  All  assets and  associated  leases and  contracts
transferred  hereby shall be considered  transferred  or assigned on the date of
this contract.

<PAGE>

                                             Purchase and Sale Agreement Between
                             Great Basin Water Company and Round III Enterprises
                                                               November 10, 2000
                                                                       Page 4 of

ARTICLE 6.  Representations of Purchaser.  Purchaser warrants and represents the
following are now true and will be true at closing:

6.01 It is a corporation duly organized and existing under the laws of the State
of Nevada, authorized to issue twenty five million (25,000,000) shares.

6.02 Authority. Its Board of Directors has duly authorized the execution of this
agreement.

ARTICLE 7. Purchaser's  Covenants.  Purchaser covenants with Seller that pending
the closing:

7.01 Its business will only be conducted in the ordinary course.

7.02 No dividend or other  distribution or payment will be declared or paid with
respect to its outstanding shares and it will not redeem, purchase, or otherwise
acquire such shares.

7.03 No change will be made in its authorized  and  outstanding  shares,  except
when required to comply with the terms of this agreement.

ARTICLE 8. Closing. This matter shall be considered closed on the date hereof.

ARTICLE 9. No  Violation  or Breach.  The parties  represent  to each other that
their  performance  of this  agreement,  including  any  conditions or surviving
warranties or  representations,  is not in violation of any law, statute,  local
ordinance, state or federal regulation,  court order, or administrative order or
ruling,  and that such performance is not in violation of any agreement by which
either of them are bound.

ARTICLE 10.  Governing  Law. This agreement  shall be construed and  interpreted
under the laws of the State of California.

ARTICLE 11. Binding Effect.  This agreement shall inure to the benefit of and be
binding on the parties and their respective successors and assigns.

ARTICLE 12. Counterparts.  This agreement may be executed  simultaneously in any
number of  counterparts,  each of which shall be deemed an original,  but all of
which together shall constitute one and the same instrument.

<PAGE>

                                             Purchase and Sale Agreement Between
                             Great Basin Water Company and Round III Enterprises
                                                               November 10, 2000
                                                                       Page 5 of

ARTICLE 13. Notices.  All notices,  requests,  demands, and other communications
hereunder shall be made in writing and deemed to have been given if delivered or
mailed,  first class postage prepaid, to the address of the appropriate party as
shown on the first page of this agreement.

ARTICLE 14.  Non-Waiver.  No delay or failure by either  party to  exercise  any
right  hereunder,  and no partial or single  exercise of any such  right,  shall
constitute  a waiver  of that or any other  right,  unless  otherwise  expressly
provided for herein.

ARTICLE  15.  Headings.  Headings  in  this  agreement  are  for  reference  and
convenience only and shall not be sued to interpret or construe its provisions.

ARTICLE 15. Time of Essence. Time is of the essence of this agreement.

ARTICLE 17. Entire Agreement;  Modification. This agreement supersedes all prior
agreements and constitutes the entire agreement  between the parties hereto with
respect to the subject matter hereof.  It may not be amended or modified  except
by an instrument executed by the parties.

In witness whereof, the parties have signed this instrument on November 10, 2000

By:                                   By:

_____________________________         _____________________________
Ray Warren, Chairman of the Board     Andrew S. Austin, Chairman of the Board
Great Basin Water Company             Round III EnterprisesSECURITIES PURCHASE AGREEMENT

         THIS  SECURITIES  PURCHASE  AGREEMENT (this  "Agreement"),  dated as of
October 16, 2000, by and between Accesspoint  Corporation,  a Nevada corporation
(the "Company"), and RoyCap Inc., a Canadian corporation (the "Purchaser").

                                 R E C I T A LS

         WHEREAS,  Purchaser  desires to purchase a USD$450,000 Convertible Note
(the  "Convertible  Note") of the Company;

         WHEREAS,  Purchaser  desires to  purchase a warrant to  purchase  up to
1,200,000 shares of Common Stock, $0.001 par value per share of the Company (the
"Callable Warrant");

         WHEREAS,  Purchaser  desires to purchase a warrant to  purchase  70,000
shares of common  stock  (the  "Common  Stock"),  of the  Company  (the  "Common
Warrant"); and

         WHEREAS,  the Company  desires to issue and sell to the Purchaser,  and
Purchaser  desires to purchase  from the Company,  the Callable  Warrant and the
Common Warrant  (collectively,  the "Warrants") and the Convertible Note subject
to the terms and conditions set forth in this Agreement.

         NOW,  THEREFORE,  IN CONSIDERATION of the mutual covenants contained in
this Agreement,  and for other good and valuable  consideration  the receipt and
adequacy  are  hereby  acknowledged,  the  Company  and the  Purchaser  agree as
follows:

1.       SALE AND PURCHASE.

1.1.  SALE AND  PURCHASE.  Subject to the terms and  conditions  hereof,  at the
Closing (as defined in Section 2.1 hereof),  the Company  hereby agrees to issue
and sell to the Purchaser and the Purchaser agrees to purchase from the Company,
(i) the  Convertible  Note;  (ii) the  Callable  Warrant;  and (iii) the  Common
Warrant,  for an aggregate purchase price of Four Hundred Fifty Thousand Dollars
(USD$450,000) (the "Purchase Price"). The Purchase Price shall be paid in lawful
money of the United States of America at the Closing.

1.2.  CERTAIN TERMS.  For purposes of this  Agreement,  (i) "Business Day" shall
mean any day except Saturday,  Sunday and any day which shall be a federal legal
holiday or a day on which banking  institutions  in the State of California  and
the  country of Canada  generally  are  authorized  or  required by law or other
governmental  action  to  close,  and (ii) a  "Person"  means an  individual  or
corporation,  partnership,  trust,  incorporated or unincorporated  association,
joint venture, limited liability company, joint stock company, government (or an
agency or  subdivision  thereof) or other entity of any kind.  References to the
knowledge  or  belief  of the  Company  mean the  knowledge  or belief of senior
management of the Company.

                                      -1-

<PAGE>

2.       CLOSING, DELIVERY AND PAYMENT.

2.1.  CLOSING.  The  closing  (the  "Closing")  of the sale and  purchase of the
Convertible  Note,  the Callable  Warrant and the Common  Warrant  (collectively
called the  "Securities")  shall take place on the date hereof at the offices of
38 Executive Park, Suite 350, Irvine,  California,  92614, or at such other time
or  place  as the  Company  and  Purchaser  may  mutually  agree  (such  date is
hereinafter referred to as the "Closing Date").

2.2.  DELIVERY;  PAYMENT.  At the Closing,  subject to the terms and  conditions
hereof,  the Company will deliver to the Purchaser (i) the  Convertible  Note in
the form  attached  hereto as Exhibit A, (ii) the  Callable  Warrant in the form
attached hereto as Exhibit B, and (iii) the Common Warrant  substantially in the
form  attached  hereto as  Exhibit  C, to be  purchased  at the  Closing  by the
Purchaser,  against payment of the Purchase Price therefor by wire transfer made
payable  to the  order  of the  Company  or as it  shall  direct,  subject  to a
deduction for fees incurred by the Purchaser as set out in section 6.1 hereof.

3.       REPRESENTATIONS AND WARRANTIES.

3.1.     Representations  and  Warranties of the Company.  The Company  hereby
makes the following  representations  and  warranties to the Purchaser as of the
Closing Date:

(a)  ORGANIZATION  AND   QUALIFICATION.   The  Company  is  a  corporation  duly
incorporated,  validly existing and in good standing under the laws of the State
of Nevada with the  requisite  corporate  power and authority to own and use its
properties and assets and to carry on its business as currently  conducted.  The
Company has no subsidiaries other than Processing Source International, Inc. and
Black Sun Graphics,  Inc. (the  "Subsidiaries").  The Subsidiaries are entities,
duly  organized,  validly  existing and in good  standing  under the laws of the
State of California, with the requisite corporate power and authority to own and
use its  properties  and  assets  and to carry on their  business  as  currently
conducted.  Each of the Company and the  Subsidiaries  are duly  qualified to do
business  and is in good  standing as a foreign  corporation  or other entity in
each  jurisdiction  in which the nature of the  business  conducted  or property
owned  by them  makes  such  qualification  necessary,  except  in the  state of
Illinois to the extent  qualification  might be necessary,  and except where the
failure to be so qualified or in good  standing,  as the case may be, could not,
individually or in the aggregate, (x) adversely affect the legality, validity or
enforceability  of the  Securities or any of this  Agreement,  the  Registration
Rights  Agreement  or  the  Transfer  Agent  Instructions   (collectively,   the
"Transaction Documents"), (y) have or result in a material adverse effect on the
results of  operations,  assets,  or condition  (financial  or otherwise) of the
Company and the  Subsidiaries,  taken as a whole,  or (z)  adversely  impair the
Company's  ability to perform fully on a timely basis its obligations  under any
of the  Transaction  Documents  (any of (x),  (y) or (z),  a  "Material  Adverse
Effect").

(b) AUTHORIZATION;  ENFORCEMENT.  The Company has the requisite  corporate power
and authority to enter into and to consummate the  transactions  contemplated by
each of the  Transaction  Documents and  otherwise to carry out its  obligations
thereunder.  The execution and delivery of each of the Transaction  Documents by
the Company and the consummation by it of the transactions  contemplated thereby
have been duly authorized by all necessary  corporate  action on the part of the
Company  and  no  further  action  is  required  by  the  Company.  Each  of the

                                      -2-

<PAGE>

Transaction  Documents has been duly executed by the Company and, when delivered
(or  filed,  as the  case may be) in  accordance  with the  terms  hereof,  will
constitute the valid and binding obligation of the Company  enforceable  against
the Company in  accordance  with its terms,  except as such  enforcement  may be
limited  by  bankruptcy,   insolvency,   moratorium  or  similar  law  affecting
creditors' rights  generally,  or by general  principles of equity.  Neither the
Company nor any  Subsidiaries  are in violation of any of the  provisions of its
respective certificate of incorporation or by-laws.

(c)  CAPITALIZATION.   The  Company's   authorized  capital  stock  consists  of
25,000,000  shares of Common Stock and 5,000,000  shares of Preferred  Stock, of
which  16,078,172  shares of Common Stock and are issued and  outstanding  as of
September 30, 2000.  There are 6,122,352  shares of Common Stock  underlying the
Company's outstanding options and warrants as of September 30, 2000. The Company
owns all of the capital stock of the Subsidiaries.  No securities of the Company
or the  Subsidiaries  are entitled to preemptive or similar  rights,  nor is any
holder of securities of the Company or the  Subsidiaries  entitled to preemptive
or similar rights arising out of any agreement or understanding with the Company
or the  Subsidiaries  by virtue  of any of the  Transaction  Documents.  The SEC
Reports accurately reflect the Company's  outstanding  warrants and options.  To
the best knowledge of the Company,  except as specifically  disclosed in the SEC
Reports or Schedule 3.1(c),  no Person or group of related Persons  beneficially
owns (as  determined  pursuant to Rule 13d-3  promulgated  under the  Securities
Exchange Act of 1934,  as amended  (the  "Exchange  Act")),  or has the right to
acquire by agreement with or by obligation binding upon the Company,  beneficial
ownership of in excess of 5% of the Common Stock.

(d) ISSUANCE OF THE  SECURITIES.  The Securities are duly  authorized  and, when
issued and paid for in accordance with the terms hereof, will be validly issued,
fully  paid and  nonassessable,  free and clear of all liens,  encumbrances  and
rights of first refusal of any kind  (collectively,  "Liens").  The Company will
reserve 1,500,000 shares of Common Stock for issuance  hereunder upon conversion
of the Convertible Note and upon exercise of the Callable Warrant and the Common
Warrant. The shares of Common Stock issueable upon conversion of the Convertible
Note  and  upon  exercise  of  the  Warrants,  are  referred  to  herein  as the
"Underlying Common Shares."

(e) NO CONFLICTS.  The execution,  delivery and  performance of the  Transaction
Documents by the Company and the consummation by the Company of the transactions
contemplated  thereby  do not and  will not (i)  conflict  with or  violate  any
provision of the Company's or the Subsidiaries'  certificate of incorporation or
bylaws (each as amended  through the date hereof),  or (ii) subject to obtaining
the Required  Approvals  (as defined  below),  conflict  with,  or  constitute a
default (or an event  which with notice or lapse of time or both would  become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement,  credit facility,  debt or other instrument (evidencing a Company
or Subsidiaries  debt or otherwise) or other  understanding to which the Company
or the Subsidiaries are a party or by which any property or asset of the Company
or the Subsidiaries are bound or affected, or (iii) result in a violation of any
law, rule, regulation, order, judgment,  injunction, decree or other restriction
of any court or governmental  authority to which the Company or the Subsidiaries
are subject (including federal

                                      -3-

<PAGE>

and state securities laws and regulations), or by which any property or asset of
the Company or the  Subsidiaries are bound or affected;  except,  in the case of
each of clauses (ii) and (iii), as could not,  individually or in the aggregate,
have or result in a Material  Adverse Effect.  To the Company's  knowledge,  the
business  of the  Company  is not  being  conducted  in  violation  of any  law,
ordinance or regulation of any  governmental  authority,  except for  violations
which, individually or in the aggregate,  could not have or result in a Material
Adverse Effect.

(f) FILINGS,  CONSENTS AND APPROVALS.  Neither the Company nor the  Subsidiaries
are required to obtain any consent, waiver,  authorization or order of, give any
notice to, or make any filing or registration  with, any court or other federal,
state, local or other governmental  authority or other Person in connection with
the  execution,  delivery  and  performance  by the  Company of the  Transaction
Documents,  other than (i) the filings  required  pursuant to Section 4.10, (ii)
the filing with the Securities and Exchange Commission (the "Commission") of one
or more  registration  statements  meeting  the  requirements  set  forth in the
Registration  Rights Agreement and covering the resale of the Underlying  Common
Shares by the Purchaser (the "Underlying Shares Registration Statement"),  (iii)
the application(s), if any, to the Nasdaq or the Over-the-Counter Bulletin Board
for the listing or  quotation of the  Underlying  Common  Shares any  securities
exchange,  market or quotation service on which the Common Stock is then listed,
traded or quoted in the time and manner required  thereby,  (iv) applicable Blue
Sky  filings,  and (v) in all other  cases  where  the  failure  to obtain  such
consent,  waiver,  authorization  or order,  or to give such notice or make such
filing  or  registration  could not have or result  in,  individually  or in the
aggregate,  a Material  Adverse Effect (the items described in clauses  (i)-(vi)
are collectively, the "Required Approvals").

(g)  LITIGATION;  PROCEEDINGS.  Except  as set  forth  on  Schedule  3.1(g)  and
specified in the SEC Reports,  there is no action,  suit,  notice of  violation,
proceeding  or  investigation  pending  or,  to the  knowledge  of the  Company,
threatened  against or affecting the Company or the Subsidiaries or any of their
respective  properties  before or by any court,  governmental or  administrative
agency or regulatory authority (federal,  state, county, local or foreign) which
(i) adversely affects or challenges the legality,  validity or enforceability of
any of the Transaction  Documents or the Securities or (ii) could,  individually
or in the aggregate, have or result in a Material Adverse Effect.

(h) NO DEFAULT OR VIOLATION.  Neither the Company nor the Subsidiaries (i) is in
default  under or in violation of (and no event has occurred  which has not been
waived which, with notice or lapse of time or both, would result in a default by
the Company or the Subsidiaries  under), nor has the Company or the Subsidiaries
received  notice  of a  claim  that  it is in  default  under  or  that it is in
violation of, any indenture,  loan or credit agreement or any other agreement or
instrument  to which it is a party  or by which it or any of its  properties  is
bound  (whether or not such default or violation  has been  waived),  (ii) is in
violation of any order of any court,  arbitrator or governmental  body, or (iii)
is in  violation  of  any  statute,  rule  or  regulation  of  any  governmental
authority,  except as could not individually or in the aggregate, have or result
in a Material Adverse Effect.

(i) EXEMPTION FROM  REGISTRATION.  Assuming the accuracy of the  representations
and  warranties of the Purchaser  set forth in Sections  3.2(b)-(g),  the offer,

                                      -4-

<PAGE>

issuance and sale of the  Preferred  Shares and the Warrants to the Purchaser as
contemplated  hereby  are  exempt  from  the  registration  requirements  of the
Securities Act of 1933, as amended (the "Securities Act").

(j) SEC  REPORTS;  FINANCIAL  STATEMENTS.  The  Company  has filed  all  reports
required to be filed by it under the Securities Act and the Exchange Act for the
lesser of one year  preceding  the date  hereof or since the date its  reporting
obligations arose (the foregoing materials being collectively referred to herein
as the "SEC Reports" and,  together  with the Schedules to this  Agreement,  the
"Disclosure Materials") on a timely basis. As of their respective dates, the SEC
Reports  complied  in  all  material  respects  with  the  requirements  of  the
Securities  Act  and the  Exchange  Act and the  rules  and  regulations  of the
Commission  promulgated  thereunder,  and none of the SEC  Reports,  when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated  therein or necessary in order to make the statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.  All material agreements to which the Company is a party or to which
the property or assets of the Company are subject (other than this Agreement and
the  other  Transaction  Documents  which  will  be  filed  as  Exhibits  to the
Underlying  Shares  Registration  Statement) which are required by the SEC to be
filed have been filed as exhibits to the SEC Reports.  The financial  statements
of the Company included in the SEC Reports comply in all material  respects with
applicable  accounting  requirements  and  the  rules  and  regulations  of  the
Commission  with  respect  thereto  as in  effect  at the time of  filing.  Such
financial  statements have been prepared in accordance  with generally  accepted
accounting  principles applied on a consistent basis during the periods involved
("GAAP"),  except as may be otherwise specified in such financial  statements or
the notes  thereto,  and fairly  present in all material  respects the financial
position  of the  Company and its  consolidated  subsidiaries  as of and for the
dates thereof and the results of operations  and cash flows for the periods then
ended,  subject,  in the case of unaudited  statements,  to normal,  immaterial,
year-end audit adjustments. Except as specifically disclosed in the SEC Reports,
(a) there has been no event,  occurrence or  development  that has or that could
reasonably be expected to result in a Material  Adverse Effect,  (b) the Company
has not  incurred  any  liabilities  (contingent  or  otherwise)  other than (x)
liabilities  incurred in the ordinary  course of business  consistent  with past
practice and (y)  liabilities  not  required to be  reflected  in the  Company's
financial  statements  pursuant to GAAP or required to be  disclosed  in filings
made  with the  Commission,  (c) the  Company  has not  altered  its  method  of
accounting or the accounting firm serving as its financial  auditors and (d) the
Company has not  declared or made any payment or  distribution  of cash or other
property to its  stockholders or officers or directors (other than in compliance
with existing  Company stock or stock option plans and existing  agreements  and
terms of employment)  with respect to its capital stock, or purchased,  redeemed
(or made any agreements to purchase or redeem) any shares of its capital stock.

(k)      INVESTMENT  COMPANY.  The  Company  is not,  and is not an  Affiliate
(as defined in Rule 405 under the Securities  Act) of, an  "investment  company"
within the meaning of the Investment Company Act of 1940, as amended.

(l)  CERTAIN  FEES.  Except  for fees  paid to David  Jackson  or any  affiliate
thereof, or as otherwise disclosed by the Company to the Purchaser,  nof fees or
commissions will be payable by the Company to any broker,  financial  advisor or
consultant,  finder,  placement

                                      -5-

<PAGE>

agent, investment banker, bank or other person, with respect to the transactions
contemplated by this Agreement.

(m) FORM S-3 ELIGIBILITY. The Company is not expected to be eligible to register
the  Underlying  Common Shares for resale under Form S-3  promulgated  under the
Securities Act.

(n) LISTING AND MAINTENANCE  REQUIREMENTS.  The Company has not, in the one year
preceding the date hereof  received  notice (written or oral) from the Nasdaq or
any other stock exchange,  market or trading  facility on which the Common Stock
is or has been  listed (or on which it has been  quoted) to the effect  that the
Company is not in compliance  with the listing or  maintenance  requirements  of
such exchange,  market or trading facility. The Company is, and has no reason to
believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements.

(o) PATENTS AND  TRADEMARKS.  The Company  and the  Subsidiaries  have,  or have
rights  to  use,  all  patents,  patent  applications,   trademarks,   trademark
applications,  service  marks,  trade  names,  copyrights,  licenses  and rights
(collectively,  the  "Intellectual  Property Rights") which the Company believes
are necessary or material for use in connection with their respective businesses
as described in the SEC Reports and as currently  conducted,  and the failure to
have which  could  reasonably  be expected  to have a Material  Adverse  Effect.
Neither the Company nor the Subsidiaries have received a written notice that any
of the  Intellectual  Property  Rights used by the  Company or the  Subsidiaries
violates or  infringes  upon the rights of any Person.  To the  knowledge of the
Company,  all such Intellectual  Property Rights are enforceable and there is no
existing  infringement  by another  Person of any of the  Intellectual  Property
Rights.

(p)  REGULATORY   PERMITS.   The  Company  and  the  Subsidiaries   possess  all
certificates,  authorizations  and permits  issued by the  appropriate  federal,
state or foreign  regulatory  authorities  necessary to conduct their respective
businesses as described in the SEC Reports,  except where the failure to possess
such permits could not,  individually  or in the aggregate,  have or result in a
Material Adverse Effect  ("Material  Permits"),  and neither the Company nor the
Subsidiaries have received any notice of proceedings  relating to the revocation
or modification of any Material Permit.

(q) TITLE.  Neither  the  Company nor the  Subsidiaries  own any real  property.
Except as set forth in Schedule 3.1(q),  the Company and the  Subsidiaries  have
good  and  marketable  title to all  personal  property  owned by them  which is
material to the business of the Company and the Subsidiaries,  in each case free
and clear of all Liens, except for Liens that do not materially affect the value
of such property and do not  materially  interfere with the use of such property
by the Company or the Subsidiaries.  Any real property and facilities held under
lease  by the  Company  and the  Subsidiaries  are  held by  them  under  valid,
subsisting and  enforceable  leases with such exceptions as are not material and
do not  materially  interfere with the use of such property and buildings by the
Company and the Subsidiaries.

(r) DISCLOSURE.  The Company  confirms that it has not provided the Purchaser or
their  agents  or  counsel  with  any  information  that  constitutes  or  might
constitute  material  non-public  information.  This  Agreement,  including  the
Schedules to this Agreement,  are true and

                                      -6-

<PAGE>

correct and do not contain any untrue  statement  of a material  fact or omit to
state any material fact  required to be stated  therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.

3.2.     REPRESENTATIONS   AND   WARRANTIES  OF  THE   PURCHASER.  The Purchaser
hereby makes the following  representations  and warranties to the Company as of
the Closing Date:

(a) ORGANIZATION;  AUTHORITY. The Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the Province of Ontario,  Canada
and have the  requisite  corporate  power  and  authority  to enter  into and to
consummate  the  transactions  contemplated  by the  Transaction  Documents  and
otherwise  to  carry  out  its  obligations  thereunder.  The  purchase  of  the
Securities  hereunder has been duly  authorized  by all necessary  action on the
part of the  Purchaser.  Each  of this  Agreement  and the  Registration  Rights
Agreement  has been  duly  executed,  and when  delivered  by the  Purchaser  in
accordance with the terms hereof,  will constitute the valid and legally binding
obligation  of the  Purchaser,  enforceable  against it in  accordance  with its
terms,  except as such  enforcement  may be limited by  bankruptcy,  insolvency,
moratorium or similar law affecting  creditors' rights generally,  or by general
principles of equity.

(b)  INVESTMENT  INTENT.  The Purchaser is acquiring the Securities as principal
for its own account for  investment  purposes only and not with a view to or for
distributing or reselling the Securities or any part thereof.  It has no present
intention of selling or granting any participation in, or otherwise distributing
the Securities.  It is not party to any agreement or arrangement with any person
to distribute any of the Securities.

(c)      PURCHASER  STATUS.  At the time the Purchaser was offered the  Securi-
ties, it was, and at the date hereof it is, an "Accredited  Investor" as defined
in Rule 501(a)  under the  Securities  Act.  The  Purchaser  has not been formed
solely for the purpose of acquiring the Securities.

(d) EXPERIENCE OF SUCH PURCHASER.  The Purchaser,  either alone or together with
its  representatives,  has such  knowledge,  sophistication  and  experience  in
business and financial  matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities,  and has so evaluated the
merits and risks of such investment.

(e) ABILITY OF SUCH PURCHASER TO BEAR RISK OF INVESTMENT.  The Purchaser is able
to bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.

(f) ACCESS TO INFORMATION.  The Purchaser  acknowledges that it has reviewed the
Disclosure  Materials  and has been  afforded  (i) the  opportunity  to ask such
questions  as  it  has  deemed  necessary  of,  and  to  receive  answers  from,
representatives  of the  Company  concerning  the  terms and  conditions  of the
offering  of the  Securities  and the  merits  and  risks  of  investing  in the
Securities;  (ii) access to  information  about the  Company  and the  Company's
financial condition, results of operations, business, properties, management and
prospects  sufficient  to enable it to evaluate  its  investment;  and (iii) the
opportunity to obtain such additional information which the Company possesses or
can acquire without  unreasonable effort or expense

                                      -7-

<PAGE>

that is necessary to make an informed  investment  decision  with respect to the
investment.  Neither such inquiries nor any other investigation  conducted by or
on behalf of the Purchaser or its representatives or counsel shall modify, amend
or affect the Purchaser's right to rely on the truth,  accuracy and completeness
of the  Disclosure  Materials and the Company's  representations  and warranties
contained in the Transaction Documents.

(g) GENERAL  SOLICITATION.  The Purchaser is not  purchasing the Securities as a
result  of  or  subsequent  to  any  advertisement,  article,  notice  or  other
communication  regarding the Securities  published in any  newspaper,  magazine,
website or similar media or broadcast  over  television or radio or presented at
any seminar or any other general solicitation or general advertisement.

(h) RELIANCE.  The Purchaser understands and acknowledges that (i) the Preferred
Shares and Warrants are being offered and sold to it without  registration under
the Securities Act in a private  placement that is exempt from the  registration
provisions of the Securities Act and (ii) the  availability  of such  exemption,
depends in part on, and the Company will rely upon the accuracy and truthfulness
of, the foregoing  representations  of the  Purchaser  and the Purchaser  hereby
consents to such reliance.

(i) CERTAIN FEES. The Purchaser has not engaged or contracted  with, and owes no
fees or commissions  to, any broker,  financial  advisor or consultant,  finder,
placement agent,  investment banker,  bank or other person,  with respect to the
transactions contemplated by this Agreement.

4.       ADDITIONAL AGREEMENTS.

4.1.     NO OTHER  REPRESENTATIONS.  The Company  acknowledges  and agrees that
the Purchaser  does not make or has not made any  representations  or warranties
with  respect  to  the  transactions   contemplated   hereby  other  than  those
specifically set forth in Section 3.2.

4.2.     TRANSFER RESTRICTIONS.

                  (a) The  Securities  may only be  disposed  of  pursuant to an
effective  registration  statement  under the Securities  Act, to the Company or
pursuant to an available  exemption from or in a transaction  not subject to the
registration  requirements  of the  Securities  Act, and in compliance  with any
applicable federal and state securities laws. In connection with any transfer of
Securities other than pursuant to an effective  registration statement or to the
Company,  except as  otherwise  set forth  herein,  the  Company may require the
transferor  thereof to provide to the Company an opinion of counsel  selected by
the transferor and reasonably  acceptable to the Company, the form and substance
of which opinion shall be reasonably  satisfactory to the Company, to the effect
that such  transfer  does not require  registration  under the  Securities  Act.
Notwithstanding the foregoing, the Company, without requiring a legal opinion as
described in the immediately  preceding sentence,  hereby consents to and agrees
to  register on the books of the  Company  and with any  transfer  agent for the
securities  of the  Company  any  transfer of  Securities  by a Purchaser  to an
Affiliate of such  Purchaser or to one or more funds or managed  accounts  under
common  management  with  such  Purchaser,  and  any  transfer  among  any  such
Affiliates  or one or more  funds or  managed  accounts,  provided  (i) that

                                      -8-

<PAGE>

the  transferee  certifies  to the Company that it is an  "accredited  investor"
within the  meaning of Rule 501(a)  under the  Securities  Act,  (ii) that it is
acquiring  the  Securities  solely  for  investment  purposes  (subject  to  the
qualifications  hereof),  and  (iii)  that any such  transferee  shall  agree in
writing to be bound by the terms of this Agreement and shall have the rights and
obligations of the Purchaser  under this Agreement and the  Registration  Rights
Agreement.

                  (b) The Purchaser understands and agrees that the certificates
for the  Preferred  Shares  and the  Underlying  Common  Shares  shall  bear the
following  legend,  or a  similar  legend  to the same  effect,  until  (i) such
Underlying Common Shares shall have been registered under the Securities Act and
for the Underlying Common Shares effectively been disposed of in accordance with
a  registration  statement  that has  been  declared  effective;  or (ii) in the
opinion of counsel for the Company  such  Underlying  Common  Shares be may sold
without  registration  under the Securities Act or any applicable  "Blue Sky" or
state securities laws:

                  NEITHER THESE  SECURITIES NOR THE SECURITIES  INTO WHICH THESE
                  SECURITIES   ARE   [CONVERTIBLE]   [EXERCISABLE]   HAVE   BEEN
                  REGISTERED WITH THE SECURITIES AND EXCHANGE  COMMISSION OR THE
                  SECURITIES  COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN
                  EXEMPTION FROM REGISTRATION  UNDER THE SECURITIES ACT OF 1933,
                  AS AMENDED (THE "SECURITIES ACT"), AND,  ACCORDINGLY,  MAY NOT
                  BE  OFFERED  OR  SOLD   EXCEPT   PURSUANT   TO  AN   EFFECTIVE
                  REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
                  AN AVAILABLE  EXEMPTION  FROM, OR IN A TRANSACTION NOT SUBJECT
                  TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
                  ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

The Company may not make any notation on its records or give instructions to any
transfer  agent of the Company  which enlarge the  restrictions  of transfer set
forth in this Section.  The Purchaser will comply with the  prospectus  delivery
requirements  of the Securities Act as applicable to it in connection with sales
of Registrable  Securities  (as defined in the  Registration  Rights  Agreement)
pursuant to an Underlying Shares Registration Statement.

4.3.  ACKNOWLEDGMENT OF DILUTION.  The Company acknowledges that the issuance of
the Underlying  Common Shares will result in dilution of the outstanding  shares
of  Common  Stock,  which  dilution  may be  substantial  under  certain  market
conditions.  The  Company  further  acknowledges  that its  obligation  to issue
Underlying  Common  Shares  is  unconditional  and  absolute,   subject  to  the
limitations  set forth herein in the  Certificate  or pursuant to the  Warrants,
regardless of the effect of any such dilution.

4.4.  FURNISHING OF  INFORMATION.  As long as the Purchaser owns any Securities,
the Company  covenants to file timely (or obtain  extensions in respect  thereof
and file within the  applicable  extension  period)  all reports  required to be
filed by the Company after the date hereof

                                      -9-

<PAGE>

pursuant to the Exchange Act. So long as the Purchaser owns any  Securities,  if
the Company is not  required  to file  reports  pursuant  to such laws,  it will
prepare and furnish to the Purchaser  and make publicly  available in accordance
with Rule 144(c)  promulgated  under the Securities  Act such  information as is
required for the  Purchaser to sell the  Securities  under Rule 144  promulgated
under the Securities Act. The Company  further  covenants that it will take such
further action as any holder of Securities may  reasonably  request,  all to the
extent  required  from time to time to  enable  such  Person to sell  Underlying
Common  Shares  without   registration  under  the  Securities  Act  within  the
limitation  of the  exemptions  provided  by  Rule  144  promulgated  under  the
Securities Act,  including the legal opinion  referenced  above in this Section.
Upon the request of any such Person,  the Company shall deliver to such Person a
written certification of a duly authorized officer as to whether it has complied
with such requirements.

4.5.  INTEGRATION.  The  Company  shall not,  and shall use its best  efforts to
ensure that, no Affiliate  shall,  sell, offer for sale or solicit offers to buy
or  otherwise  negotiate  in respect of any security (as defined in Section 3 of
the  Securities  Act)  that  would be  integrated  with the offer or sale of the
Securities in a manner that would require the registration  under the Securities
Act of the sale of the  Preferred  Shares and the  Warrants to the  Purchaser or
that would be integrated with the offer or sale of the Preferred  Shares and the
Warrants  for  purposes  of the  rules and  regulations  of the  American  Stock
Exchange.

4.6.  INCREASE IN AUTHORIZED  SHARES.  If on any date the Company would be, if a
notice of  conversion  or exercise  (as the case may be) were to be delivered on
such date,  precluded  from issuing the number of  Underlying  Common  Shares as
would  then be  issuable  upon a  conversion  in full of the  Convertible  Note,
Callable  Warrant  and  Common  Warrant  (the  "Required  Minimum")  due  to the
unavailability  of a sufficient  number of  authorized  but unissued or reserved
Common Stock,  then the Board of Directors of the Company shall,  subject to any
required SEC  approval,  promptly  (and in any case,  within sixty (60) Business
Days from such date) prepare and mail to the  stockholders  of the Company proxy
materials  requesting  authorization  to  amend  the  Company's  certificate  of
incorporation to increase the number of shares of Common Stock which the Company
is  authorized  to issue to at least  such  number of  shares  as is  reasonably
adequate to enable the Company to comply with its issuance, conversion, exercise
and  reservation  of  shares  obligations  as set forth in this  Agreement,  the
Certificate and the Warrants. In connection  therewith,  the Company shall cause
its  Board  of  Directors  to (a)  adopt  proper  resolutions  authorizing  such
increase,  (b)  recommend to and  otherwise use its best efforts to promptly and
duly  obtain  stockholder  approval  to carry out such  resolutions  (and hold a
special  meeting of the  stockholders  no later than the earlier to occur of the
sixtieth  (60th) day after  delivery  of the proxy  materials  relating  to such
meeting and the ninetieth  (90th) day after request by a holder of Securities to
issue the  number of  Underlying  Common  Shares  in  accordance  with the terms
hereof) and (c) within five (5)  Business  Days of  obtaining  such  stockholder
authorization  and compliance with any applicable SEC rules, file an appropriate
amendment  to the  Company's  certificate  of  incorporation  to  evidence  such
increase.

4.7.     RESERVATION AND LISTING OF UNDERLYING COMMON SHARES.

                  (a) The Company shall (i) in the time and manner required,  if
so required,  by Nasdaq and such other national securities exchange or market or
trading  or  quotation  facility  on

                                      -10-

<PAGE>

which the Common Stock is then listed for trading,  prepare and file with Nasdaq
(and such other national  securities  exchange or market or trading or quotation
facility  on which the Common  Stock is then listed for  trading) an  additional
shares listing application  covering a number of shares of Common Stock which is
not less than the Required  Minimum as of the Closing Date,  (ii) take all steps
necessary to cause such shares of Common Stock to be approved for listing in the
Nasdaq Bulletin Board (as well as on any such other national securities exchange
or market or trading or  quotation  facility  on which the Common  Stock is then
listed) as soon as  possible  thereafter,  and (iii)  provide  to the  Purchaser
evidence of such listing or quotation, to the extent applicable, and the Company
shall, to the extent it is subject to a listing agreement,  maintain the listing
of its Common Stock thereon.

                  (b) The Company  shall  maintain a reserve of shares of Common
Stock for issuance upon conversion in full of the Convertible  Note and exercise
in full of the  Callable  Warrant  and Common  Warrant in  accordance  with this
Agreement, the Certificate and the Warrants, respectively, in such amount as may
be required to fulfill its obligations in full under the Transaction Documents.

4.8.  CONVERSION  AND  EXERCISE  PROCEDURES.  The Notice of  Exercise  under the
Convertible  Note and the Warrants set forth the totality of the procedures with
respect to the conversion of the Convertible  Note and exercise of the Warrants,
including the  information and  instructions  as may be reasonably  necessary to
enable the Purchaser to convert the  Convertible  Note and exercise its Warrants
as contemplated in the Convertible Note and the Warrants (as applicable).

4.9. NOTICE OF BREACHES. Each of the Company and the Purchaser shall give prompt
written notice to the other of any breach by it of any representation,  warranty
or other agreement contained in any Transaction  Document, as well as any events
or occurrences arising after the date hereof which would reasonably be likely to
cause any  representation  or warranty or other  agreement of such party, as the
case may be,  contained  therein to be  incorrect  or breached as of the Closing
Date. However, no disclosure by a party pursuant to this Section shall be deemed
to cure any breach of any representation,  warranty or other agreement contained
in any Transaction Document.

4.10.    CERTAIN SECURITIES LAWS ISSUES; PUBLICITY.

                  The Company shall: (i) on or immediately following the Closing
Date, issue a press release  reasonably  acceptable to the Purchaser  disclosing
the transactions  contemplated hereby, (ii) file with the Commission a Report on
Form 8-K or Form 10-Q (as applicable)  disclosing the transactions  contemplated
hereby within the required time periods therefor, and (iii) timely file with the
Commission  a Form D  promulgated  under the  Securities  Act as required  under
Regulation D promulgated  under the Securities Act and provide a copy thereof to
the Purchaser promptly after the filing thereof. The Company shall, no less than
two (2) Business Days prior to the filing of any disclosure  required by clauses
(ii) and (iii) above,  provide a copy thereof to the Purchaser.  The Company and
the  Purchaser  shall  consult with each other in issuing any press  releases or
otherwise making public statements or filings and other  communications with the
Commission  or any  regulatory  agency or stock market or trading  facility with
respect to

                                      -11-

<PAGE>

the  transactions  contemplated  hereby and  neither  party shall issue any such
press  release or  otherwise  make any such public  statement,  filings or other
communications  pertaining to the transactions  contemplated  hereby without the
prior written  consent of the other,  which  consent  shall not be  unreasonably
withheld or  delayed,  except  that no prior  consent  shall be required if such
disclosure is required by law or such consent can not  reasonably be expected to
be received  prior to the time  required  to  complete  such filing or make such
statement  in  accordance  with  such  applicable  law,  in which  such case the
disclosing  party shall provide the other party with prior notice of such public
statement,  filing or other  communication.  Notwithstanding the foregoing,  the
Company shall not publicly  disclose the name of the  Purchaser,  or include the
name of the  Purchaser  in any filing  with the  Commission,  or any  regulatory
agency,  trading  facility or stock market without the prior written  consent of
the Purchaser, except to the extent such disclosure is required by law, in which
case the Company shall provide the Purchaser with a copy of such  disclosure.  A
party shall be deemed to have consented or given a written consent  hereunder if
such party fails to give its  consent,  orally or in writing  where so required,
within two (2) business days of receipt of the request for consent.

4.11.  TRANSFER OF INTELLECTUAL  PROPERTY RIGHTS.  Except in connection with the
sale of all or substantially all of the assets of the Company, and except as set
forth in Section 4.16,  the Company  shall not sell or otherwise  dispose of any
Intellectual Property Rights or allow any of the Intellectual Property Rights to
become subject to any Liens, without the prior written consent of the Purchaser.
Notwithstanding the foregoing, the Company may alienate,  hypothecate,  encumber
and license the right to promote and use its Intellectual Property Rights in the
ordinary course of its business without the prior consent of the Purchaser.

4.12.    USE OF  PROCEEDS.  The  Company  shall use the net  proceeds  from the
sale of  Securities  hereunder  for working capital purposes.

4.13.  REIMBURSEMENT.  If the  Purchaser,  other  than by  reason  of its  gross
negligence  or willful  misconduct,  becomes  involved  in any  capacity  in any
action,  proceeding or investigation brought by or against any Person, including
stockholders  of  the  Company,  in  connection  with  or  as a  result  of  the
consummation  of the  transactions  contemplated by Transaction  Documents,  the
Company will reimburse the Purchaser for its reasonable legal and other expenses
(including  the  cost  of  any  investigation  and  preparation  and  travel  in
connection  therewith)  incurred in connection  therewith,  as such expenses are
incurred. In addition, other than with respect to any matter in which any of the
Purchaser is a named party,  the Company will pay the Purchaser the charges,  as
reasonably  determined  by the  Purchaser,  for  the  time  of any  officers  or
employees  of such  Purchaser  devoted to appearing  and  preparing to appear as
witnesses, assisting in preparation for hearings, trials or pretrial matters, or
otherwise with respect to inquiries,  hearings,  trials,  and other  proceedings
relating to the subject matter of this Agreement. The reimbursement  obligations
of the Company under this paragraph  shall be in addition to any liability which
the Company may otherwise have,  shall extend upon the same terms and conditions
to any  Affiliates  of the  Purchaser  who are  actually  named in such  action,
proceeding or  investigation,  and partners,  directors,  agents,  employees and
controlling  persons (if any), as the case may be, of the Purchaser and any such
Affiliate, and shall be binding upon and inure to the benefit of any successors,
assigns,  heirs and personal  representatives of the Company,  the Purchaser and
any such Affiliate and any such Person. The Company also agrees that neither the

                                      -12-

<PAGE>

Purchaser nor any such Affiliates,  partners,  directors,  agents,  employees or
controlling  persons  shall  have any  liability  to the  Company  or any Person
asserting  claims on behalf of or in right of the Company in connection  with or
as a result  of the  consummation  of the  Transaction  Documents  except to the
extent that any losses, claims, damages, liabilities or expenses incurred by the
Company result from the gross negligence or willful  misconduct of the Purchaser
or entity in connection with the transactions contemplated by this Agreement.

4.14.  STOCKHOLDERS RIGHTS PLAN. In the event that a stockholders rights plan is
adopted by the Company,  no claim will be made or enforced by the Company or any
other Person that the Purchaser is an "Acquiring  Person" under any such plan or
in any way could be deemed to trigger the  provisions  of such plan by virtue of
receiving Underlying Common Shares under the Transaction Documents.

4.15.  FEES. The Purchaser  shall have no obligation with respect to any fees or
with  respect to any claims  made by or on behalf of other  Persons  for fees or
commissions to any broker,  financial advisor or consultant,  finder,  placement
agent,  investment  banker  or  bank  that  may be due in  connection  with  the
transactions  contemplated  by this  Agreement.  The Company shall indemnify and
hold harmless the Purchaser,  its employees,  officers,  directors,  agents, and
partners,  and its respective  Affiliates,  from and against all claims, losses,
damages,  costs  (including  the costs of preparation  and attorney's  fees) and
expenses  suffered in respect of any such claimed or existing fees, as such fees
and expenses are incurred.

4.16.    ADDITIONAL SECURITY INTERESTS.

                  The Company covenants that it will not create,  incur,  assume
or permit any mortgage,  pledge,  lien,  security interest or other preferential
arrangement,  charge or  encumbrance  of any nature upon or with  respect to the
assets of the Company or the Subsidiaries,  except for asset secured instruments
such as operating lines of credit secured by receivables and inventory or senior
term debt secured by the Company's  assets and all security  interests and other
liens granted  pursuant to any lease  financing  arrangements  undertaken by the
Company in the ordinary course of business.

4.17.    REGISTRATION  RIGHTS  AGREEMENT.  The Company shall perform all of its
obligations  under the Registration Rights Agreement in a timely fashion.

5.       CONDITIONS TO CLOSING.

5.1.  CONDITIONS TO PURCHASER'S  OBLIGATIONS AT THE CLOSINGS.  The obligation of
the  Purchaser  to  consummate  the  transactions   contemplated  herein  to  be
consummated on the Closing Date is subject to the  satisfaction,  on or prior to
the Closing Date of the conditions set forth below and applicable  thereto,  any
of which may be waived in writing by the Purchaser:

(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF OBLIGATIONS. Each of the
representations and warranties of the Company contained herein shall be true and
correct,  in all material  respects,  on and as of the Closing Date. The Company
shall have performed and complied, in all material respects,  with the covenants
and provisions of this Agreement required to be performed or complied with by it
at or prior to the Closing Date.

                                      -13-

<PAGE>

(b)  LEGAL  INVESTMENT.  On the  Closing  Date,  the  sale and  issuance  of the
Convertible  Note,  the  Warrants and the  proposed  issuance of the  Underlying
Common Shares shall be legally  permitted by all laws and  regulations  to which
Purchaser and the Company are subject.

(c)      CORPORATE DOCUMENTS.  The  Company  shall have  delivered  to Purchaser
or its counsel,  copies of all  corporate  documents of the Company as Purchaser
shall reasonably request.

(d)      RESERVATION OF UNDERLYING  COMMON SHARES. The Underlying  Common Shares
issuable  upon  conversion  of the  Convertible  Note  and the  exercise  of the
Warrants shall have been duly authorized and reserved for issuance.

(e) PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in connection
with  the  transactions  contemplated  at the  Closings  and all  documents  and
instruments  incident to such transactions  shall be reasonably  satisfactory in
substance and form to the  Purchaser and its counsel,  and the Purchaser and its
counsel shall have received all such counterpart originals or certified or other
copies of such documents as they may reasonably request.

(f) DELIVERY OF DOCUMENTS AT THE CLOSING.  The Company  shall have  executed and
delivered to the Purchaser  the  following  documents on or prior to the Closing
Date each of which shall be in a form satisfactory to the Purchaser:

(i)      the Registration Rights Agreement;

(ii)     the Convertible Note;

(iii)    the Callable Warrant;

(iv)     the Common Warrant;

(v)  SECRETARY'S  CERTIFICATE.  A  Certificate  of the  Secretary of the Company
attaching (A) the Certificate of  Incorporation  of the Company in effect at the
Closing,  (B) the Bylaws of the Company in effect at the Closing,  (C) copies of
resolutions by the Board of Directors  authorizing and approving this Agreement,
the issuance  and delivery of the  Convertible  Note and the  Warrants;  and (D)
certifying as to the  incumbency of the officers  entering into this  Agreement,
the Related Agreements and any other documents contemplated by this Agreement;

(vi)     ADDITIONAL  DOCUMENTS.  The other  agreements,  instruments  and  docu-
ments  referred  to  in  this  Article  5  hereof  and  such  other  agreements,
instruments and documents as the Purchaser or its counsel,  including an opinion
of the Company's counsel, may reasonably request;

5.2. CONDITIONS TO OBLIGATIONS OF THE COMPANY.  The obligation of the Company to
consummate  the  transactions  contemplated  herein to be on the Closing Date is
subject to the

                                      -14-

<PAGE>

satisfaction, on or prior to the Closing Date, of the conditions set forth below
and expressly  applicable thereto,  any of which may be waived in writing by the
Company:

(a)  REPRESENTATIONS  AND  WARRANTIES  TRUE.  Each  of the  representations  and
warranties of the Purchaser contained herein shall be true and correct on and as
of the Closing Date.  The Purchaser  shall have  performed and complied with the
covenants and provisions of this Agreement  required to be performed or complied
with by it at or prior to the Closing Date.

(b)      DELIVERIES  BY PURCHASER  TO THE COMPANY AT THE  CLOSING.  At the Clos-
ing,  Purchaser  shall  deliver,  or cause to be  delivered,  to the Company the
following:

(i)      an executed Registration Rights Agreement;

(ii)     PURCHASE  PRICE.  Immediately  available  funds in the aggregate amount
of Four Hundred Fifty Thousand  Dollars  ($450,000) by wire transfer as provided
in Section 1.1 hereof;

(iii)  ADDITIONAL  DOCUMENTS.  The other  agreements,  instruments and documents
referred  to in this  Section  5.2 and such other  agreements,  instruments  and
documents as the Company or its counsel may reasonably request.

6.       MISCELLANEOUS.

6.1. FEES AND EXPENSES. Except as otherwise set forth in the Registration Rights
Agreement, each party shall pay the fees and expenses of its advisers,  counsel,
accountants and other experts,  if any, and all other expenses  incurred by such
party  incident  to  the  negotiation,   preparation,  execution,  delivery  and
performance  of this  Agreement,  except that the Company shall pay  Purchaser's
legal expenses incurred with respect to the transactions  contemplated herein in
an amount equal to Seven Thousand Four Hundred and Ninety  ($7,490.00)  Dollars.
The Company  shall pay all stamp and other taxes and duties levied in connection
with the issuance of the Securities.

6.2. ENTIRE AGREEMENT;  AMENDMENTS. The Transaction Documents, together with the
Exhibits and Schedules  thereto contain the entire  understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

6.3. NOTICES. Any and all notices or other communications or deliveries required
or  permitted to be provided  hereunder  shall be in writing and shall be deemed
given and  effective  on the earliest of (i) the date of  transmission,  if such
notice or  communication  is delivered via facsimile at the facsimile  telephone
number specified in this Section prior to 2:00 p.m. (Pacific Standard Time) on a
Business  Day,  (ii) the  Business Day after the date of  transmission,  if such
notice or  communication  is delivered via facsimile at the facsimile  telephone
number specified in this Agreement later than 2:00 p.m.  (Pacific Standard Time)
on any date and earlier than 11:59 p.m.  (Pacific  Standard  Time) on such date,
(iii) the  Business Day  following  the date of mailing,  if sent by  nationally
recognized  overnight courier service, or (iv) if sent other than by the

                                      -15-

<PAGE>

methods set forth in (i)-(iii) of this Section 4.3,  upon actual  receipt by the
party to whom such notice is required to be given.  The address for such notices
and communications shall be as follows:

         If to the Company:                 Accesspoint Corporation
                                            38 Executive Park, Suite 350
                                            Irvine, California
                                            92614
                                            U.S.A.

         With copies to:                    Floratos, Loll & Devine
                                            18831 Von Karman Avenue, Suite 225
                                            Irvine, California 92612
                                            Attn:  Robert A. Loll, Esq.
                                            Tel:  (949) 553-1910
                                            Fax:  (949) 553-0750

         If to the Purchaser:               RoyCap, Inc.
                                            4100 Yonge Street, Suite 504
                                            Toronto, Ontario M2P 2G2
                                            Attn:  Steven Rider
                                            Tel:  (416)-266-9921
                                            Fax:  (416) 221-1253

         With copies to:                    Fogler, Rubinoff, LLP
                                            Suite 4400 Royal Trust Tower
                                            Toronto Dominion Centre
                                            Toronto, Ontario M5K 1G8
                                            Attn:  Michael Slan
                                            Tel:  (416) 941-8857
                                            Fax:  (416) 941-8852

or such other  address as may be designated  in writing  hereafter,  in the same
manner, by such Person.

6.4.  AMENDMENTS;  WAIVERS.  No  provision  of this  Agreement  may be waived or
amended except in a written instrument  signed, in the case of an amendment,  by
both the Company  and the  Purchaser  or, in the case of a waiver,  by the party
against whom enforcement of any such waiver is sought.  No waiver of any default
with respect to any provision,  condition or requirement of this Agreement shall
be  deemed  to be a  continuing  waiver  in the  future or a waiver of any other
provision,  condition or requirement  hereof, nor shall any delay or omission of
either party to exercise any right  hereunder in any manner  impair the exercise
of any such right accruing to it thereafter.

6.5.     HEADINGS.  The headings  herein are for  convenience  only, do not con-
stitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.

                                      -16-

<PAGE>

6.6.  SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon and inure to
the benefit of the parties  and their  successors  and  permitted  assigns.  The
Company may not assign this  Agreement  or any rights or  obligations  hereunder
without  the prior  written  consent  of the  Purchaser.  Except as set forth in
Section 4.2(a), the Purchaser may not assign this Agreement or any of the rights
or obligations hereunder without the consent of the Company.

6.7.     NO  THIRD-PARTY  BENEFICIARIES.  This  Agreement  is intended  for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person.

6.8.  GOVERNING  LAW;  JURISDICTION.  This  Agreement  shall be  governed in all
respects by the laws of the State of California  without regard to the conflicts
of laws  principles of any  jurisdiction.  The Company and the Purchaser  hereby
irrevocably submit to the exclusive jurisdiction of the state and federal courts
sitting in the county of Orange,  State of California,  the  adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or  discussed  herein,  and hereby  irrevocably  waive,  and agree not to
assert in any suit,  action or  proceeding,  any claim that it is not personally
subject to the  jurisdiction  of any such  court,  or that such suit,  action or
proceeding is improper. Each of the Company and the Purchaser hereby irrevocably
waives  personal  service of process and consents to the process being served in
any such suit,  action or  proceeding  by  receiving a copy  thereof sent to the
Company at the  address in effect for  notices to it under this  instrument  and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.

6.9.     SURVIVAL.  The truth and accuracy as of the Closing Date of the  repre-
sentations,  warranties, agreements and covenants contained herein shall survive
for a period of two (2) years after the Closing Date.  The Company shall have no
duty  to  update  the  representations,   warranties,  agreements  or  covenants
contained herein.

6.10. EXECUTION. This Agreement may be executed in two or more counterparts, all
of which when taken  together shall be considered one and the same agreement and
shall  become  effective  when  counterparts  have been signed by each party and
delivered to the other  party,  it being  understood  that both parties need not
sign the same  counterpart.  In the event that any  signature  is  delivered  by
facsimile  transmission,  such  signature  shall  create  a  valid  and  binding
obligation  of the  party  executing  (or on  whose  behalf  such  signature  is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.

6.11. SEVERABILITY.  In case any one or more of the provisions of this Agreement
shall  be  invalid  or   unenforceable   in  any   respect,   the  validity  and
enforceability of the remaining terms and provisions of this Agreement shall not
in any way be affected or impaired thereby and the parties will attempt to agree
upon a valid and enforceable  provision  which shall be a reasonable  substitute
therefor,  and upon so agreeing,  shall incorporate such substitute provision in
this Agreement.

6.12.  REMEDIES.  In addition to being entitled to exercise all rights  provided
herein or granted by law,  including  recovery of damages the Purchaser  will be
entitled to specific

                                      -17-

<PAGE>

performance of the obligations of the Company under the  Transaction  Documents.
Each of the Company and the  Purchaser  agree that  monetary  damages may not be
adequate  compensation  for any loss  incurred  by reason  of any  breach of its
obligations  described in the  foregoing  sentence and hereby agrees to waive in
any action for specific  performance  of any such  obligation the defense that a
remedy at law would be adequate.

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories dated as of the date first indicated above.

                              ACCESSPOINT CORPORATION

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

                              ROYCAP INC.

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

                                      -18-

<PAGE>

                                 SCHEDULE 3.1(G)
                             LITIGATION; PROCEEDINGS

TASQ TECHNOLOGY, INC., A CALIFORNIA CORPORATION V. PROCESSING SOURCE INTERNA-
TIONAL, INC., A CALIFORNIA CORPORATION; ALFRED URCUYO; AND DOES ONE THROUGH TEN,
INCLUSIVE  Filed June 16, 2000, Superior Court of California, County of Placer,
as case number SCV10185.

                                      -19-

<PAGE>

                                 SCHEDULE 3.1(Q)
                                      TITLE

<PAGE>

                                    EXHIBIT A

                          CERTIFICATE OF INCORPORATION

<PAGE>

                                    EXHIBIT B

                                CONVERTIBLE NOTE

<PAGE>

                                    EXHIBIT C

                                CALLABLE WARRANT

<PAGE>

                                    EXHIBIT D

                                CALLABLE WARRANT

<PAGE>

                          SECURITIES PURCHASE AGREEMENT

                                 BY AND BETWEEN

                             ACCESSPOINT CORPORATION
                                       AND

                                   ROYCAP INC.

                                      DATED

                                OCTOBER ___, 2000

<PAGE>
                                TABLE OF CONTENTS

                                                                         PAGE

1.    SALE AND PURCHASE.....................................................1
   1.1.  SALE AND PURCHASE..................................................1
   ----  -----------------
   1.2.  CERTAIN TERMS......................................................1
   ----  -------------
2.    CLOSING, DELIVERY AND PAYMENT.........................................2
   2.1.  CLOSING............................................................2
   ----  -------
   2.2.  DELIVERY; PAYMENT..................................................2
   ----  -----------------
3.    REPRESENTATIONS AND WARRANTIES........................................2
   3.1.  Representations and Warranties of the Company......................2
      (A)   ORGANIZATION AND QUALIFICATION..................................2
      ---   ------------------------------
      (B)   AUTHORIZATION; ENFORCEMENT......................................2
      ---   --------------------------
      (C)   CAPITALIZATION..................................................3
      ---   --------------
      (D)   ISSUANCE OF THE SECURITIES......................................3
      ---   --------------------------
      (E)   NO CONFLICTS....................................................3
      ---   ------------
      (F)   FILINGS, CONSENTS AND APPROVALS.................................4
      ---   -------------------------------
      (G)   LITIGATION; PROCEEDINGS.........................................4
      ---   -----------------------
      (H)   NO DEFAULT OR VIOLATION.........................................4
      ---   -----------------------
      (I)   EXEMPTION FROM REGISTRATION.....................................4
      ---   ---------------------------
      (J)   SEC REPORTS; FINANCIAL STATEMENTS...............................5
      ---   ---------------------------------
      (K)   INVESTMENT COMPANY..............................................5
      ---   ------------------
      (L)   CERTAIN FEES.  Except for fees paid to David Jackson or any
            affiliate thereof, or as otherwise
      ---   ------------
      disclosed by the Company to the Purchaser, n..........................5
      (M)   FORM S-3 ELIGIBILITY............................................6
      ---   --------------------
      (N)   LISTING AND MAINTENANCE REQUIREMENTS............................6
      ---   ------------------------------------
      (O)   PATENTS AND TRADEMARKS..........................................6
      ---   ----------------------
      (P)   REGULATORY PERMITS..............................................6
      ---   ------------------
      (Q)   TITLE...........................................................6
      ---   -----
      (R)   DISCLOSURE......................................................6
      ---   ----------
   3.2.  REPRESENTATIONS AND WARRANTIES OF THE PURCHASER....................7
   ----  -----------------------------------------------
      (A)   ORGANIZATION; AUTHORITY.........................................7
      ---   -----------------------
      (B)   INVESTMENT INTENT...............................................7
      ---   -----------------
      (C)   PURCHASER STATUS................................................7
      ---   ----------------
      (D)   EXPERIENCE OF SUCH PURCHASER....................................7
      ---   ----------------------------
      (E)   ABILITY OF SUCH PURCHASER TO BEAR RISK OF INVESTMENT............7
      ---   ----------------------------------------------------
      (F)   ACCESS TO INFORMATION...........................................7
      ---   ---------------------
      (G)   GENERAL SOLICITATION............................................8
      ---   --------------------
      (H)   RELIANCE........................................................8
      ---   --------
      (I)   CERTAIN FEES....................................................8
      ---   ------------
4.    ADDITIONAL AGREEMENTS.................................................8
   4.1.  NO OTHER REPRESENTATIONS.  The Company acknowledges and agrees that
         the Purchaser does not make or has
   ----  ------------------------
   not made any representations or warranties with respect to the trans-
   actions contemplated hereby other that those specifically set forth in
   Section 3.2..............................................................8
   4.2.  TRANSFER RESTRICTIONS...............................................8
   ----  ---------------------

-i-

<PAGE>

   4.3.  ACKNOWLEDGMENT OF DILUTION..........................................9
   ----  --------------------------
   4.4.  FURNISHING OF INFORMATION...........................................9
   ----  -------------------------
   4.5.  INTEGRATION........................................................10
   ----  -----------
   4.6.  INCREASE IN AUTHORIZED SHARES......................................10
   ----  -----------------------------
   4.7.  RESERVATION AND LISTING OF UNDERLYING COMMON SHARES................10
   ----  ---------------------------------------------------
   4.8.  CONVERSION AND EXERCISE PROCEDURES.................................11
   ----  ----------------------------------
   4.9.  NOTICE OF BREACHES.................................................11
   ----  ------------------
   4.10.    CERTAIN SECURITIES LAWS ISSUES; PUBLICITY.......................11
   -----    -----------------------------------------
   4.11.    TRANSFER OF INTELLECTUAL PROPERTY RIGHTS........................12
   -----    ----------------------------------------
   4.12.    USE OF PROCEEDS.................................................12
   -----    ---------------
   4.13.    REIMBURSEMENT...................................................12
   -----    -------------
   4.14.    STOCKHOLDERS RIGHTS PLAN........................................13
   -----    ------------------------
   4.15.    FEES............................................................13
   -----    ----
   4.16.    ADDITIONAL SECURITY INTERESTS...................................13
   -----    -----------------------------
   4.17.    REGISTRATION RIGHTS AGREEMENT.  The Company shall perform all
            of its obligations under the
   -----    -----------------------------
   Registration Rights Agreement in a timely fashion........................13
5.    CONDITIONS TO CLOSING.................................................13
   5.1.  CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSINGS..............13
   ----  -----------------------------------------------------
      (A)   REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF OBLIGATIONS.13
      ---   ---------------------------------------------------------------
      (B)   LEGAL INVESTMENT................................................14
      ---   ----------------
      (C)   CORPORATE DOCUMENTS.............................................14
      ---   -------------------
      (D)   RESERVATION OF UNDERLYING COMMON SHARES.........................14
      ---   ---------------------------------------
      (E)   PROCEEDINGS AND DOCUMENTS.......................................14
      ---   -------------------------
      (F)   DELIVERY OF DOCUMENTS AT THE CLOSING............................14
      ---   ------------------------------------
   5.2.  CONDITIONS TO OBLIGATIONS OF THE COMPANY...........................14
   ----  ----------------------------------------
      (A)   REPRESENTATIONS AND WARRANTIES TRUE.............................15
      ---   -----------------------------------
      (B)   DELIVERIES BY PURCHASER TO THE COMPANY AT THE CLOSING...........15
      ---   -----------------------------------------------------
6.    MISCELLANEOUS.........................................................15
   6.1.  FEES AND EXPENSES..................................................15
   ----  -----------------
   6.2.  ENTIRE AGREEMENT; AMENDMENTS.......................................15
   ----  ----------------------------
   6.3.  NOTICES............................................................15
   ----  -------
   6.4.  AMENDMENTS; WAIVERS................................................16
   ----  -------------------
   6.5.  HEADINGS...........................................................16
   ----  --------
   6.6.  SUCCESSORS AND ASSIGNS.............................................17
   ----  ----------------------
   6.7.  NO THIRD-PARTY BENEFICIARIES.......................................17
   ----  ----------------------------
   6.8.  GOVERNING LAW; JURISDICTION........................................17
   ----  ---------------------------
   6.9.  SURVIVAL...........................................................17
   ----  --------
   6.10.    EXECUTION.......................................................17
   -----    ---------
   6.11.    SEVERABILITY....................................................17
   -----    ------------
   6.12.    REMEDIES........................................................17
   -----    --------

                                      -ii-

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