Document:

AGREEMENT TO TERMINATE
                             ----------------------

     This Agreement to Terminate ("Termination Agreement") dated this 6th day of
November,  2000  by  and  among  PACIFIC  TELCOM,  INC., an Illinois corporation
("Buyer"),  EASYTEL CANADA CORPORATION, ("Buyer"), a corporation organized under
the  laws  of  the  Province  of  Ontario  (the  "Corporation"),  and RICHARD C.
GOLDSTEIN,  being  the  duly  appointed  Sellers'  Representative of the Selling
Shareholders  ("Sellers"  or  "Selling  Shareholders").

                                   WITNESSETH

     WHEREAS,  the  Buyer,  the  Corporation  and  the Selling Shareholders have
entered into a Stock Purchase Agreement ("Agreement") whereby the Buyer acquired
100%  of  issued  and  outstanding  shares  of  common stock of the Corporation;

     WHEREAS,  the  Agreement  provides  for certain circumstances and events to
occur  regarding  Buyer's  shares  of  common stock, the non occurrence of which
gives  rise  to  Sellers'  right  to  terminate and unwind the Agreement and its
terms.

     WHEREAS,  it  is  mutually  acknowledged  by the parties that Buyer will be
unable  to fulfill said circumstances and events concerning its common shares of
stock,  to wit, that the common shares of Pacific TelCom, Inc., will be publicly
tradable  on  or  before  November  15,  2000;  and

     WHEREAS,  the  parties to the Agreement, pursuant to the exercise option of
the  Selling  Shareholders  to  deem  the Agreement terminated, do hereby act on
their  mutual  best  interests by the orderly and mutually agreeable termination
and  unwinding  of  said Agreement by the terms of this Termination Agreement as
set  forth  as  follows:

     1.   Acknowledgment of Rights. The parties acknowledge that it has been the
           --------------------------
          duty of the Buyer to complete the process of having its common  shares
          of stock  publicly  tradable  on or before  November  15,  2000.  That
          pursuant  to Section  4.1 of the  Agreement  regarding  Finality,  the
          Sellers  retained the option to terminate  the Agreement and to unwind
          and undo the subject transaction of the Agreement.

     2.   Exercise of Option.  Buyer and Sellers agree,  based upon the terms of
          --------------------
          Section 4.1 of the  Agreement,  that the exercise of the option of the
          Sellers to terminate the Agreement and to undo the subject transaction
          is duly made by the Sellers and has been communicated to the Buyer, as
          a  valid  exercise  of  the  option  to  terminate  set  forth  in the
          Agreement.

<PAGE>
     3.   Terms of Termination.
          --------------------

          3.1  Return  of  Selling   Shareholders   Shares.   Pursuant  to  this
               -------------------------------------------
               Termination  Agreement,  the Buyer  shall cause the return of the
               certificates representing the outstanding common shares purchased
               by the Buyer  described  in Section 3.2 of the  Agreement.  Buyer
               shall  direct the  Transfer  Agent of the Buyer to  forward  said
               shares in a manner consistent with this Termination Agreement.

          3.2  Return of Purchase Price.
               ---------------------------

               3.2.1No Return of Payment of Cash. Pursuant to Section 2.2 of the
                    ----------------------------
                    Agreement,  Buyer  has  previously  paid  to  Seller  in  US
                    dollars, the sum of One Hundred Thousand Dollars ($100,000).
                    The parties  acknowledge  that the  entirety of this sum has
                    been applied to the  expenses and costs of the  operation of
                    the Corporation,  in the ordinary course of business.  Buyer
                    and  Seller  agree  that  there  shall be no  return of this
                    portion of the  payment  pursuant  to  Section  2.2 and that
                    Buyer shall have no right to an accounting thereof.

               3.2.2Return of Payment of Common Stock.  Pursuant to the terms of
                    ----------------------------------
                    this Termination Agreement, the Selling Shareholders, by the
                    Sellers'  Representative,  shall  cause  the  return  of the
                    certificates representing Buyer's payment in common stock of
                    the Pacific  TelCom,  Inc., to the Buyer,  at the offices of
                    the  Secretary  of Buyer.  Payment  of  certificates  in the
                    amount of One Million Shares,  shall be duly endorsed by the
                    respective  Selling  Shareholder in a form acceptable to the
                    Buyer.

               3.3  Goods and Services  Tax Credit.  The Buyer shall be eligible
                    ------------------------------
                    to recover  from the  Sellers a pro rata  portion of any tax
                    refund  to the  Corporation  resulting  from the  Goods  and
                    Services Tax for its fiscal year ending  March 31, 2001,  if
                    any.

               3.4  Returning of Control Operations. On the Closing Date of this
                    ----------------------------------
                    Termination Agreement,  Buyer shall relinquish all corporate
                    control  of  the  Corporation  and  its  operations  to  the
                    Sellers.

<PAGE>
               3.5  Separation of Management.  From the Closing Date henceforth,
                    -------------------------
                    all officers and employees of the Corporation shall cease to
                    be employed in any capacity by the Buyer. Any officer of the
                    Corporation  serving on the Board of  Directors of the Buyer
                    shall execute a resignation effective as of the Closing Date
                    and Sellers shall deliver such resignations at Closing.

               3.6  Resulting Joint Venture. To the extent that Buyer has failed
                    -------------------------
                    to  capitalize  the   installation   of   telecommunications
                    switches in four new cities in Canada,  no  resulting  joint
                    venture shall  survive from the Closing of this  Termination
                    Agreement.  Sellers  shall be entitled to all revenues  from
                    the Corporation's operations from the Closing Date forward.

               3.7  Liabilities.  From the Closing  Date,  the Sellers  shall be
                    ------------
                    solely  responsible  for  the  liabilities  incurred  by the
                    Corporation.

               3.8  Conveyance of Title to  Properties.  AS of the Closing Date,
                    ----------------------------------
                    the Buyer hereby reconveys to the Corporation,  on behalf of
                    the  Sellers,  title  to  all  properties  conveyed  by  the
                    Agreement.

               3.9  Closing.  The parties shall meet at 1:00 p.m. on November 6,
                    --------
                    2000 at the  offices of the Buyer at Pacific  TelCom,  Inc.,
                    Fountain View Business  Park,  4270 S. Decatur  Blvd.,  Ste.
                    A-9, Las Vegas, NV 89103, to conduct the Closing hereunder.

     4.   Authorizations.  All  actions  undertaken  on the part of  Buyer,  the
          --------------
          Corporation   and  the  Selling   Shareholders   to  enter  into  this
          Termination  Agreement have been duly and fully authorized on the part
          of each party.

     5.   Closing Tax Returns.  All federal and Provincial tax returns  required
          --------------------
          to be filed as a result of this Termination Agreement shall be done so
          by the parties and each shall  cooperate to  effectuate  the same on a
          timely basis.

     6.   Mutual General  Release.  In consideration of the mutual covenants and
          ------------------------
          Agreements made hereunder, Buyer, the Corporation, the Sellers and the
          Shareholders'  Representative  on behalf of the Selling  Shareholders,
          and each of their shareholders,  directors, officers, representatives,
          attorneys and employees,  past,  present and future,  individually and
          collectively release each and every other party for any and all causes
          of actions,  claims,  demands,  and liabilities  each party has or now
          has, by reason of any matter or cause  whatsoever  arising  from or in
          any way connected to the Agreement or this Termination Agreement.

<PAGE>
     7.   General Provisions.
          -------------------

          7.1  Expenses.  Each party  hereto shall pay all of their own expenses
               --------
               related  to the  transactions  contemplated  by this  Termination
               Agreement,  including  the fees and expenses of their  respective
               counsels, accountants, transfer agents and financial advisers.

          7.2  Governing  Law.  The  interpretation  and  construction  of  this
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               Agreement  and all matters  relating  hereto shall be governed by
               the laws of the State of Illinois  relating to contracts made and
               to be performed in Illinois.

          7.3  Captions.  The article and section  captions  used herein are for
               --------
               reference  purposes  only,  and shall not in any way  affect  the
               meaning or interpretation of this Agreement.

          7.4  Publicity.  Prior to the Closing Date, none of the parties hereto
               ---------
               shall issue any press release or make any other  statement to the
               press or media relating to the Agreement or the matters contained
               therein.

          7.5  Notices. All notices,  requests, demands and other communications
               -------
               required or  permitted  hereunder  will be in writing and will be
               deemed to have been duly given when  delivered  by hand or by air
               express courier.

          If  to  the  Buyer:  Pacific  TelCom,  Inc.
                                4270  S.  Decatur  Blvd.,  Ste.  A-9
                                Las  Vegas,  NV  89103
          Attention:  Bill  J.  Angelos

          With  a  copy  to:    Kenneth  G.  Mason
                                General  Counsel
                                33  N.  LaSalle  St.,  Ste.  2131
                                Chicago,  IL  60602

          If to the Sellers to: Richard  C.  Goldstein
                                EasyTel  Canada
                                18  King  Street  East,  Ste.  1402
                                Toronto,  Ontario  M5C1C4
                                Canada

<PAGE>
          With  a  copy  to:    Barry  M.  Polisuk
                                Garfinkle,  Biderman
                                1  Adelaide  St.  East  #1401
                                Toronto,  ON  M5C2V9

          7.6  Entire   Agreement.    This   Agreement   contains   the   entire
               -----------------
               understanding  between and among the parties and  supersedes  any
               prior  understandings  and agreements  among them  respecting the
               subject matter of this Agreement.

          7.7  Savings  Clause.  If any  provision  of  this  Agreement,  or the
               ---------------
               application  of such  provision  to any  person or  circumstance,
               shall be held invalid,  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,  shall not be affected
               thereby.

     IN  WITNESS WHEREOF, this Agreement has been executed by the parties hereto
on  the  day  and  year  first  written  above.

PACIFIC  TELCOM,  INC.                    EASYTEL  CANADA  CORPORATION
an  Illinois  Corporation                 an  Ontario
Corporation

By:____________________________           By:______________________________
     Bill J. Angelos, President              Richard C.Goldstein, President

Selling  Shareholders

By:____________________________
     Richard  C.  Goldstein
     Sellers' RepresentativeSTOCK PURCHASE AGREEMENT
                            ------------------------

     THIS STOCK PURCHASE AGREEMENT ("Agreement") dated as of November 6, 2000 by
and  among  PACIFIC  TELCOM,  INC.,  a  corporation  organized under the laws of
Illinois,  PACIFIC  TELCOM [CANADA] INC., a corporation organized under the laws
of  the  Province  of  Ontario  (collectively referred to hereafter as "Buyer"),
EASYTEL  CANADA  CORPORATION,  a  corporation  organized  under  the laws of the
Province of Ontario (the "Corporation") and RICHARD C. GOLDSTEIN, being the duly
appointed  Sellers'  Representative  of  the  Selling Shareholders ("Sellers" or
"Shareholders"  or  "Selling  Shareholders").

                                   WITNESSETH
                                   ----------

     WHEREAS,  the  Selling  Shareholders  collectively  own  of  record  and
beneficially  one hundred percent (100%) of the issued and outstanding shares of
the  common  stock  of  EasyTel  Canada consisting of 6,315,000 shares of common
stock,  no  par  value  (the  "Shares");  and

     WHEREAS,  the Sellers own in addition to 6,315,000 common shares issued and
outstanding  on  November  3,  2000,  and the further amount of 2,599,850 common
shares  representing  such  shares  derived  from outstanding options for common
stock  exercised  and  Class  A  special  shares, nonvoting, converted to common
shares  pursuant  to the Articles of Corporation and by-laws of the Corporation;

     WHEREAS,  Pacific  TelCom  [Canada]  Inc.  is  a wholly owned subsidiary of
Pacific TelCom, Inc., and that the capital stock of Pacific TelCom [Canada] Inc.
is  comprised  of two classes of stock to wit, common shares of no par value and
Class  A  special  shares,  nonvoting,  convertible  to common shares of Pacific
TelCom,  Inc.  pursuant  to  the  Articles  of  Corporation  and  By-Laws of the
Corporation;  and

     WHEREAS,  it is the intention of the parties hereto that, upon consummation
of  the  purchase  and sale of the Shares pursuant to this Agreement, at Closing
effective  as  of the date hereof (the "Effective Date") Pacific TelCom [Canada]
Inc.  shall  own one hundred percent (100%) of all of the issued and outstanding
shares  of  common  stock  of  the  Corporation;  and

<PAGE>
     WHEREAS, Pacific TelCom, Inc. has agreed to be a party to this Agreement to
guarantee  the  obligations  of  Pacific  TelCom [Canada] Inc., its wholly owned
subsidiary.

     NOW,  THEREFORE,  IT  IS  AGREED:

Section  1.  Sale  and  Purchase.
             -------------------

     1.1  Sale of the Shares. Subject to the terms and conditions herein stated,
          --------------------
          the Selling  Shareholders agree to sell, assign,  transfer and deliver
          the shares to Pacific TelCom  [Canada] Inc. on the Effective Date, and
          Buyer  agrees to  purchase  the  outstanding  common  shares  from the
          Selling   Shareholders  on  the  Effective   Date.  The   certificates
          representing  the Shares  shall be duly  endorsed  to  Pacific  TelCom
          [Canada] Inc., or accompanied by Stock Powers and Assignment  Separate
          from Certificate, duly executed in favor of the Buyer, by the relevant
          Selling  Shareholders.  The Selling  Shareholders agree to cure at any
          time  any  deficiencies   with  respect  to  the  endorsement  of  the
          certificates  representing  the  shares or with  respect  to the Stock
          Power with Assignment Separate from Certificate, accompanying any such
          certificates.

Section  2.0  Purchase  Price.
         --------------------

     2.1  Payment.  In consideration of the transfer,  conveyance and assignment
          -------
          of the Shares, the Buyer shall pay to the Selling Shareholders the sum
          of Two Hundred Fifty Thousand  Dollars  ($250,000) and One Million One
          Hundred  Twenty-Five  Thousand  (1,125,000) duly authorized and issued
          Class A special  convertible  shares of Pacific TelCom  [Canada] Inc.,
          subject to adjustment as described herein, to be paid in the following
          manner.

     2.2  Payments  of Cash.  The Buyer  shall pay to the Sellers in the form of
          ------------------
          check or by wire transfer,  at the direction of the  Corporation,  the
          sum of Two Hundred Fifty Thousand US Dollars ($250,000) not later than
          December  15,  2000.  Buyer shall  exercise its best efforts to submit
          this sum prior to  December  15,  2000,  and  Sellers  agree to accept
          prepayments  in  amounts  less than this sum from  Buyer on a periodic
          basis prior to December 15, 2000, to be credited to the amount due the
          Sellers in cash.

<PAGE>
     2.3  Payment in Common  Stock.  Delivery  shall be made by the Buyer to the
          --------------------------
          Selling  Shareholders on the Effective Date of One Million One Hundred
          Twenty-Five Thousand (1,125,000) of Class A special convertible shares
          of authorized  stock of Pacific TelCom  [Canada] Inc.,  subject to the
          terms and conditions of Section 3.3, Section 4.1 and Section 4.2.

     2.4  Adjustment to Purchase Price.  That portion of the Purchase Price paid
          ------------------------------
          by Buyer to the  Selling  Shareholders  in Class A  special  shares of
          Buyer  is  subject  to  adjustment,   as  set  forth  in  Section  4.1
          "Finality".  It is the agreement of Buyer and Sellers that adjustments
          to the Purchase Price, pursuant to the provisions regarding "Finality"
          shall be such that the value received by Sellers from Buyer, after the
          conversion by the Sellers of the Class A special convertible shares of
          Pacific  TelCom  [Canada] Inc.  into common shares of Pacific  TelCom,
          Inc.,  shall be an amount  equal to Eleven  Million Two Hundred  Fifty
          Thousand Dollars ($11,250,000) as the aggregate value of common shares
          of Pacific TelCom,  Inc.,  after the net affect of, or pursuant to, an
          adjustment to the purchase price hereto.

     2.5  Separate  Agreements.  The Buyer's  Agreement herein is intended to be
          --------------------
          made with and effective  concerning each and every Selling Shareholder
          of the Corporation. In the event that it is necessary for the Buyer to
          have a separate  Agreement  with any such  Selling  Shareholder,  such
          separate  Agreement  shall  not be deemed a  separate  sale and such a
          separate  Agreement  shall not affect or act to construe an adjustment
          to the Purchase Price.

     2.6  No Prior Credits.  It is agreed by the parties that no monies advanced
          ------------------
          by the Buyer to the Sellers under any prior  transactions  or dealings
          shall comprise, or in any way be credited to the Purchase Price.

Section  3.0  Effective  Date;  Delivery.
              --------------------------

     3.1  Closing.  The Effective Date of this Agreement is November 6, 2000. On
          -------
          the Effective Date, the parties shall meet at 3:00 p.m. at the offices
          of Pacific TelCom,  Inc., 4270 S. Decatur Blvd.,  Ste. A-9, Las Vegas,
          NV 89103 and shall thereupon conduct the Closing of this Agreement and
          the transactions contemplated herein.

     3.2  Selling  Shareholders'  Delivery  of Shares.  On the  Effective  Date,
          -------------------------------------------
          Selling   Shareholders,   through   their  duly   appointed   Sellers'
          Representative, shall deliver to Pacific TelCom [Canada] Inc. endorsed
          Certificates or endorsed  Assignments  Separate from  Certificate with
          Stock Powers in the amount of 100% of the  Corporation's  Common Stock
          represented  by shares  constituting  6,315,000  authorized and issued
          common  shares of the  Corporation  outstanding  on October 31,  2000;
          625,000  common shares  representing  the exercise of 625,000  options
          from a total of 600,000  outstanding  options of the corporation;  and
          1,999,850  common shares  representing  540,500 Class A special shares
          converted from October 31, 2000 to the Effective  Date, for a total of
          8,939,850 aggregate common shares of the Corporation.

<PAGE>
     3.3  Procedures  to  Deliver  Buyer's  Shares.  Notwithstanding  any of the
          ----------------------------------------
          foregoing,  it is expressly agreed by the parties that the delivery by
          Buyer of 1,125,000  Class A special shares of Pacific TelCom  [Canada]
          Inc.  to  Sellers,  shall  be  paid  and  transferred  to the  Selling
          Shareholders pursuant to the following procedures:

          3.3.1Selling  Shareholders List. Selling Shareholders shall deliver to
               --------------------------
               the Buyer at the Effective Date a Final  Shareholders  List to be
               affixed to this  Agreement  as Exhibit A. Said list shall  state,
               for  every  Selling  Shareholder,   the  Shareholder's  name  and
               address,  the  number of shares  of the  Corporation  held on the
               Effective  Date,  and the  number  of  shares  of the Buyer to be
               received in exchange thereto. No fractional shares or script will
               be issued by Buyer.  It is  understood  by the  parties  that the
               aggregate number of shares to be paid to the Selling Shareholders
               at the Effective Date shall not exceed  1,125,000 Class A special
               shares of Pacific TelCom  [Canada] Inc.  regardless of the number
               of  shares  of  common  stock  of  the  Corporation   issued  and
               outstanding at the Effective Date.

          3.3.2Issuance of  Certificated  Ownership.  Subsequent to the Closing,
               -------------------------------------
               Selling   Shareholders,    individually,   shall   each   receive
               certificated  shares of their  representative pro rata allocation
               of  Buyer's  payment  in  stock,  by  delivery  by the  Buyer  of
               certificated  shares of Class A special  shares of Pacific TelCom
               [Canada] Inc.  convertible  to common  shares of Pacific  TelCom,
               Inc., an Illinois corporation.

Section  4.  Other  Agreements.
             -----------------

<PAGE>
     4.1  Finality.  The Effective  Date of this  transaction  shall be the date
          --------
          hereof,  however,  the  transaction  shall be  deemed  to be in escrow
          pending an event of  Finality,  as set forth in this  Section 4.1, and
          the Closing Date of this Agreement shall be deemed to be on such event
          of Finality. An event of Finality shall occur upon the occasion of one
          of the  following:  An Initial  Public  Offering  of common  shares of
          Pacific  TelCom,  Inc.;  the  common  shares of Pacific  TelCom,  Inc.
          becoming tradable on a public market; or November 15, 2001.

               On the occurrence of an Initial Public  Offering (IPO) of Pacific
          TelCom,  Inc.  common  shares on or before  November  15,  2001,  this
          Agreement  shall  be  deemed  closed  and  irreversible,  by  Sellers'
          election,  without adjustment, in the event that the Issue Price under
          an IPO of the common shares of Pacific TelCom,  Inc. shall not be less
          than $8.00 per share and not more than $12.00 per share.  If the Issue
          Price is at least $5.00 per share,  but less than $8.00 per share, the
          parties agree to adjust the Purchase  Price in favor of Sellers,  such
          that Pacific TelCom,  Inc. shall pay such further shares of its common
          stock to equal Eleven Million One Hundred Twenty-Five Thousand Dollars
          ($11,125,000)  value.  In the event  that no Initial  Public  Offering
          concerning  the common  shares of  Pacific  TelCom,  Inc.  occur on or
          before  November  15,  2001,  but that the  common  shares of  Pacific
          TelCom,  Inc. are publicly tradable on or before November 15, 2001, at
          a trading  price or Issue  Price of less than  $5.00  per  share,  the
          parties  agree that either the Buyer or Sellers  shall have the option
          to terminate and undo the subject transaction whereupon the Buyers and
          Sellers  will  conduct  all steps,  take all  actions  and execute all
          documents  necessary  to restore  Buyer and Sellers to their  original
          position  on the date  prior to the  Effective  Date.  However,  if no
          Initial Public Offering of the common shares of Pacific  TelCom,  Inc.
          has occurred on or before November 15, 2001 but that the common shares
          of Pacific  TelCom,  Inc. are publicly  tradable on or before November
          15, 2001 at a trading price or Issue Price of $5.00 or more per common
          share,  this  transaction  shall be deemed complete and  irreversible,
          subject to the  adjustments  set forth  herein.  For the  purposes  of
          determining trading price on the occurrence of this event of Finality,
          the  price  of a  common  share  of  Pacific  TelCom,  Inc.,  shall be
          determined by the weighted  average of such shares for the last ninety

<PAGE>
          days prior to  November  15,  2001.  For an event of  Finality to have
          occurred,  that 90 day weighted  average  shall be not less than $5.00
          per common share of Pacific  TelCom,  Inc.  common stock. In the event
          that the  common  shares of  Pacific  TelCom,  Inc.  have not been the
          subject of an Initial Public Offering and are not publicly tradable on
          November 15, 2001, the parties agree that the Sellers'  Representative
          will have the  option to deem the  transaction  terminated,  whereupon
          Buyer and  Sellers  agree to undo the subject  transaction  or, at the
          option of  Sellers'  Representative,  Sellers  shall have the right to
          deem the  transaction  finalized,  even in the event  that the  common
          shares of Pacific TelCom,  Inc. are not publicly  tradable on November
          15,  2001.  In  the  event  this   Agreement  is  terminated  and  the
          transaction  undone,  no  part  of  the  $250,000  Purchase  Price  is
          refundable.

     4.2  Conversion of Shares.
          ----------------------

          4.2.1Upon Finality. Upon an occurrence of an event of Finality, as set
               --------------
               forth in Section 4.1 above,  the 1,125,000 Class A special shares
               of Pacific TelCom  [Canada] Inc. shall be thereupon  converted to
               1,125,000  common  shares of Pacific  TelCom,  Inc.,  an Illinois
               corporation.  Upon such conversion,  Selling  shareholders  shall
               deliver to the Buyer all Class A special shares of Pacific TelCom
               [Canada] Inc. conveyed to Sellers as payment hereunder.  All such
               certificates  representing  payment in stock by Buyer to Sellers,
               shall be duly  endorsed in a form  satisfactory  to Buyer.  Buyer
               shall thereupon issue to the Selling Shareholders in certificated
               form, an amount of Pacific  TelCom,  Inc.  common shares equal to
               the  Class A  special  shares  held by  each  respective  Selling
               Shareholder of Pacific TelCom [Canada] Inc.

          4.2.2Further Features of Class A Special Shares.  Notwithstanding  the
               -------------------------------------------
               provisions concerning the conversion of Class A Special Shares of
               Pacific TelCom [Canada] Inc. set forth in Sections 4.1 and 4.2.1,
               Sellers may convert any or all such Class A special shares at any
               time.  Buyer Pacific TelCom,  Inc. agrees to cause Pacific TelCom
               [Canada]  Inc.  to issue to  Sellers a further  amount of Class A
               special  shares,  on the  occasion of any stock  dividend,  stock
               split, cash dividend or other  distribution,  in the same amounts
               per Class A special  share of Pacific  TelCom  [Canada] Inc. that
               are  accorded  to the  stockholders  of common  shares of Pacific
               TelCom, Inc.

     4.3  Funding New Territories. Subsequent to the Effective Date, it shall be
          ------------------------
          the duty and obligation of the Buyer to make such capital investments,
          on a priority basis, necessary as to allow the capacity and capability
          for the issuance of Local Access Numbers for four new Canadian  cities
          and  one  existing  open  Canadian  city,  for  the  purposes  of  the
          subscription of new subscribers to the telecommunications products and
          services  currently offered  separately by Buyer and Sellers.  Capital
          Investments  are defined in this  Section 4.3 to mean the costs of the

<PAGE>
          purchase  and  installation  of five T-1  telecommunication  switches,
          along with necessary operating capital sufficient to pay for necessary
          operating   expenses  of  the  Corporation  from  the  Effective  Date
          thereafter.  The duty and  obligation of the Buyer to make the capital
          investments,  on a priority basis, as set forth in this Section 4.3 is
          defined as follows:  From sources of funding to Pacific TelCom,  Inc.,
          consisting  of  investment  and  equity  capital,   proceeds  of  debt
          instrument offerings and lease line proceeds,  Buyer shall commit $.50
          of each dollar of such  funding  received to be applied to the capital
          investments  of this Section 4.3.  This  set-aside of capital  funding
          shall  continue  until an aggregate  amount of $1,035,000  has been so
          aggregated  by the Buyer to be applied as  described  in this  Section
          4.3, based upon anticipated expenses of telecommunications switches in
          the amount of $207,000 per unit.  It is understood by the parties that
          "Buyer" in this  Section 4.3 means  Pacific  TelCom,  Inc. and Pacific
          TelCom [Canada] Inc.

     4.4  Guarantee.  As a material  inducement to Seller,  Pacific TelCom, Inc.
          ---------
          has agreed to become a party to this  Agreement  and hereby  covenants
          and  agrees  to  indemnify  and  guarantee  each and  every one of the
          obligations  of  Pacific  TelCom   [Canada]  Inc.,  its  wholly  owned
          subsidiary.

     4.5  Grant of Authority for Certain Continued Operations.  The Buyer grants
          -----------------------------------------------------
          to the  Corporation,  through  its  President,  the  limited  right to
          operate the  Corporation  for certain  essential  post  Effective Date
          duties and  responsibilities.  This grant of authority shall extend to
          the operation of the Corporation's  Toronto office and switches,  only
          for as long as  necessary  to conduct  the  orderly  transfer  of such
          operations to the Buyer.  Notwithstanding the foregoing, this grant of
          authority is further intended to permit the conclusion of certain post
          Effective Date matters, including, by a way of illustration, filing of
          tax returns,  distribution  of cash payments of the Purchase  Price by
          Buyer to the Selling  Shareholders  and, to the extent  required,  the
          holding of Class A special shares of Pacific TelCom  [Canada] Inc., in
          trust to accommodate the exercise of any remaining outstanding options

<PAGE>
          held by option holders of the Corporation,  and the exercise of rights
          accorded to the Corporation's holders of Class A special shares of the
          Corporation.  No provision of this Section 4.4 shall be interpreted to
          limit the financial  responsibility  of the Buyer set forth in Section
          4.3.

     4.6  Retention  of  Management.  Buyer  agrees to  continue  to retain  the
          ------------------------
          services of Richard C.  Goldstein  as Chief  Executive  Officer of the
          Corporation, notwithstanding the limited grant of authority to operate
          set forth  above.  Buyer shall tender to him an  Employment  Agreement
          mutually  acceptable to Richard C.  Goldstein  and Buyer.  The parties
          acknowledge and agree that the retention of Mr. Goldstein shall act as
          a benefit to the Buyer during transition and for continued  operations
          and benefits of the Corporation thereafter,  and such hiring shall not
          be deemed to constitute an apparent  conflict-of-interest  on the part
          of  Mr.  Goldstein.  Buyer  further  agrees,  within  14  days  of the
          Effective  Date to cause its Board of Directors to appoint  Richard C.
          Goldstein  as a  director  of  Pacific  TelCom,  Inc.  and to have Mr.
          Goldstein serve on the same terms and conditions as the members of the
          existing Board of Directors of the Buyer.

     4.7  Resulting   Joint   Venture  and  Sharing  of  Revenues.   It  is  the
          -----------------------------------------------------
          understanding of Buyer and Sellers,  that the Closing of this Purchase
          Agreement  is in escrow  until the Date as  described  in Section  4.1
          "Finality".  In the event that the  transaction  does not close on the
          Closing Date, Buyer and Sellers shall undo the subject  transaction of
          this Purchase Agreement,  pursuant to Section 4.1 "Finality",  in such
          event, the parties agree that there shall be a resulting Joint Venture
          between them  concerning the Capital  Investment  made by the Buyer in
          having  installed five  telecommunications  switches with the capacity
          for the  services to be sold by the parties and the  revenues  derived
          from the joint marketing  efforts of the Buyer and Sellers.  Under the
          terms of such a resulting Joint Venture,  revenue,  after deduction of
          Buyer's approved operating costs, will be apportioned as follows:  one
          third of such revenues are to be apportioned to Buyer to be taken as a
          credit    toward    capital    expenditures    attendant    to    such
          telecommunications  switches, as set forth above; thereafter remaining
          revenues  shall be divided  equally  between  Buyer and Sellers.  Upon
          completion   of   repayment  of  Buyer  for  the   aforesaid   capital
          investments,  such  joint  venture  revenues  shall be  shared  by the
          parties equally,  after payment of all pre-approved or budgeted costs.
          In the event that Buyer and Sellers undo the subject  transactions  of

<PAGE>
          this Purchase  Agreement and establish such a resulting Joint Venture,
          it is  expressly  agreed  that all prior  sources of  revenues  of the
          Corporation  and  all  subsequently   developed  sources  of  revenues
          exclusively  generated  by  the  Corporation  shall  remain  the  sole
          property  of the  Corporation  and  shall not be  considered  revenues
          attributable to the resulting Joint Venture.

     4.8  Liabilities.  The Corporation is possessed of liabilities  regarding a
          -----------
          loan,  carrying a monthly  debt  service of  approximately  $3,500.00.
          Buyer shall expressly  assume the payments of this loan and, upon full
          repayment  of the  principal  balance,  Buyer  shall  be  entitled  to
          ownership  and  title of a cash  security  deposit  in the  amount  of
          $32,500.00.

     4.9  Accounts  Receivable.  With  respect to all accounts  receivable,  the
          -------------------
          Buyer shall be vested with title to all such  accounts  receivable  in
          existence on Effective Date.

     4.10 Employee  Benefits.  Any  and all  liability  of the  Corporation  for
          ------------------
          employee  benefits  or for paid  vacations  or for any other  employee
          benefit  accruals,  shall  be paid in full as of the  Effective  Date.
          Sellers'  Representative  shall  provide Buyer with such a certificate
          that such actions have taken place as Buyer may reasonably request.

     4.11 Tax Returns.  Sellers' Representative will cooperate and assist in the
          ------------
          preparation  and  filing,  on  behalf of the  Corporation,  of any tax
          returns  yet to be filed  with  respect  to any taxes  for the  fiscal
          period  ending  March  31,  2001  to  reflect  the  operations  of the
          Corporation  during that fiscal  year.  All such tax returns  shall be
          prepared and filed using tax accounting  methods and principals  which
          are  consistent  with  those used in tax  returns  for  preceding  tax
          periods, by the Chartered Accountants of the Corporation.

     4.12 Deposit With Visa.  Any and all deposits  maintained  with Visa as and
          -------------------
          for  security for the  processing  of credit card  transactions  shall
          remain  unaffected  by the  subject  transaction,  but  title  to such
          deposit  shall be  transferred  to the Buyer,  as part of the  subject
          transaction.

     4.13 Other Financial  Benefits.  It is agreed by the parties that the Buyer
          --------------------------
          shall have full rights,  title and interest to all accounts receivable
          of the Corporation,  and shall receive the right to claim  non-capital
          loss carry forward amounts on the Corporation's balance sheet as other
          and further benefits to the Buyer pursuant to the subject transaction,
          as of the Effective Date.

<PAGE>
  Section  5.0  Representations  and Warranties of the Corporation. Except as
                   --------------------------------------------------
may  be set forth on a Schedule of Exceptions, attached hereto as Schedule M, to
be  presented  at  the  Effective  Date,  the  Corporation hereby represents and
warrants  to  the Buyer as set forth below.  The Schedule of Exceptions shall be
presented  by  the  Corporation  to  the  Buyer  prior  to the execution of this
Purchase  Agreement and shall be attached hereto as an exhibit.  The Schedule of
Exceptions  shall  specifically  identify  the  relevant  sub-paragraph  of this
Agreement,  and  the  statements  made  in  each Schedule of Exceptions shall be
deemed  to  be  representations  and  warranties  as  if  made  hereunder.

     5.1  Organization and Standing;  Articles and Bylaws.  The Corporation is a
          -------------------------------------------------
          corporation  duly  incorporated  and  validly  existing  and  in  good
          standing  under the laws of the Province of Ontario.  The  Corporation
          has  requisite  corporate  power and  authority to own and operate its
          properties  and  assets,  and to carry on its  business  as  presently
          conducted and as proposed to be  conducted.  The  Corporation  is duly
          qualified and  authorized  to do business,  and is in good standing in
          each  jurisdiction  where  the  nature  of its  activities  and of its
          properties (both owned and leased) makes such qualification  necessary
          and where a failure  to do so qualify  would  have a material  adverse
          effect  on its  business  or  properties.  The  Articles  in the  form
          attached  hereto as  Exhibit D have been filed  with the  Minister  of
          Commercial Relations before the date hereof.

     5.2  Corporate  Power.  The Corporation will have at the Effective Date and
          ----------------
          on the  Closing  Date all  requisite  legal  and  corporate  power and
          authority to execute and deliver this  Agreement  and to carry out and
          perform its obligations under the terms of this Agreement.

     5.3  Subsidiaries.  The  Corporation  has  no  subsidiaries  or  affiliated
          ------------
          companies  and  does  not  otherwise  own  or  control,   directly  or
          indirectly, any equity interest in any corporation or entity.

     5.4  Capitalization.  The  authorized  capital stock of the  Corporation on
          --------------
          November  3, 2000  consists  of a)  6,315,000  shares of common  stock
          issued  and   outstanding  and  b)  540,500  Class  A  special  shares
          convertible  to 3.7  common  shares  each  issued and  outstanding  on
          November 3, 2000. The outstanding shares have been duly authorized and
          validly issued, and are fully paid and nonassesable and were issued in
          compliance  with all relevant  securities  laws. The  Corporation  has
          reserved:  (i)  600,000  shares of  common  stock  for  issuance  upon
          exercise of various  options held by directors,  employees and service
          providers; and (ii) 1,999,850 shares of common stock for issuance upon

<PAGE>
          conversion  of Class A  special  shares;  and  there  are (i) no other
          options,  warrants or other rights to purchase any of the  Corporation
          's authorized and unissued capital stock, or any security  directly or
          indirectly  convertible  into or  exchangeable  for  shares of capital
          stock of the Corporation,  (ii) so far as known to the Corporation, no
          voting  trust or  voting  agreements  among,  or  irrevocable  proxies
          executed by, stockholders of the Corporation, (iii) so far as known to
          the  Corporation,  no agreements  among  stockholders  proving for the
          purchase  or sale of the  Corporation  's capital  stock,  and (iv) no
          obligations  (contingent or otherwise) of the Corporation to purchase,
          redeem or  otherwise  acquire any shares of its  capital  stock or any
          interest therein or to pay any dividend or make any other distribution
          in respect  thereof.  All such  issued  and  outstanding  options  and
          warrants  have  been  duly  and  validly  issued  in  compliance  with
          applicable  federal and state  securities laws. To the extent that any
          Class A special shares have been  converted to US common shares,  this
          shall not operate as an impairment to this  Agreement of constitute an
          Exception.

     5.5  Authorization.  All corporate  action on the part of the  Corporation,
          -------------
          its  directors  and  shareholders  necessary  for  the  authorization,
          execution,  delivery and performance of this Agreement and delivery of
          the shares has been taken prior to the Effective  Date. The shares are
          free of any liens,  encumbrances,  or restrictions and are not subject
          to any preemptive rights or rights of first refusal.

     5.6  Liabilities. Except as set forth in Corporation's financial statements
          -----------
          as of March 31, 2000,  copies of which have been heretofore  delivered
          to  Buyer,   the  Corporation   has  no  undisclosed   liabilities  or
          obligations,   absolute  or   contingent,   except   liabilities   and
          obligations  which  have  been  incurred  in the  ordinary  course  of
          business none of which, in the aggregate, exceeds $10,000.

     5.7  Title to Properties and Assets;  Liens,  Etc.  Except for purchase and
          ----------------------------------------------
          lease and similar  arrangements  covering minor assets such as copiers
          and postage meters,  the Corporation has good and marketable  title to
          its material  properties and assets, is not in default of any material
          lease,  in each case  subject to no  mortgage,  pledge,  lien,  lease,
          encumbrance  or charge,  other than the lien of current  taxes not yet
          due and payable, except as set forth in Exhibit E.

<PAGE>
     5.8  Compliance with Other Instruments. The Corporation is not in violation
          -----------------------------------
          of any term of its Articles or Bylaws,  or in any material  respect of
          any term or  provision  of the  mortgages,  indebtedness,  indentures,
          contracts, agreements, or instruments or any other material agreement,
          or any judgment or decree. The best of its knowledge,  the Corporation
          is  not in  violation  of  any  order,  statute,  rule  or  regulation
          applicable to the Corporation  where such violation  would  materially
          and adversely  affect the  Corporation;  to the  Corporation's  actual
          knowledge,  the Corporation is not in violation of any order,  statute
          or regulation applicable to the Corporation.  The execution,  delivery
          and performance of and compliance with this Agreement has not resulted
          and will not result in any material violation of, or conflict with, or
          constitute a material  default under,  the  Corporation's  Articles or
          Bylaws or any of such material  agreements  nor result in the creation
          of, or mortgage,  pledge, lien,  encumbrance or charge upon any of the
          material properties or assets of the Corporation.

     5.9  Litigation. There are no actions, suits, proceedings or investigations
          ----------
          pending  against the  Corporation  or its  properties  or in which the
          Corporation is the plaintiff,  before any court or governmental agency
          nor, to the  Corporation's  knowledge,  is there any threat thereof or
          any reasonable basis therefor.

     5.10 Employees.  To  the  Corporation's   knowledge,  no  employee  of  the
          ---------
          Corporation  is in violation of any  material  term of any  employment
          contract,  if  any,  exclusive  agreement  or any  other  contract  or
          agreement  relating  to the  relationship  of such  employee  with the
          Corporation  or any other party  because of the nature of the business
          conducted or to be conducted by the  Corporation.  The  Corporation is
          not aware that any officer or key  employee,  or that any group of key
          employees,  intends  to  terminate  his or  its  employment  with  the
          Corporation,  nor does the  Corporation  have a present  intention  to
          terminate the employment of any key employee.  The  Corporation has in
          all material  respects  complied with all  applicable  Provincial  and
          federal laws related to employment.

     5.11 Exclusive Licenses. The Corporation (i) owns and has the right to use,
          ------------------
          free and clear of all  liens,  charges,  claims  and  restrictions  an
          Exclusive  License  Agreement  between the  Corporation  and Infotrust
          TELCO and an Exclusive  Re-Sellers  Agreement  with  Universal  Office
          Corporation, attached hereto as Exhibit F and Exhibit G, necessary for
          the  operation  of its  business  now  conducted  and  proposed  to be
          conducted,  and (ii) the  Corporation  is not  obligated  or under any
          liability whatsoever to make payments by a way of royalties,  fees, or
          otherwise  to any owner or  licensee of the  Exclusive  License of the
          Exclusive  License  Agreement,  with  respect to the use thereof or in
          connection  with the conduct of its  business,  or  otherwise.  To the
          knowledge of the  Corporation,  the Corporation has not infringed upon
          nor is it  infringing  such  Exclusive  License or other  intellectual
          property of any third party. The Company is not aware of any violation
          of  the  Company's  Exclusive  License  Agreement,  or  its  Exclusive
          Re-Sellers Agreement or other proprietary rights.

<PAGE>
     5.12 Duties to Option  Holders.  Pursuant to Section 4.4,  the  Corporation
          ---------------------------
          holds a grant of  authority  to hold,  in a fiduciary  capacity,  such
          shares  of  Pacific  TelCom  [Canada]  Inc.  Class A  shares  of stock
          equivalent  to  accommodate  the  exercise of  outstanding  options of
          employees and certain  special service  providers of the  Corporation.
          The  Corporation  agrees to perform the  distribution  of such Class A
          shares of Pacific TelCom [Canada] Inc. to such option holders promptly
          upon  the  exercise  of  such  options  and  it  is  agreed  that  the
          Corporation shall be entitled to retain the proceeds of such exercise.
          The  Corporation  agrees to indemnify and hold harmless  Buyer and its
          officers,  directors  and agents  harmless  from any and all  damages,
          losses,   costs,  or  expenses  suffered  or  incurred,   directly  or
          indirectly, through application of the Corporation's or Buyer's assets
          or  otherwise,  as a result  of any and all  claims,  demands,  suits,
          causes of action, proceedings,  judgments, and liabilities,  including
          reasonably counsel fees incurred in litigation or otherwise, assessed,
          incurred or  sustained  by or against  any of them with  respect to or
          arising out of any such indicia  fiduciary duty by the  Corporation to
          any such option holder.

     5.13 Brokers or  Finders.  There are no claims for  brokerage  commissions,
          --------------------
          finders'  fees  or  similar   compensation   in  connection  with  the
          transactions  contemplated  by this Agreement based on any arrangement
          or agreement made by or on behalf of the Corporation.

     5.14 Operating  Rights.  The  Corporation  has  all  operating   authority,
          -----------------
          licenses,  franchises,  permits,  certificates,  consents,  rights and
          privileges (collectively  "Authority") as are necessary or appropriate
          to the  operation of its business as now  conducted and as proposed to
          be  conducted  and which the failure to possess  would have a material
          adverse effect on the assets, operations or financial condition of the
          Corporation.   Such  Authority  are  in  full  force  and  effect,  no

<PAGE>
          violations  have been or are expected to have been recorded in respect
          of any  such  authority,  and no  proceeding  is  pending  or,  to the
          knowledge  of the  Corporation,  threatened  that could  result in the
          revocation or limitation of any such  authority.  The  Corporation has
          conducted  its business so as to comply in all material  respects with
          all such Authority.

     5.15 Minute Books.  The minute books of the Corporation  contain a complete
          -------------
          summary of all meetings of directors and  shareholders  since the time
          of  incorporation  and  reflect all  transactions  referred to in such
          minutes accurately in all material respects.

     5.16 Taxes.  All federal and Provincial tax returns required to be filed by
          -----
          the Corporation have been filed and are true in all material respects,
          and all taxes, assessments,  fees, and other governmental charges upon
          the Corporation, or upon any of its properties, income, or franchises,
          shown in such returns to be due and payable have been paid,  or if any
          such tax  returns  have not been  filed or if any such  taxes have not
          been paid or so reserved  for,  the failure to so file or to pay would
          not in the aggregate have a material  adverse impact on the properties
          or business of the Corporation.

     5.17 Disclosure.  None of the  representations  or  warranties  made by the
          ----------
          Corporation  in  this  Agreement  and no  written  information  in the
          Exhibits hereto or otherwise furnished to the Buyers in this Agreement
          or Exhibits contain any untrue statement of a material fact or omit to
          state a  material  fact  necessary  in order  to make  the  statements
          contained  herein and therein not  misleading.  The Corporation is not
          aware of any fact  which has not been  disclosed  to the  Buyer  which
          would have a material  adverse effect on the  Corporation's  business,
          prospects,  condition,  affairs or operations.  The Corporation is not
          aware of any error,  omission,  or untrue statement of a material fact
          in the information  relied upon by the Buyer in the preparation of the
          Exhibits.

     5.18 Transactions  with Affiliates.  Except for (i) regular salary payments
          ------------------------------
          and fringe  benefits under an individual's  compensation  package with
          the Corporation,  and (ii) certain advances that have been made to the
          Corporation  by certain key  employees  as described on Exhibit H, and
          (iii) certain related party transactions involving consulting fees and
          rent as  described  in  Exhibit  I, none of the  officers,  employees,
          directors,  or  affiliates  of the  Corporation,  or  members of their
          families  is a party to any  agreements,  understandings,  or proposed
          transactions  with the Company.  The Corporation has not guaranteed or
          assumed any obligations of the Corporation's  officers,  directors, or
          employees.

<PAGE>
     5.19 Corporation's   Contracts.   Except  with   respect  to  contracts  or
          ------------------------
          understandings  between the Corporation and its customers entered into
          in the  ordinary  course  of  business,  all  material  contracts  and
          agreements  of  the   Corporation   (i)  with  expected   receipts  or
          expenditures in excess of $10,000, or (ii) with provisions restricting
          or affecting the  development  or  distribution  of the  Corporation's
          products or  services,  or (iii) that provide  indemnification  by the
          Corporation with respect to infringements  of proprietary  rights,  to
          which the  Corporation  is a party as of the Effective date are listed
          as Exhibits F and G. All such  contracts  and  agreements  are legally
          binding. valid, and in full force and effect in all material respects.
          The  Corporation  has  received  no  indication  of  reduced  activity
          relating  to any  contract  or  agreement  with  any  customer  of the
          Corporation,  and the  Corporation  has no  knowledge  of any  current
          customer of the Corporation  that intends to reduce or discontinue its
          business with the Corporation.

     5.20 Financial Statements.  The Corporation has previously delivered to the
          ---------------------
          Buyer un-audited  financial statements for the periods ending June 30,
          2000.  All such  financial  statements  fairly  present the  financial
          condition  of the  Corporation  as of such  dates and the  results  of
          operations of the Company for such respective periods.

     5.21 Absence of Certain Changes.  There has not been since June 30, 2000 up
          ---------------------------
          to and  including the  Effective  Date,  any event or condition of any
          character   which  has   materially   and   adversely   affected   the
          Corporation's business,  prospects,  conditions,  affairs, operations,
          properties or assets, including but not limited to:

          5.21.1 any material adverse change in the financial condition, assets,
               liabilities or business of the Corporation;

          5.21.2 any damage,  destruction  or loss of any of the  properties  or
               assets of the  Corporation  (whether or not covered by insurance)
               materially  and adversely  affecting the business or plans of the
               Corporation; or

          5.21.3 any labor  trouble,  or any  other  event or  condition  of any
               character,  which  the  Corporation  knows or has  reason to know
               would  materially  and adversely  affect the business or plans of
               the Corporation.

<PAGE>
     5.22 Employee  Benefits.  Except  for  stock  options  outstanding  on  the
          ------------------
          Effective  Date,  forth in  Exhibit  J, the  Corporation  has no other
          currently  existing  employment,   bonus,  pension,   profit  sharing,
          deferred  compensation,   stock  bonus,  retirement,  stock  purchase,
          phantom stock or similar plans.

     5.23 Absence of Undisclosed Liabilities.  The Corporation does not have any
          -----------------------------------
          outstanding claims, liabilities, obligations, or indebtedness, whether
          accrued,  absolute,  contingent, or otherwise,  except as set forth in
          the Balance Sheet or referred to in the footnotes thereto,  other than
          liabilities  incurred subsequent to the Balance Sheet Date of June 30,
          2000 in the ordinary  course of business.  The  Corporation  is not in
          default in respect of the terms or conditions of any indebtedness.

     Section  6.  Representations  and  Warranties  of  the  Buyer.  The  Buyer
                  ------------------------------------------------
represents  and warrants to the Corporation  with respect to the purchase of the
Shares  as  follows:

     6.1  Organization.
          ------------

          6.1.1Pacific  TelCom, Inc.   Pacific   TelCom,   Inc.,  an  Illinois
               -------------------
               corporation  is a Corporation  duly  organized and existing under
               the  laws  of the  State  of  Illinois,  and  has  all  requisite
               corporate  authority to make,  execute,  deliver and perform this
               Agreement  and  this  Agreement  has  been  duly  authorized  and
               approved by all required corporate action of Pacific TelCom, Inc.
               Pacific  TelCom,  Inc. has an  authorized  single class of common
               stock in the amount of 25,000,000  shares. On the Effective Date,
               Pacific TelCom, Inc. has 10,846,040 outstanding common shares.

          6.1.2Pacific TelCom  [Canada] Inc.  Pacific TelCom  [Canada] Inc. is a
               ------------------------------
               Corporation  duly  organized  and existing  under the laws of the
               Province of Ontario, and has all requisite corporate authority to
               make,  execute,  deliver  and  perform  this  Agreement  and this
               Agreement has been duly  authorized  and approved by all required
               corporate  action of Pacific TelCom [Canada] Inc.  Pacific TelCom
               [Canada] Inc. has an authorized  class of common voting shares of
               which 10,000 shares are  outstanding  and Class A special shares,
               which are nonvoting and  convertible  to common shares of Pacific
               TelCom,  Inc. On the Effective Date, Pacific TelCom [Canada] Inc.
               has 11,125,000 outstanding Class A special shares.

<PAGE>
     6.2  No violation.  Neither the  execution and delivery of this  Agreement,
          ------------
          nor the  consummation  of the  transactions  contemplated  within  the
          Agreement  will  constitute a violation of, or be in conflict with, or
          result in a cancellation  of, or constitute a default under, or create
          or  cause  the  acceleration  of any  debt,  obligation  or  liability
          affecting,  or resulting in the creation or imposition of any security
          interest,  lien, or other  encumbrance upon any of the assets owned or
          used  by,  or  any  of  the  capital   stock  of  either   corporation
          constituting  the  Buyer  under:  (i)  any  term or  provision  of the
          Articles   of   Incorporation   or  by-laws   of  either   corporation
          constituting the Buyer; (ii) any judgment,  decree, order, regulation,
          or rule of any court or  government  authority;  (iii) any  statute or
          law;  (iv)  any  contract,   agreement,   indenture,  lease  or  other
          commitment  to which either  corporation  constituting  the Buyer is a
          party or by which it is bound; or (v) cause any material change in the
          rights  or  obligations  of  any  party  under  which  such  contract,
          agreement, indenture, or commitment.

     6.3  No Impairment.  Neither of the corporations constituting the Buyer are
          --------------
          impaired  by any law,  regulation  or order of any  court or  federal,
          state,  municipal,   provincial  or  other  governmental   department,
          commission,  board, bureau,  agency, or instrumentality and: (i) there
          are no law suits, proceedings,  claims, or governmental investigations
          pending or to the knowledge of Buyer,  threatened against or involving
          Buyer which could materially  impair its business;  and (ii) there are
          no judgments, consents, decrees, injunctions, or any other judicial or
          administrative  mandates  outstanding  against  Buyer which impair and
          adversely  affect  its  property,   assets,   liabilities,   financial
          condition,  results of operations,  or business prospects or its right
          to conduct is business as presently conducted.

     6.4  Disclosure.  None of the  representations  or  warranties  made by the
          ----------
          Buyer in this  Agreement and no written  information  furnished to the
          Selling  Shareholders  in this  Agreement  or  otherwise,  contain any
          untrue  statement of a material  fact or omit to state a material fact
          necessary in order to make the statements contained herein and therein
          not misleading.  The Buyer is not aware of any fact which has not been
          disclosed  to the  Selling  Shareholders  which  would have a material
          adverse   affect  on  the  rights  and   obligations  of  the  Selling
          Shareholders.

<PAGE>
     6.5  Shares of the Buyer.  The  outstanding  Class A special  shares of the
          ----------------------
          Buyer have been duly authorized and validly issued, and are fully paid
          and  non-assessable  and were issued in compliance with all applicable
          provincial  securities  laws.  The issuance of Buyer's Class A special
          shares transferred to the Selling  Shareholders herein are without the
          requirement  of  regulatory  approval from any  applicable  provincial
          regulatory agency. The Class A special shares of the Buyer paid to the
          Selling  Shareholders  hereunder  and the  common  shares  of  Pacific
          TelCom, Inc. which they are convertible to, are at the Effective Date,
          not publicly tradable,  have not been registered to be traded publicly
          on the  Effective  Date,  and on the  Effective  Date no public market
          exists for the trading of such Class A special shares or common shares
          of the corporations constituting the Buyer.

     6.6  Dilution.  Buyer  represents  that upon an event of  Finality,  as set
          --------
          forth in Section 4.1, whereby Class A special shares of Pacific TelCom
          [Canada] Inc. are converted to Pacific  TelCom,  Inc.,  common shares,
          that such common shares acquired by the Selling Shareholders  pursuant
          to this  transaction  shall be subject to significant  and substantial
          dilution.  Upon such  conversion to common  shares of Pacific  TelCom,
          Inc., it is understood  by the Selling  Shareholders  that the Selling
          Shareholders shall not be acquiring a substantial enough proportion or
          percentage of the outstanding  issuance of the common stock of Pacific
          TelCom,  Inc. to acquire management  control of Pacific TelCom,  Inc.,
          elect directors or officers,  or in any other method or manner prevent
          other or continued  dilution.  Selling  Shareholders  acknowledge  the
          representation  further  of Buyer  that,  in the event  such  dilution
          occurs,  it is  foreseeable  that such a dilution would be substantial
          and would have a  significant  effect in reducing  the  percentage  of
          ownership of the Selling Shareholders, individually and collectively.

     6.7  Access  to  Data.   Buyer  has  had  an  opportunity  to  discuss  the
          ----------------
          Corporation's  business,  management  and  financial  affairs with its
          management and the opportunity to review the Corporation's most recent
          un-audited financial statement for a complete fiscal year and business
          plan.  Buyer has also had an  opportunity to ask questions of officers
          of the Corporation which questions were answered to its satisfaction.

<PAGE>
     6.8  Brokers or Finders.  The Buyer has not, and will not, incur,  directly
          ------------------
          or  indirectly,  as a result of any action  taken by such  Buyer,  any
          liability for brokerage or finders' fees or agents' commissions or any
          similar charges in connection with this Agreement.

     6.9  Tax Liability.  To the extent it deems necessary, it has reviewed with
          --------------
          its own tax advisors  the federal,  state,  local and  provincial  tax
          consequences of this investment and the  transactions  contemplated by
          this  Agreement.  It  relies  solely on such  advisors  and not on any
          statements or representations of the Corporation or any of its agents.
          It understands that it (and not the Corporation)  shall be responsible
          for  its  own  tax  liability  that  may  arise  as a  result  of this
          investment or the transactions contemplated by this Agreement.

     Section  7.  Representations  and  Warranties of Selling Shareholders.  The
                  --------------------------------------------------------
Selling  Shareholders  (collectively  and  individually) severally represent and
warrant  to  the  Buyer  with  respect to the purchase of the shares as follows:

     7.1  Access to Data.  The Selling  Shareholders  have had an opportunity to
          ----------------
          discuss the terms and  conditions of the Purchase  Agreement  with the
          Corporation's  management and have had an opportunity to ask questions
          of officers of the Corporation, which questions were answered to their
          satisfaction.

     7.2  Authority.  The Sellers'  Representative  of the Selling  Shareholders
          ---------
          have all  requisite  legal power and  authority to execute and deliver
          this  Purchase  Agreement  and  certificates  for  the  shares  of the
          Corporation  hereunder  and to carry out and perform  its  obligations
          under the terms of this Agreement.

     7.3  Disclosure.  To the best of his or her knowledge, this Agreement, with
          ----------
          the  Exhibits  thereto,  when taken as a whole,  does not  contain any
          untrue statement of a material fact concerning the corporation or omit
          to state a material  fact  necessary  in order to make the  statements
          concerning the corporation contained herein not misleading in light of
          the circumstances under which they were made.

     7.4  Impairment. There are no actions, suits, proceedings,  which impair in
          ----------
          any way such  Selling  Shareholders'  ability  to enter into and fully
          perform its commitments  and  obligations  under this Agreement or the
          transactions contemplated hereby.

<PAGE>
     7.5  Brokers or Finders.  The Selling  Shareholders have not, and will not,
          --------------------
          incur,  directly,  or  indirectly,  as a result of any action taken by
          such Selling  Shareholders,  any  liability  for brokerage or finders'
          fees or agent's  commissions or any similar charges in connection with
          this Agreement.

     7.6  Compliance  With  Other  Instruments.  The  execution,   delivery  and
          ------------------------------------
          performance  of  and   compliance   with  this   Agreement,   and  the
          transference  and  delivery of shares will not result in any  material
          violation of, or conflict with, or constitute a material default under
          any    agreement,    lien,    mortgage,    pledge,    encumbrance   or
          collateralization on the part of the Selling Shareholders.

     7.7  General  Release.  In  consideration of the agreements made hereunder,
          ----------------
          each of the Selling  Shareholders hereby release and forever discharge
          the  Buyer  and  the  Corporation,  and  each of  their  shareholders,
          officers, directors, representatives,  attorneys, and employees, past,
          present,  and future,  individually  and  collectively for any and all
          claims,  demands,  causes of action or  liabilities  which each of the
          Selling  Shareholders  ever had or now has,  apart from  vested  stock
          options, advances to the Corporation or consulting fees accrued, which
          each of the Selling  Shareholders  ever had or now has, or which their
          heirs,  executors or administrators  hereafter can, shall, or may have
          upon or by a reason of any matter or cause  whatsoever,  whether known
          or  unknown,  suspected  or  unsuspected,  arising  on or prior to the
          Effective  Date,  arising out of or in any way connected  with each of
          the   Selling   Shareholders'   relationship   to   the   Corporation.
          Notwithstanding  the above,  this release shall not affect the Selling
          Shareholders'  rights  and  obligations  otherwise  set  forth in this
          Agreement.

     7.8  Tax Returns.  The Selling  Shareholders will be solely responsible for
          ------------
          any and all taxes  incurred as a result of any  taxable  event to them
          generated  by the  entry  into  or  performance  of any  term  of this
          Agreement.

     Section  8.  Conditions  to Buyer's Obligations.  The exchange of documents
                  ----------------------------------
and  shares  by the parties and the purchase of the shares on the Effective Date
is conditioned upon and subject to the fulfillment of obligations of the Sellers
at  or  prior  to  the  Effective  Date  as  contained  herein.

<PAGE>
     8.1  List of Selling  Shareholders.  The  Corporation  shall deliver to the
          -------------------------------
          Buyer  on  or  before  the   Effective   Date,   relative  to  Selling
          Shareholders,  a list of: (i)  unexercised  options of the Corporation
          setting forth the name of the option holder,  the address,  the number
          of  unexercised  options,  the exercise  price of such options and the
          expire  date,  to be set  forth  as  Exhibit  J;  and  (ii) a list  of
          remaining holders of Class A special shares setting forth the names of
          such  surviving  shareholders,  addresses,  number  of  shares  on the
          Effective Date and the amount of unpaid cumulative dividends stated in
          US Dollars and set forth in this Agreement as Exhibit K.

     8.2  Stock  Certificates.  Buyer shall  receive stock  certificates  of the
          -------------------
          Selling Shareholders representing all of the common shares of stock of
          the Corporation,  duly endorsed for transfer as provided herein at the
          Effective Date, or accompanied by executed  assignments  separate from
          certificates  with a stock power, in a form satisfactory to the Buyer.
          All endorsements on certificates, assignments or stock powers shall be
          signature guaranteed, if so required.

     8.3  No Material  Adverse Change.  Prior to the Effective Date, there shall
          --------------------------
          be no  material  adverse  change  in the  assets or  liabilities,  the
          business or condition,  financial or otherwise of the  Corporation and
          the Sellers'  representative  shall deliver to Buyer a certificate  in
          the form set forth as  Exhibit  L,  dated the  Closing  Date,  to such
          effect.

     Section  9.  Conditions  to  the  Sellers'  Obligations.  The  exchange  of
                  ------------------------------------------
documents  and  shares  by the parties on the Effective Date is conditioned upon
and  subject  to  the  fulfillment  of  the  conditions  set  forth  below.

     9.1  Proceedings.  All  proceedings  to be  taken  in  connection  with the
          -----------
          transactions contemplated by this Agreement and all documents incident
          thereto  shall be  reasonably  satisfactory  in form and  substance to
          Sellers and counsel.

     9.2  Performance  of  Obligations.  The  Buyer  shall  have  performed  and
          --------------------------
          complied with all  agreements  and  conditions  herein  required to be
          performed or complied with by them on or before the Effective Date.

<PAGE>
Section  10.  General  Provisions.
              -------------------

     10.1 Amendment and Modification.  Subject to applicable law, this Agreement
          ---------------------------
          may be amended,  modified  or  supplemented,  as the parties  mutually
          agree,   by  a  written   Agreement   signed   by  a  duly   appointed
          representative of the Buyer and a duly appointed representative of the
          Selling Shareholders.

     10.2 Expenses.  The  parties  hereto  shall pay all of their  own  expenses
          --------
          relating to the transactions contemplated by this Agreement, including
          the fees and expenses of their respective  counsel,  accountants,  and
          financial advisers.

     10.3 Governing Law. The  interpretation  and construction of this Agreement
          --------------
          and all matters  relating  hereto shall be governed by the laws of the
          State of Illinois  relating to  contracts  made and to be performed in
          Illinois.

     10.4 Waiver of Terms.  Any of the terms or conditions of this Agreement may
          ----------------
          be waived at any time by the party or parties entitled to the benefits
          thereof,  but  only  by a  written  notice  signed  by  an  authorized
          representative   of  the  party  or  parties  waiving  such  terms  or
          conditions.

     10.5 Captions.  The  article  and  section  captions  used  herein  are for
          --------
          reference  purposes  only, and shall not in any way affect the meaning
          or interpretation of this Agreement.

     10.6 Publicity.  Prior to the Effective  Date,  none of the parties  hereto
          ---------
          shall issue any press release or make any other statement to the media
          relating to this  Agreement or the matters  contained  herein  without
          obtaining the prior approval of the Buyer.

     10.7 Notices.  All  notices,  requests,  demands  and other  communications
          -------
          required or permitted  hereunder will be in writing and will be deemed
          to have been  duly  given  when  delivered  by hand or by air  express
          courier.

          If to the Buyer:   Pacific  TelCom,  Inc.
                             4270  S.  Decatur  Blvd.,  Ste.  A-9
                             Las  Vegas,  NV  89103
          Attention  Bill J. Angelos

          With a copy  to:   Kenneth  G.  Mason
                             General  Counsel
                             33  N.  LaSalle  St.,  Ste.  2131
                             Chicago,  IL  60602

<PAGE>
          If to the Sellers to: Richard  C.  Goldstein
                             EasyTel  Canada
                             18  King  Street  East,  Ste.  1402
                             Toronto,  Ontario  M5C1C4
                             Canada

          With a copy to:    Barry  M.  Polisuk
                             Garfinkle,  Biderman
                             1  Adelaide  St.  East  #1401
                             Toronto,  ON  M5C2V9

     10.8 Entire  Agreement.  This Agreement  contains the entire  understanding
          -----------------
          between and among the parties and supersedes any prior  understandings
          and  agreements  among  them  respecting  the  subject  matter of this
          Agreement.

     10.9 Agreement  Binding.  This  Agreement  shall be binding upon the heirs,
          ------------------
          executors,  administrators,  successors  and  assigns  of the  parties
          hereto.

     10.10Pronouns and Plurals.  All pronouns and any  variations  thereof shall
          ----------------------
          be deemed to refer to the masculine,  feminine,  neuter,  singular, or
          plural as the identity of the person or persons may require.

     10.11Presumption.  This  Agreement  or any  section  thereof  shall  not be
          -----------
          construed against any party due to the fact that said Agreement or any
          section thereof was drafted by said party.

     10.12Further  Action.  The  parties  hereto  shall  execute and deliver all
          ---------------
          documents,  provide all  information and take or forbear from all such
          action as may be necessary or  appropriate  to achieve the purposes of
          the Agreement.

     10.13Parties in  Interest.  Nothing  herein shall be construed to be to the
          -----------------
          benefit of any third  party,  nor is it  intended  that any  provision
          shall be for the benefit of any third party.

     10.14Savings  Clause.   If  any  provision  of  this   Agreement,   or  the
          ---------------
          application of such provision to any person or circumstance,  shall be
          held invalid,  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, shall not be affected thereby.

     IN  WITNESS WHEREOF, this Agreement has been executed by the parties hereto
on  the  day  and  year  first  written  above.

PACIFIC  TELCOM,  INC.                  EASYTEL  CANADA  CORPORATION
an  Illinois  Corporation               an  Ontario  Corporation

By:__________________________           By:__________________________
    Bill J. Angelos, President          Richard C. Goldstein, President

PACIFIC TELCOM [CANADA]  INC.           Selling  Shareholders
an  Ontario  Corporation

By:__________________________     By:__________________________
   Bill J. Angelos, President            Richard  C.  Goldstein
                                         Sellers'  Representative

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