Document:

LEASE TERMINATION AND SETTLEMENT AGREEMENT

     This Lease  Termination and Settlement  Agreement  ("Agreement") is entered
into as of the 25th day of February,  2002  ("Effective  Date"),  by and between
PWREF/MCC-CHINA  BASIN, LLC., a Delaware limited liability company ("Landlord"),
and RATEXCHANGE  CORPORATION,  a Delaware corporation ("Tenant").  (Landlord and
Tenant shall hereinafter collectively be referred to as the "Parties".)

                                R E C I T A L S :

     A.  BRE/CBL,   L.L.C.,  a  Delaware  limited   liability  company  ("BRE"),
predecessor-in-interest  to  Landlord  with  respect to the  Building  described
below,  and Tenant  entered into that certain  Office Lease  ("Original  Lease")
dated October 14, 1999, as amended by the First Amendment to Office Lease, dated
February 21, 2000 (the "First  Amendment"),  and the Second  Amendment to Office
Lease,  dated June 15,  2000 (the  "Second  Amendment"),  whereby  BRE leased to
Tenant, and Tenant leased from BRE,  approximately 5,571 rentable square feet of
space,  commonly known as Suites 3705 and 3515 (the  "Premises")  located on the
third (3rd) floor of the Wharfside  Building at 185 Berry Street, San Francisco,
California 94107 (the  "Building").  The Original Lease, the First Amendment and
the Second  Amendment  are  collectively  referred to as the "Lease",  a copy of
which is attached hereto as Exhibit A.

     B.  Pursuant to the terms of the Lease,  Landlord  holds the  proceeds of a
letter of credit in the amount of One Hundred  Forty Five  Thousand Nine Hundred
Thirty Seven  Dollars and 25/00  ($145,937.25)  (the "Letter of Credit"),  which
Letter of Credit was  provided  by Tenant for the  benefit of  Landlord  and BRE
pursuant to the Lease.  The Letter of Credit was drawn upon in  accordance  with
the terms of the Lease.

     C. In  October,  2001,  Tenant  vacated  the  Premises  and filed a lawsuit
against  Landlord  for  breaching  the  covenant of quiet  enjoyment  ("Tenant's
Claims")  and  Landlord  responded to Tenant's  complaint  and  cross-complained
against Tenant for breach of the Lease ("Landlord's  Claims"),  which claims are
presently  pending in the Superior Court of the State of California,  in and for
the City and County of San  Francisco  as Action  No.  324564  (hereinafter  the
"Pending Action").

     D. In order to avoid  litigation  of the  matters  alleged  in the  Pending
Action,  as well as other  disputed  issues  between the  Parties,  Landlord and
Tenant  have  agreed to enter into this  Agreement  to settle  their  claims and
release one another from any further  liability,  except as  otherwise  provided
herein.

                               A G R E E M E N T :

     NOW,  THEREFORE,  in  consideration  of  the  foregoing  recitals  and  the
conditions and the covenants hereinafter contained,  and for other consideration
hereinafter set forth, the receipt

<PAGE>

and  sufficiency  of which are hereby  acknowledged,  Landlord and Tenant hereby
agree as follows:

     1. Settlement of Claims and  Termination of the Lease.  Upon the receipt by
Landlord of (1) the payment by Tenant in the amount of Fifty Thousand and 00/100
dollars ($50,000),  in lawful money of the United States and (2) the delivery by
Tenant to Landlord of both (x) a stock  certificate  or  certificates  for Fifty
Thousand shares (50,000) of common stock of Tenant,  which common stock shall be
restricted stock pursuant to Rule 144 promulgated by the Securities and Exchange
Commission  and which  shall bear a legend so stating,  and (y) a duly  executed
Registration  Rights Agreement in the form attached hereto as Exhibit B, then as
of the Effective Date of this Agreement,  the Lease shall  immediately be deemed
terminated and of no further force or effect and the Mutual Release set forth in
Section 4 of this Agreement shall also become effective.

     2.  Letter of  Credit.  Tenant  hereby  waives  any rights or claims to the
proceeds from the Letter of Credit,  which  proceeds are hereby deemed earned by
Landlord  under  the  Lease  as of the  Effective  Date  of this  Agreement.

     3.   Dismissal  of  Pending   Action.   Upon  delivery  by  Tenant  of  the
consideration provided in Section 1 and upon the complete execution and delivery
of this  Agreement,  Tenant will file a  dismissal  with  prejudice  of Tenant's
Claims,  and Landlord  shall file a dismissal  without  prejudice of  Landlord's
Claims.

     4. Mutual Release of Liability.  The Parties,  for themselves and for their
respective successors,  predecessors, agents, employees, attorneys, and assigns,
and any person or entity  claiming  by,  under,  or through any of them,  hereby
release,  acquit and forever  discharge each other,  including their  respective
successors, predecessors, agents, employees, attorneys, and assigns, of and from
any and all actions, causes of action, suits, debts, liens,  contracts,  rights,
agreements,   obligations,  promises,  liabilities,  claims,  demands,  damages,
controversies,  losses,  costs and  expenses  (including,  but not  limited  to,
attorney's fees and costs actually incurred),  past, present or future, known or
unknown,  fixed or contingent,  suspected or unsuspected,  of any nature or kind
whatsoever  between  them,  including  (without  limiting the  generality of the
foregoing) all claims or causes of action arising out of, or relating in any way
to, the  matters  alleged,  or which  could have been  alleged,  in the  Pending
Action. Each of the Parties acknowledges that there is a risk that subsequent to
the  execution  of this  Agreement,  one or both of the Parties  could decide or
determine  that  obligations  exist to it or that it has  incurred  or  suffered
damages  which were  unknown or  unanticipated  at the time this  Agreement  was
executed,  which if known may have  materially  affected its decision to execute
this  Agreement.  Each of the Parties further  acknowledges  and agrees that, by
reason of the release  contained herein, it is assuming the risk of such unknown
matters and agrees that this release  applies  thereto.  Therefore,  the risk of
such unknown  matters having been bargained for between the Parties as a part of
the consideration  for this Agreement,  each of the Parties expressly waives and
releases all rights and benefits  conferred upon it by the provisions of Section
1542 of the California Civil Code, which provides:

     "A GENERAL  RELEASE DOES NOT EXTEND TO CLAIMS  WHICH THE CREDITOR  DOES NOT
     KNOW OR SUSPECT

                                      -2-
<PAGE>

     TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,  WHICH IF KNOWN
     BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

     Each party  acknowledges  that it has received the advice of legal  counsel
with respect to the aforementioned  release and waiver and understands the terms
thereof.

     5. Representations of Tenant. Tenant represents and warrants to Landlord as
follows:

          (a) Tenant has not heretofore assigned or sublet all or any portion of
its interest in the Lease;

          (b) No other person,  firm or entity has any right,  title or interest
in the Lease;

          (c) Tenant has the full  right,  legal power and actual  authority  to
enter into this  Agreement and to terminate the Lease without the consent of any
person, firm or entity;

          (d)  Tenant  is  a  corporation  duly  organized,   validly  existing,
authorized to exercise all its corporate powers,  rights and privileges,  and in
good  standing  in  the  States  of  California   and  Delaware  and  all  other
jurisdictions in which it is doing business; and

          (e) All issued and  outstanding  shares of Tenant's  common  stock (i)
have  been  duly  authorized  and  validly  issued,  (ii)  are  fully  paid  and
nonassessable,  and  (iii) to the best of  Tenant's  knowledge,  formed  after a
reasonable  and good faith  inquiry,  have been  issued in  compliance  with all
applicable state and federal laws concerning the issuance of such securities.

Notwithstanding  the  termination  of the Lease  and the  release  of  liability
provided  for  herein,  the  representations  and  warranties  set forth in this
Section 5 shall survive the  termination of the Lease and Tenant shall be liable
to Landlord for any material inaccuracy or breach thereof.

     6. Representations of Landlord.  Landlord represents and warrants to Tenant
as follows:

          (a) Landlord has sufficient liquid and other assets and experience and
sophistication  in  investment  matters  that it does and  would  qualify  as an
"Accredited  Investor"  within the meaning of the  federal and state  securities
laws and regulations;

          (b) Landlord has conducted its own independent due diligence, with the
assistance of its own legal and financial advisors having appropriate  expertise
in such matters,  concerning  the present and  potential  financial and business
condition and prospects of Tenant and into the present and/or potential value of
the  common  stock of  Tenant,  and has relied  solely on the  results  thereof,
including the advice of its own advisers, in deciding to accept 50,000 shares of
common stock of Tenant as part of the consideration for this Agreement;

          (c) Other than as expressly  represented in this  Agreement,  Landlord
has not relied  upon  anything  stated,  orally or in writing,  expressly  or by
implication, by Tenant in

                                      -3-
<PAGE>

deciding to enter into this  Agreement  and/or to accept 50,000 shares of common
stock of Tenant as part of the consideration for this Agreement;

          (d) Landlord  understands and  acknowledges  that the 50,000 shares of
common stock of Tenant  which are to be  delivered as part of the  consideration
for this agreement are restricted shares which have not been registered pursuant
to either state or federal securities laws, that there is presently no available
market for such  shares and that such  shares may not be freely  transferred  or
sold.  Landlord  further  understands  and  acknowledges  that  Tenant  makes no
representation, express or implied, that there ever will be a market or means of
transferring or selling such shares;

          (e) Landlord  understands and acknowledges  that (i) the 50,000 shares
are  restricted  securities  (as defined under Rule 144) and may not be offered,
sold or otherwise  transferred  unless and until registered under the Securities
Act or pursuant to an exemption from the registration  requirements  thereof and
(ii) the certificates  representing the Shares will bear a legend  substantially
in the following form:

     "THE  SECURITIES  EVIDENCED  HEREBY  HAVE NOT  BEEN  REGISTERED  UNDER  THE
     SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"),  OR APPLICABLE
     STATE  SECURITIES  LAWS AND MAY NOT BE  OFFERED  FOR SALE,  SOLD,  PLEDGED,
     ASSIGNED OR OTHERWISE DISPOSED OF, AND NO TRANSFER OF THE SECURITIES MAY BE
     EFFECTED  BY THE  COMPANY OR ITS  TRANSFER  AGENT,  IN THE  ABSENCE OF SUCH
     REGISTRATION OR ANY EXEMPTION THEREFROM."

          (f) Landlord shall rely solely on its own legal and financial advisors
with respect to the transferability of such shares at any time in the future.

Notwithstanding  the  termination  of the Lease  and the  release  of  liability
provided  for  herein,  the  representations  and  warranties  set forth in this
Section 6 above shall survive the termination of the Lease and Landlord shall be
liable to Tenant for any material inaccuracy or breach thereof.

     7. Continuing  Liability.  Notwithstanding the termination of the Lease and
the release of liability  provided  herein,  Tenant shall  remain  liable,  with
respect  to the  period of its  tenancy  prior to the  Effective  Date,  for the
performance of Tenant's  indemnification  obligations in Article 10 of the Lease
and  Landlord  shall have all rights and  remedies  with  respect to such Tenant
obligations  as set forth in the  Lease,  but only to the extent  that  Tenant's
obligations are paid or performed by the insurance  policies required to be held
by Tenant under the Lease.

     8. Integration. This Agreement constitutes the entire agreement between the
Parties and  supersedes  all prior and  contemporaneous  contracts,  agreements,
promises,  and understandings  between the parties concerning the subject matter
of this  Agreement.  This Agreement may not be altered,  modified,  or otherwise
changed in any respect  except by a writing duly  executed by both  Parties.  No
representations,  circumstances,  or  conditions  existing  before the Agreement
shall be used in any way to modify the Agreement.

                                      -4-
<PAGE>

     9. Attorneys' Fees.  Should any dispute arise between the parties hereto or
their   legal   representatives,   successors   and   assigns   concerning   the
interpretation  or  performance of any provision of this Agreement or the rights
and duties of any  person in  relation  thereto,  the party  prevailing  in such
dispute shall be entitled, in addition to such other relief that may be granted,
to recover from the other party  reasonable  attorneys'  fees and legal costs in
connection with such dispute.

     10. Severability. Should any provision of this Agreement be held invalid or
illegal, such illegality shall not invalidate the whole of this Agreement,  but,
rather,  the  Agreement  shall be construed as if it did not contain the illegal
part,  and the rights and  obligations  of the Parties  shall be  construed  and
enforced accordingly.

     11. Governing Law. This Agreement shall be governed and construed under the
laws of the State of California.

     12. Counterparts.  This Agreement may be executed in counterparts,  each of
which shall be deemed an original,  but such counterparts,  when taken together,
shall constitute one agreement.

     13. Binding Effect. This Agreement shall inure to the benefit of, and shall
be binding upon, the parties hereto and their respective legal  representatives,
successors and assigns.

     14. Authority.  The person executing this Agreement on behalf of each Party
represents  and  warrants  that such person has the  authority  to execute it on
behalf of such party.

     15. Time of the Essence.  Time is of the essence of this  Agreement and the
provisions contained herein.

     16.  Further  Assurances.  Landlord and Tenant hereby agree to execute such
further documents or instruments as may be necessary or appropriate to carry out
the express provisions of this Agreement.

                                      -5-
<PAGE>

     17.  Voluntary  Agreement.  The parties have read this Agreement and mutual
release as contained  herein,  and on the advice of counsel they have freely and
voluntarily entered into this Agreement.

     IN WITNESS WHEREOF,  Landlord and Tenant have executed this Agreement as of
the day and year first above written.

                                         "LANDLORD"

                                         PWREF/MCC-CHINA BASIN L.L.C.,
                                         a Delaware limited liability company

                                         By: ________________________________

                                             Its: ___________________________

                                         "TENANT"

                                         RATEXCHANGE CORPORATION,
                                         a Delaware corporation

                                         By: ________________________________

                                             Its: ___________________________

                                         By: ________________________________

                                             Its: ___________________________

                                      -6-
<PAGE>

                                    EXHIBIT A

                                  OFFICE LEASE

                                    EXHIBIT A
                                       -1-
<PAGE>

                                    EXHIBIT B

                          REGISTRATION RIGHTS AGREEMENT

                                    EXHIBIT B
                                       -1-STOCK PURCHACE AGREEMENT

                                  BY AND AMONG

                             RATEXCHANGE CORPORATION

                                       AND

                            INSTREAM SECURITIES, INC
                       f.n.a. SPIDER SECURITIES, INC. AND

                   INDEPENDENT ADVANTAGE FINANCIAL & INSURANCE
                                 SERVICES, INC.

                                December 7, 2001

<PAGE>

                            STOCK PURCHASE AGREEMENT

     THIS STOCK  PURCHASE  AGREEMENT,  dated as of December  7, 2001,  is by and
among  RateXchange  Corporation.,  a  Delaware  corporation  (the  "PURCHASER"),
Independent  Advantage  Financial & Insurance  Securities,  Inc.,  a  California
corporation,  sole shareholder (the "SELLER"),  and Instream  Securities,  Inc.,
formerly  know  as  Spider  Securities,  Inc.,  a  California  corporation  (the
"COMPANY").

     A. The Seller is the Company's sole shareholder.

     B. The  Purchaser  desires  to  acquire  from the  Seller  all of the Stock
Interests  in the  Company  such that the  Company  will be wholly  owned by the
Purchaser upon the completion of this transaction.

     C. The parties  hereto wish to make  certain  representations,  warranties,
Covenants  and  agreements  in  connection  with  the  purchase  of  all  of the
outstanding  Stock  Interests  in the  Company  and  also to  prescribe  various
conditions to such transaction.

     NOW THEREFORE, for good and valuable consideration, and in consideration of
the representations,  warranties,  convenants,  agreements and conditions herein
contained, the parties hereto agree as follows:

                                    ARTICLE 1
                   PURCHASE AND SALE OF STOCK; PURCHASE PRICE

     1.1  Purchase  and  Sale of  Stock.  Upon  the  terms  and  subject  to the
conditions of this Agreement,  at the Closing (as defined below) the Seller will
sell and deliver to the  Purchaser,  and the  Purchaser  will  purchase from the
Seller,  all the Stock of the  Company  which Stock will  constitute  all of the
outstanding Stock of the Company as of the Closing Date.

     1.2 Purchase  Price.  At the Closing the  purchaser  will pay the Seller an
aggregate  amount of $50,000.00 in cash (the "Purchase  Price") for the Stock of
the  Company.  Further,  at the Closing the  Purchaser  will  purchase  from the
Company certain cash assets including a clearing deposit,  and bank deposit (the
"Deposit  Accounts").  At  the  date  of  this  Agreement,  this  deposit  total
approximately $7,500.

     1.3 Closing. Subject to the satisfaction or waiver of all of the conditions
provided  for herein,  and unless this  Agreement  has been  terminated  and the
transactions  contemplated  herein  have been  abandoned  pursuant  to Article 7
hereof, the consummation of the transactions contemplated by this Agreement (the
"Closing"),  will take place at a time and on a date the (the "Closing Date") to
be specified by the parties.

                               Page 2 of 26 Pages
<PAGE>

     4. Deliveries at the Closing.

          a) Deliveries by the Seller.  At the Closing,  the Seller will deliver
     or cause to be delivered to the Purchaser the following:

               (i) A  certificate  representing  the Stock free and clear of all
          Encumbrances (as defined below):

               (ii) The minute  books and  capital  contribution  records of the
          Company;

               (iii) Certificates of good standing of the Company from its state
          of incorporation (California);

               (iv) A certificate  (the "Closing  Certificate")  executed by the
          Company's financial  operations  principal setting forth the Company's
          Net  Capital  and Net  Worth as of the  close of  business  on the day
          before  the  Closing  Date and  specifying  in  reasonable  detail the
          calculations from which such amounts have been derived.

          b) Deliveries  by the  Purchaser.  At the Closing the  Purchaser  will
     deliver to the Seller the cash consideration of $50,000.00, and the further
     cash  consideration  equal to the  amounts  in the  Deposit  Account on the
     Closing Date.

                                    ARTICLE 2
            REPRESENTATIONS AND WARRANTIES OF THE SELLER AND COMPANY

     The Seller and Company, jointly and severally, hereby represent and warrant
to the Purchaser  that,  as of the date of this  Agreement and as of the Closing
Date, the following statements will be true and correct.

     2.1 Organization, etc. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of California with the
requisite  power  and  authority  to carry on its  business  as it is now  being
conducted and to own,  operate and lease its properties and assets.  The Company
is  qualified  to do  business  in most of the other  states.  The Seller  shall
provide Purchaser with complete and correct copies of the Company's  Articles of
Incorporation.  The Company  does not own or control  any  capital  stock of any
corporation or any interest in any partnership, joint venture or other entity.

                               Page 3 of 26 Pages
<PAGE>

     2.2 Stock. The Shares outstanding of the Company are set forth in Exhibit A
attached  hereto.  The Ownership of the Company  outstanding,  as of the Closing
Date  of this  Agreement  and set  forth  in  Exhibit  A,  represent  all of the
outstanding  shares  of  the  Company.  The  shares  of  the  Company  are  duly
authorized, validly issued, fully paid and non-assessable. The Seller represents
and  warrants  that the shares  listed on Exhibit A as being owned by the Seller
are free and clear of any pledge, lien, security interest, restriction,  option,
claim or  charge  of any kind  whatsoever  ("Encumbrances"),  and  there  are no
agreements relating to the Seller's ownership of such shares. There are no other
shares of the Company outstanding.  There is no subscription,  option,  warrant,
call, right, contract,  agreement,  commitment,  understanding or arrangement to
which the  Company or the Seller is a party,  or by which any of them are bound,
with respect to the  issuance,  sale,  delivery or transfer of the shares of the
Company,  including any right of  conversion  or exchange  under any security or
other instrument.

     2.3 Authorization, etc. The Seller and Company have all requisite power and
authority  to  enter  into,  execute,  deliver,  and  perform  their  respective
obligations  under this  Agreement.  This  Agreement  has been duly and  validly
executed  and  delivered  by the Seller and Company and is the valid and binding
legal  obligation  of  the  Seller  and  Company  enforceable  against  them  in
accordance  with its terms,  subject to  bankruptcy,  moratorium,  principles of
equity and other limitations limiting the rights of creditors generally.

     2.4 Non-Contravention.  Neither the execution,  delivery and performance of
this  Agreement,  and each other agreement to be entered into in connection with
this Agreement,  nor the  consummation of the transactions  contemplated  herein
will:

          a)  Violate,  contravene  or in  conflict  with any  provision  of the
     Articles of Incorporation of the Company;

          b) Be in conflict with, or constitute a default,  however  defined (or
     an event  which,  with the giving of due notice or lapse of time,  or both,
     would   constitute  such  a  default),   under,  or  cause  or  permit  the
     acceleration  of the maturity of, or give rise to any right of termination,
     cancellation,  imposition of fees or penalties under any debt,  note, bond,
     lease, mortgage,  indenture,  license,  obligation,  contract,  commitment,
     franchise, permit, instrument or other agreement or obligation to which the
     Company or the  Seller is a party or by which the  Company or the Seller or
     any of the  Company's  or the  Seller's  properties  or assets is or may be
     bound;

          c) Result in the creation or imposition of any  Encumbrances  upon any
     property or assets of the Company or the Seller under any debt, obligation,
     contract,  agreement or  commitment to which the Company or the Seller is a
     party or by which the Company or the Seller or any of the  Company's or the
     Seller's assets or properties are bound; or

                               Page 4 of 26 Pages
<PAGE>

          d)  Materially  violate any  statute,  treaty,  law,  judgment,  writ,
     injunction, decision, decree, order, regulation, ordinance or other similar
     authoritative  matters  (referred  to  herein  individually  as a "Law" and
     collectively   as  "Laws")  of  any  foreign,   federal,   state  or  local
     governmental or quasi-governmental,  administrative, regulatory or judicial
     court, department,  commission,  agency, board, bureau,  instrumentality or
     other   authority   having   jurisdiction   thereof   (referred  to  herein
     individually as an "Authority" and collectively as "Authorities").

     2.5 Consents  and  Approvals.  With  respect to the Company and Seller,  no
consent,   approval,  order  or  authorization  of  or  from,  or  registration,
notification,  declaration or filing with  ("Consent") any individual or entity,
including without  limitation any Authority,  is required in connection with the
execution,  deliver any individual or entity,  including without  limitation any
Authority, is required in connection with the execution, delivery or performance
of this Agreement the Seller or the consummation by the Company or the Seller of
the transactions contemplated herein.

     2.6 Financial Statements. The Seller shall provide Purchaser with a copy of
the  audited  financial  statements  of the  Company as of  December  31,  2000,
together  with a copy of the unaudited  financial  statement of the Company (the
"Most Recent  Financial  Statement")  as of September 30, 2001 and the Company's
audited  financial  statement  as of December  31, 1998 and  December  31, 1999.
Except as disclosed  therein,  the aforesaid  financial  statements:  (i) are in
accordance  with the books and records of the Company and have been  prepared in
conformity  with GAAP  consistently  applied for all  periods  (except as stated
therein or in the notes  thereto);  and (ii) are true,  complete and accurate in
all material  respects and fairly present the financial  position of the Company
as of the  respective  dates  thereof,  and  the  income  or  loss,  changes  in
memberships' interests and changes in cash flows (or financial position) for the
periods then ended. The Net Capital and Net Worth of the Company as set forth on
the most recent Financial Statement are in accordance with the books and records
of the Company,  are true,  complete and accurate in all materials  respects and
fairly  present  the Net  Capital and Net Worth of the Company as of the Closing
Date.

     2.7 Absence of  Undisclosed  Liabilities.  Except as disclosed  the Company
does not have any  liabilities,  obligations  of claims of any kind  whatsoever,
whether secured or unsecured, accrued or unaccrued, fixed or contingent, matured
or unmatured, direct or indirect,  contingent or otherwise and whether due or to
become due other than  liabilities  that are fully  reflected or reserved for in
the financial statement.

                               Page 5 of 26 Pages
<PAGE>

     2.8 Absence of Certain Changes. Since the date of the Most Recent Financial
Statement,  the  Company  has owned and  operated  its  assets,  properties  and
business in the ordinary  course of business and consistent  with past practice.
Without  limiting the  generality  of the  foregoing,  subject to the  aforesaid
exceptions:

          a) The Company has not  experienced any change that has had a Material
     Adverse  Effect on the Company or  experienced  any event or failed to take
     any  action  that  reasonably  could be  expected  to result in a  Material
     Adverse Effect on the Company;

          b) The Company has not suffered (i) any loss,  damage,  destruction or
     other  property or casualty  (whether or not covered by  insurance) or (ii)
     any  loss  of  officers,  employees,  dealers,  distributors,   independent
     contractors,  customers  or  suppliers,  which  had  or may  reasonably  be
     expected to result in a Material Adverse Effect on the Company; and

          c) No event  has  taken  place,  which if  consummated  following  the
     Effective Date hereof would constitute a violation of Section 4.1 hereof.

     2.9  Assets.  The  Company  has good and  indefeasible  title to all of its
assets and  properties,  whether or not  reflected in the Most Recent  Financial
Statement or acquired  after the date  thereof,  that relate to or are necessary
for the Company to conduct its business and operations  are currently  conducted
(collectively,  the  "Assets"),  free and clear of any mortgage,  pledge,  lien,
security  interest,  conditional or installment  sales  agreement,  encumbrance,
claim, easement, right of way, tenancy,  covenant, other than (i) liens securing
specific  Liabilities shown on the Most Recent Financial  Statement with respect
to which no breach,  violation or default exists;  (ii)  mechanics',  carriers',
workers' or other like liens arising in the ordinary  course of business;  (iii)
minor  imperfections  of title  that do not  individually  or in the  aggregate,
impair the continued use and operation of the Assets to which they relate in the
operation  of the  Company as  currently  conducted;  and (iv) liens for current
taxes not yet due and payable or being  contested  in good faith by  appropriate
proceedings ("Permitted Liens").

     2.10 Litigation.  Except as disclosed,  there is no legal,  administrative,
arbitration,  or other proceeding,  suit, claim or action of any nature or order
(a "Legal Proceeding") pending, noticed,  scheduled, or, to the knowledge of the
Seller and  Company,  threatened  by or against or involving  the  Company,  its
assets,  properties or business or its directors,  officers, agents or employees
(but only in their capacity as such), whether at law or in equity,  before or by
any person or entity or authority, or which questions or challenges the validity
of this Agreement or in connection with the transactions contemplated herein.

                               Page 6 of 26 Pages
<PAGE>

     2.11 Tax Matters.

          a) For purposes of this Agreement, the term "Taxes" means all federal,
     state, local,  foreign and other net income,  gross income, gross receipts,
     sales,  use, ad valorem,  transfer,  franchise,  profits,  license,  lease,
     service, service use, withholding,  payroll, employment, excise, severance,
     stamp,  occupation,  premium, real or personal property,  windfall profits,
     customs, duties or other taxes, fees, assessments, charges or levies of any
     kind whatever,  together with any interest and any penalties,  additions to
     tax or additional  amounts with respect  thereto,  and the term "Tax" means
     any one of the foregoing  Taxes. In addition,  the term "Tax Returns" means
     all returns, declarations, reports, statements and other documents required
     to be filed with any Authority in respect of California,  and the term "Tax
     Return" means any one of the foregoing Tax Returns.  The Seller and Company
     hereby represents and warrants the following with respect to the Company:

          b) There  are no facts  or  circumstances  which  could,  directly  or
     indirectly, subject the Purchaser or any of its affiliates to any Liability
     of any nature with respect to Taxes of the Company or subject the Assets to
     any Lien resulting from the failure to pay,  withhold or otherwise  satisfy
     outstanding  Taxes of the Company.  Company will pay all Taxes imposed upon
     the  Company on or before the  Closing  Date.  Any Tax  Returns  covering a
     period  during  which the Company was owned by the Seller will be submitted
     to the Seller for review prior to filing.

     2.12  Insurance.  The only  policy of  insurance  held by the  Company is a
Fidelity Bond, a copy of which will be provided to Purchaser.

     2.13 Employee Benefit Plans.  The Company does not have any employees.  The
Company  does not  have,  nor has it ever  had any  employee  pension,  welfare,
incentive,  perquisite, paid time off, severance or other employee benefit plan,
policy,  practice or agreement  sponsored,  maintained or  contributed to by the
Company  or  any  affiliate,   whether  or  not   administered  by  the  Company
(collectively,  "Benefit  Plans"),  to which the Company or any  affiliate  is a
party or with  respect  to which the  Company  or any  affiliate  could have any
Liability.

     2.14 Bank Accounts.  The Company presently  maintains one (1) bank account.
The balance in such account  will be  transferred  to Seller at the Closing,  by
appropriate signatures on bank documents.

                               Page 7 of 26 Pages
<PAGE>

     2.15 Contracts and Commitments; No Default.

          a) Neither  the  Company  nor the Seller is a party to, nor are any of
     the Assets bound by, any written or oral:

               (i)   Employment,   non-competition,   consulting   or  severance
          agreement,    collective    bargaining    agreement,    or    pension,
          profit-sharing,  incentive compensation,  deferred compensation, stock
          purchase,  stock option,  stock  appreciation  right, group insurance,
          severance pay or retirement plan or agreement;

               (ii) Indenture, mortgage, note, installment obligation, agreement
          or other instrument relating to the borrowing of money by the Company;

               (iii) Contract,  agreement,  lease (real or personal property) or
          arrangement  that (A) is not  terminable  on less than 30 days' notice
          without  penalty,  (B) is not over one year in length of obligation of
          the Company,  or (C) involves an obligation of more than $500 over its
          term;

               (iv)  Obligation or  requirement  to provide funds to or make any
          investment (in the form of a loan, capital  contribution or otherwise)
          in any person or entity;

               (v)  Outstanding  sales or  purchase  contracts,  commitments  or
          proposals  that will result in any material  loss upon  completion  or
          performance thereof after allowance for direct distribution  expenses,
          or  bound  by  any  outstanding  contracts,  bids,  sales  or  service
          proposals quoting prices that are not reasonably expected to result in
          a normal profit.

     2.17 Customers.  There has not been in the twelve-month period prior to the
Closing Date any dispute with or complaints  made by any customer or user of the
Company's  products or services that could  reasonably be  anticipated to have a
Material  Adverse  Effect,  not any  set of  circumstances  that  is  reasonably
anticipated to have a Material Adverse Effect,  on any relationship  between the
Company and any such customer or user of the Company's products or services. All
of the Company's  relationships  with its  customers  are good,  and neither the
Seller nor the  Company  is aware of any  circumstances  that  could  materially
affect the ability of any  customer of the  Company to continue  doing  business
with the  Purchaser in the manner in which such  business has been  conducted in
the past.  The  Company  is not aware of any facts or  circumstances  that would
cause the Company as a result of the transactions contemplated

                               Page 8 of 26 Pages
<PAGE>

by this  Agreement.  The Seller and Company  have made  available to Purchaser a
current list of all of the Company's customers.

     2.18 Registration Matters.

          a) The Company is duly registered as a  broker-dealer  with the United
     States  Securities  and Exchange  Commission  ("SEC"),  the  securities and
     insurance  commission  or similar  authority  of most of the 50 states that
     require  such  registrations  are in full force and  effect.  A list of the
     states  where such  registrations  are not in full force and effect will be
     provided  Purchaser  on  the  Closing  Date.  The  Company  is,  and at the
     effective  time of the Closing will be, a member in good  standing with all
     required   Self-Regulatory   Organizations   and  in  compliance  with  all
     applicable rules and regulations of the Self-Regulatory Organizations.  For
     the purposes of this  Agreement,  the term  "Self-Regulation  Organization"
     means the National  Association  of  Securities  Dealers  ("NASD") or other
     commission,  board, agency, or body that is charged with the supervision or
     regulation of brokers,  dealers,  securities underwriting or trading, stock
     exchange,  commodities exchanges, insurance companies or agents, investment
     companies  or  investment  advisors,  or to the  jurisdiction  of which the
     Seller or the Company is otherwise subject.

          b) The Company will make available to the Purchaser, true, correct and
     complete copies of each Uniform Application for Broker-Dealer  Registration
     amendments  thereto  filed  by  the  Company  (each,   "Company  Form  BD")
     reflecting  all  amendments  thereto filed with the NASD or the SEC, as the
     case may be, on or prior to the date  hereof.  Each  Company  Form BD is in
     compliance with the applicable  requirements of the Securities Exchange Act
     of 1934, as amended,  and the rules and relations thereunder (the "Exchange
     Act") and does not contain any untrue  statement of a material fact or omit
     to state a material fact required to be stated therein or necessary to make
     the statements therein, in light of the circumstances under which they were
     made, not  misleading.  The Seller and Company will make available true and
     complete  copies of all audit reports since December 31, 1998 by the SEC or
     the NASD regarding the Company. Each member,  director,  officer, agent and
     employee  of  the  Company   who  is  required  to  be   registered   as  a
     representative,  principal or agent with the  securities  commission of any
     state or with any Self  Regulating  Organization is duly registered as such
     and  such  registration  is in  full  force  and  effect.  Each  registered
     representative and principal of the Company has at least the minimum series
     license  for  the  activities,  which  such  registered  representative  or
     principal, performs for the Company.

          c) The net  capital,  as such term is defined in Rule 15c3-1 under the
     Exchange Act, of the Company satisfies the minimum net capital requirements
     of the  Exchange  Act and of the  laws of any  jurisdiction  in  which  the
     Company conducts business, and has been sufficient to permit the Company to
     operate

                               Page 9 of 26 Pages
<PAGE>

     without  restriction  on its  ability  to expand  its  business  under NASD
     Conduct Rule 3130.

          d) To the best knowledge of the Seller and Company, the Company is not
     (a) subject to a  "statutory  disqualification"  as such term is defined in
     the Exchange Act, (b) ineligible to serve as a broker-dealer (c) subject to
     a  disqualification  that would be a basis for censure,  limitations on the
     activities,  functions or operations of, or suspension or revocation of the
     registration  of the Company as a broker  dealer,  under  Section 15 of the
     Exchange  Act and  there is no  reasonable  basis  for,  or  proceeding  or
     investigation,  whether  formal or  informal,  or  whether  preliminary  or
     otherwise,  that is  reasonably  likely to  result  in,  any such  censure,
     limitations, suspension or revocation.

     2.19 Compliance with Laws. Each of the Company,  and, to the best knowledge
of the Seller and Company, each of the Company's Directors and officers:

          a) Is in compliance  with all  applicable  federal,  state,  local and
     foreign statutes, laws, regulations,  ordinances,  rules, judgments, orders
     or decrees  applicable to the conduct of its businesses or to the employees
     conducting  such   businesses,   and  the  rules  of  all   Self-Regulatory
     Organization applicable thereto;

          b) Has all permits, licenses, authorizations, orders and approvals of,
     and has  made  all  fillings,  applications  and  registrations  with,  all
     Authorities and Self-Regulatory Organizations that are required in order to
     permit  them  to  own or  lease  their  properties  and  to  conduct  their
     businesses as presently conducted; all such permits, licenses, certificates
     of  authority,  orders and  approvals  are in full force and effect and are
     current and, to the best knowledge of the Seller and Company, no suspension
     or  cancellation  of any of them is threatened or is reasonably  likely and
     all such filings, applications and registrations are current;

          c) Has received,  since January 1, 2000,  no written  notification  or
     communication  (or, to the best  knowledge of the Seller and  Company,  any
     other communication) from any Authority of Self-Regulatory Organization (A)
     asserting  non-compliance  with any of the statues,  regulations,  rules or
     ordinances  that such Authority or Self Regulatory  Organization  enforces,
     (B) threatening any material  penalty or to revoke any license,  franchise,
     seat on any exchange, permit, or governmental authorization,  (C) requiring
     any of  them  (including  any of the  Company's  directors  or  controlling
     persons) to enter into a cease and desist order,  agreement,  or memorandum
     of understanding  (or requiring or disqualifying  their activities  (except
     for restrictions imposed by rule, regulation or policy), or (D) restricting
     or disqualifying their activities (except for restrictions imposed by rule,
     regulation or administrative policy on brokers or dealers generally);

          d) In not aware of any pending or threatened investigation,  review or
     disciplinary  proceedings by any Authority or Self-Regulatory  Organization
     against the Company, or any officer, director or employee thereof;

                              Page 10 of 26 Pages
<PAGE>

          e) Is not subject to any cease-and-desist or other order issued by, or
     a party to any  written  agreement,  consent  agreement  or  memorandum  of
     understanding  with,  or a  party  to  any  commitment  letter  or  similar
     undertaking to, or subject to any order or directive by, a recipient of any
     supervisory  letter  from or has  adopted  any  member  resolutions  at the
     request of, any Authority or Self-Regulatory  Organization, or been advised
     since  January 1, 2000, by any  Authority of  Self-Regulatory  Organization
     that it is  considering  issuing or requesting  any such agreement or other
     action  or  has   knowledge  of  any  pending  or   threatened   regulatory
     investigation; and

          f) Since January 1, 2000, has timely filed all reports,  registrations
     and  statements,  together  with any  amendments  required  to be made with
     respect  thereto,  that were required to be filed under any applicable law,
     regulation  or  rule,  with  (A)  any  applicable  Authority  and  (B)  any
     Self-Regulatory  Organization (collectively,  the "Company Reports"). As of
     their  respective  dates,  the Company Reports compiled with the applicable
     statutes,  rules,  regulations  and orders  enforced or  promulgated by the
     regulatory authority with which they were filed.

     2.20  Brokers.  Neither the  Company,  the Seller nor any of the  Company's
Directors  or officers has employed  any broker,  finder,  investment  banker or
financial advisor or incurred any liability for any brokerage fee or commission,
finder's fee or financial  advisory  fee, in  connection  with the  transactions
contemplated  hereby,  nor is there any basis  known to the Company for any such
fee or commission to be claimed by any person or entity.  Fees due to individual
third parties,  if any for any of the above will be the sole  responsibility  of
the Seller and the Seller  will  indemnify  the  purchaser  against  any and all
claims.

     2.21 Books and  Records.  To the best of Seller's  knowledge,  the books of
account,  minute books, and other records of the Company, all of which have been
made  available  to the  Purchaser,  are  complete  and correct in all  material
respects  and have  been  maintained  in  accordance  with  reasonable  business
practices. The minute books of the Company contain accurate and complete records
of all formal  meetings held, and action taken by, the Seller,  the Directors of
the Company and all committees thereof.  At the Closing,  all of those books and
records will be delivered to Purchaser.

     2.22 Business, Generally; Accuracy of Information. There has been no event,
transaction or information that has come to the attention of the Seller that, as
it relates  directly to the Company,  would,  individually  or in the aggregate,
reasonably  be expected to have a Material  Adverse  Effect on the  Company.  No
representation  or warranty made by the Seller or in this  Agreement,  or in any
document, agreement or certificate furnished or to be furnished to the Purchaser
at the Closing by or on behalf of the Company or the Seller in  connection  with
any of the transactions  contemplated by this Agreement contains or will contain
any untrue statement of material fact or omit or

                              Page 11 of 26 Pages
<PAGE>

will omit to state any material fact  necessary in order to make the  statements
herein or therein not misleading in light of the circumstances in which they are
made, and all of the foregoing  completely and correctly present the information
required or purported to be set forth herein or therein. The representations and
warranties  contained in this  Article 2 or  elsewhere in this  Agreement or any
document  delivered  pursuant  hereto will not be  affected or deemed  waived by
reason of the fact that the Purchaser or its representatives knew or should have
known that any such  representation or warranty is or might be inaccurate in any
respect.

     2.23  Audit  for  Year-End  2001:  The  Seller  will  incur and pay for the
required year-end audit by a CPA of the Purchaser's choice. Any expenses related
to the firm being  eligible for the change of  ownership  process will be at the
Seller's expense by a firm approved by the Purchaser.

                                    ARTICLE 3
                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     The Purchaser represents and warrants to the Seller as follows:

     3.1 Corporate Organization.  The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.

     3.2 Authorization.  The Purchaser has all the requisite corporate power and
authority  to  enter  into  this  Agreement  and to carry  out the  transactions
contemplated  herein.  The Board of  Directors  of the  Purchaser  has taken all
action required by law, its articles of incorporation and bylaws or otherwise to
authorize the execution, delivery and performance of this Agreement is the valid
and  binding  legal  obligation  of  the  Purchaser  enforceable  against  it in
accordance  with its  terms,  except as such  enforceability  may be  limited by
applicable  bankruptcy,  insolvency,  reorganization of similar laws that affect
creditors' rights generally.

     3.3 Non-Contravention.  Neither the execution,  delivery nor performance of
this Agreement nor the  consummation  of the  transactions  contemplated  herein
will:  (a) violate any provision of the articles of  incorporation  or bylaws of
the Purchaser; or (b) violate any Law of any Authority.

     3.4 Consents and Approvals. No Consent is required by any person or entity,
including  without  limitation any Authority,  in connection with the execution,
delivery and performance by the Purchaser of this Agreement, or the consummation
of the transactions  contemplated  herein,  other than any Consent which, if not
made or obtained,  will not,  individually or in the aggregate,  have a Material
Adverse Effect on the business of the Purchaser.

                              Page 12 of 26 Pages
<PAGE>

     3.5 Business Generally;  Accuracy of Information.  There has been no event,
transaction or information that has come to the attention of the Purchaser that,
as it relates directly to the Purchaser would, individually or in the aggregate,
reasonably be expected to have a Material  Adverse Effect on the  Purchaser.  No
representation  or warranty  made by the  Purchaser in this  Agreement or in any
document,  agreement,  or certificate furnished or to be furnished to the Seller
at the Closing by or on behalf of the  Purchaser in  connection  with any of the
transactions  contemplated by this Agreement contains or will contain any untrue
statement  of  material  fact or omit or will  omit to state any  material  fact
necessary in order to make the  statements  herein or therein not  misleading in
light of the  circumstances  in which  them are made,  and all of the  foregoing
completely and correctly present the information required or purported to be set
forth herein or therein.

                                    ARTICLE 4
                            COVENANTS OF THE PARTIES

     4.1 Conduct of  Business  of the  Company.Except  as  contemplated  by this
Agreement,  during the period  from the date of this  Agreement  to the  Closing
Date,  the Seller will cause the Company to conduct its business and  operations
according  to its ordinary  and usual  course of business  consistent  with past
practices,  to preserve  substantially intact its business  organizations and to
preserve its current  relationships with customers,  suppliers and other persons
with  which  it  has  significant  business  relations.   Without  limiting  the
generality of the foregoing, and, except as otherwise expressly provided in this
Agreement  prior to the Closing Date,  without the prior written  consent of the
Purchaser,  which consent will not be unreasonably  withheld,  the Seller agrees
that the Company will not:

          a) Amend its Articles of Incorporation;

          b) Increase in any manner the  compensation of any of its Directors or
     officers.

          c) Hire any personnel;

          d) Incur, assume,  suffer or become subject to, whether directly or by
     way of guarantee or otherwise,  any Liabilities  which,  individually or in
     the aggregate, would have a Material Adverse Effect on the Company.

          e) Cancel  any debts  accruing  to the  Company or waive any claims or
     rights, in each case, of substantial value;

          f) Make or enter into any commitment for capital expenditures;

                              Page 13 of 26 Pages
<PAGE>

          g) Pay, lend or advance any amount to, or sell, transfer any lease any
     properties or assets (real,  personal or mixed, tangible or intangible) to,
     or enter into any  agreement or  arrangement  with,  any of its officers or
     directors  or  any  affiliate  or  associate  of any  of  its  officers  or
     directors;

          h)  Terminate,  enter  into  or  amend  in any  material  respect  any
     contract,  agreement,  lease, license or commitment,  or take any action or
     omit to take any action  which will  cause a breach,  violation  or default
     (however  defined) under any such items,  except in the ordinary  course of
     business and consistent with past practice;

          i)  Acquire  any of the  business  or assets  of any  other  person or
     entity;

          j) Permit any of its current  insurance  policies to be  cancelled  or
     terminated   or  any  of  the   coverage   thereunder   to  lapse,   unless
     simultaneously  with such termination,  cancellation or lapse,  replacement
     policies  providing  coverage  equal to or greater than coverage  remaining
     under those cancelled, terminated or lapsed are in full force and effect;

          k) Suffer  any  adverse  change in its  relationship  with a  material
     customer,  including  the loss of any such customer or a contract with such
     customer;

          l) Enter into other material agreements,  commitments or contracts not
     in the ordinary course of business or in excess of current requirements;

          m) Settle or  compromise  any suite,  claim or  dispute or  threatened
     suite, claim or dispute;

          n) Make any change in its accounting methods,  principles or practices
     except as required by GAAP; or

          o) Agree in writing or otherwise to take any of the foregoing  actions
     or any  action,  which  would make any  representation  or warranty in this
     Agreement untrue or incorrect in any material respect.

     4.2 No Company Solicitation of Alternate Transaction.  The Seller will not,
and will ensure that the Company, the Company's  Directors,  officers and agents
will  not,  directly  or  indirectly,  solicit,  or  initiate  offers  from,  or
participate in any way in negotiations with,  provide any nonpublic  information
to, enter into any agreement with, or in any manner encourage,  discuss,  accept
or consider any proposal of, any third party relating to the  acquisition of the
Company, its assets or business, in whole or in part.

                              Page 14 of 26 Pages
<PAGE>

     4.3 Full Access to the  Purchaser.  Throughout the period prior to Closing,
the Seller will cause the Company to afford to the Purchaser and its  directors,
officers,  employees and other authorized representatives and agents, reasonable
access to the  facilities,  books and  records of the  Company in order that the
Purchaser  may have  full  opportunity  to make such  investigations  as it will
desire to make of the affairs of the Company;  provided that such investigations
do not  interfere  with the  Company's  current  future  ability to conduct  its
business.  The Company will furnish such additional financial and operating data
and other  information  as the  Purchaser  will,  from time to time,  reasonably
request;  provided,  however,  that any such  investigation  will not  affect or
otherwise  diminish  or obviate in any respect  any of the  representations  and
warranties of the Seller herein.

     4.4  Confidentiality.  Each of the parties  hereto  agrees that it will not
use,  or permit the use of, any of the  information  relating to any other party
hereto furnished to it in connection with the transactions  contemplated  herein
in a manner or for a purpose  detrimental  to such other party or otherwise than
in connection with the  transaction,  and that they will not disclose,  divulge,
provide or make  accessible or permit the disclosure of, any of the  information
to any  person or  entity,  other than  their  respective  directors,  officers,
employees,  and other authorized  representatives  and agents,  except as may be
required  by  judicial  or  administrative  process  or, in the  opinion of such
party's counsel, by other requirements of Law.

     4.5  Filings;  Consents;  Removal to  Objections.  Subject to the terms and
conditions  herein  provided,  the parties hereto will use their best efforts to
take or cause  to be taken  all  actions  and do or cause to be done all  things
necessary,  proper or advisable  under  applicable  Laws to consummate  and make
effective,  as soon as reasonably  practicable,  the  transactions  contemplated
hereby,  including  without  limitation  obtaining all Consents of any person or
entity,  whether  private  or  governmental,  required  in  connection  with the
consummation of the transactions contemplated herein. In furtherance, and not in
limitation of the  foregoing,  it is the intent of the parties to consummate the
transactions  herein at the earliest  practicable  time,  and they  respectively
agree to exert  commercially  reasonable  efforts to that end, including without
limitation:  (i) the removal or satisfaction,  if possible, of any objections to
the validity or legality of the transaction  contemplated  herein;  and (ii) the
satisfaction of the conditions to consummation of the transactions  contemplated
hereby.

                              Page 15 of 26 Pages
<PAGE>

     4.6 Further Assurances; Cooperation; Notification.

          a) Each party hereto will,  before, at and after Closing,  execute and
     deliver such  instruments and take such other actions as the other party or
     parties,  as the case may be, may reasonably  require in order to carry out
     the  intent of this  Agreement.  Without  limiting  the  generality  of the
     foregoing,  at any time after the Closing, at the reasonable request of the
     Purchaser and without  further  consideration,  the Seller and Company will
     execute  and  deliver  such  instruments  of  sale,  transfer,  conveyance,
     assignment  and  confirmation  and take such  action as the  Purchaser  may
     reasonably  deem  necessary  or  desirable  in  order  to more  effectively
     consummate the transaction contemplated hereby. The Purchaser, on or before
     the Closing shall enter into an agreement for services with RND  Resources,
     Inc.  to,  among  other  things,  use the  service  of Dave  Banerjee  as a
     principal of the Company.

          b) The Seller and Company will cause the Company to cooperate with the
     Purchaser  to promptly  develop  plans for the  management  of the business
     after  the  Closing,   including  without   limitation  plans  relating  to
     productivity, marketing, operations and improvements.

          c) At all times  from the date of this  Agreement  until the  Closing,
     each party will promptly  notify the other in writing of the  occurrence of
     any event which it  reasonably  believes will or may result in a failure by
     such party to satisfy the conditions specified in this Article 4.

     4.7 Public  Announcements.  None of the parties hereto will make any public
announcement  with respect to the transactions  contemplated  herein without the
prior written consent of the other parties. Any of the parties hereto may at any
time make any  announcements  that are required by applicable Law so long as the
party  so  required  to make an  announcement  promptly  upon  learning  of such
requirement  notifies the other parties of such  requirement  and discusses with
the  other  parties  in good  faith  the  exact  proposed  wording  of any  such
announcement.

     4.8 Tax Matters.

          a) No new  elections  by or on behalf of the Company  with  respect to
     Taxes, or any changes in current  elections with respect to Taxes,  will be
     made after the date of this Agreement  without the prior written consent of
     the Purchaser.

                              Page 16 of 26 Pages
<PAGE>

          b) The Seller will on the Closing Date provide the Purchaser  with any
     clearance  certificates  or similar  documents  that may be required by any
     state taxing  Authority in order to relieve the Purchaser of any obligation
     to withhold  any portion of the purchase  price or to assume any  Liability
     with respect to sales taxes attributable to operations of the Company prior
     to the Closing Date.

          c) The Seller will pay any sales,  use,  transfer or documentary taxes
     and recording and filing fees applicable to the  transactions  contemplated
     by this Agreement.

          d) The Purchaser and the Company will file and control any Tax Returns
     required to be filed by the Company for periods  beginning  on or after the
     Closing Date.  The Seller  agrees that it will provide,  and will cause its
     accountants  and other  representatives  to provide,  to the Purchaser on a
     timely basis the information,  including but not limited to all work papers
     and records  relating to the Company,  that it or the  accountants or other
     representatives  have  within  their  control  and that  may be  reasonably
     necessary ore related to: (i) the  preparation  of any and all tax Returns,
     information  returns and reports  required to be filed by the  Purchaser or
     the  Company  with  governmental  agencies;  and (ii)  audits  or other tax
     determinations  or proceeding by or before such agencies,  such information
     to be provided in the form in which it has in the past been  maintained  by
     the Company, its accountants or other representatives.

     4.10 Satisfaction of Conditions Precedent. Each party will use commercially
reasonable  efforts to satisfy or cause to be  satisfied  all of the  conditions
precedent  that  are   applicable  to  them,  and  to  cause  the   transactions
contemplated  by this Agreement to be  consummated,  and,  without  limiting the
generality of the foregoing,  to obtain all material consents and authorizations
of third  parties and to make  filings  with,  and give all  notices  to,  third
parties  that may be necessary  or  reasonably  required on its part in order to
effect the transactions contemplated hereby.

                                    ARTICLE 5
                   CONDITIONS TO THE PURCHASER'S OBLIGATIONS.

     Notwithstanding any other provision of this Agreement to the contrary,  the
obligation of the Purchaser to effect the transactions  contemplated herein will
be  subject to the  satisfaction  at or prior to the  Closing,  or waiver by the
Purchaser, of each of the following conditions:

                              Page 17 of 26 Pages
<PAGE>

     5.1 Representations and Warranties True. The representations and warranties
of the Seller and Company  contained in this Agreement,  will be true,  complete
and  accurate  as of the date when made and at and as of such  time,  except for
changes  specifically  permitted or contemplated  by this Agreement,  and except
insofar as the  representations  and warranties relate expressly and solely to a
particular  date or period,  in which case they will be true and  correct at the
Closing with respect to such date or period.

     5.2 Performance. The Seller and Company will have performed and complied in
all material respects with all agreements, covenants, obligations and conditions
required by this  Agreement to be  performed  or complied  with by the Seller or
Company on or prior to the Closing.

     5.3 Required Approvals and Consents.

          a) All action  required by law and otherwise to be taken by the Seller
     to authorize the execution,  delivery and performance of this Agreement and
     the  consummation of the  transactions  contemplated  hereby will have been
     duly and validly taken.

          b)  All  Consents  of or  from  all  Authorities  and  Self-Regulatory
     Organizations   required   hereunder   to   consummate   the   transactions
     contemplated  herein, will have been delivered,  made or obtained,  and the
     Purchaser will have received copies thereof.

     5.4  Agreements  and  Documents.  The  Purchaser  will  have  received  the
following  agreements  and  documents,  each of which  will be in full force and
effect:

               (i)  Resignations,  effective  as of  the  Closing  Date,  of all
          Directors  or  officers  of the  Company  as may be  requested  by the
          Purchaser in writing prior to the Closing.

     5.5 Adverse  Changes.  No material adverse change will have occurred in the
business  financial  condition,  prospects,  assets or operations of the Company
since the date of this Agreement.

     5.6 No Proceeding or Litigation. No suit, action, investigation, inquiry or
other proceeding by any Authority or other person or entity will have instituted
or  threatened  which  delays or  questions  the  validity  or  legality  of the
transaction contemplated hereby or which, if successfully asserted,  would, in a
reasonable  judgment  of  the  Purchaser,  individually  or  in  the  aggregate,
otherwise have a Material  Adverse Effect on the Company's  business,  financial
condition,  prospects, assets or operations or prevent or delay the consummation
of the transactions contemplated by this Agreement.

     5.7 Legislation.  No Law will have been enacted which prohibits,  restricts
or delays the consummation of the transactions contemplated hereby or any of the
conditions to the consummation of such transaction.

                              Page 18 of 26 Pages
<PAGE>

     5.8 Due  Diligence.  The  Purchaser  will have  completed its due diligence
investigation  of the Company to its  complete  satisfaction,  including  but no
limited to (i) a  satisfactory  verification  by the  Purchaser of the financial
statements of the Company,  (ii) a satisfactory review of the Company's existing
customers, contracts and obligations.

     5.9 Appropriate  Documentation.The  Purchaser will have received, in a form
and substance reasonably satisfactory to the Purchaser,  dated the Closing Date,
all certificates  and other documents,  instruments and writings to evidence the
fulfillment  of the  conditions set forth in this Article 5 as the Purchaser may
reasonably request.

     5.10 No Third-Party  Interest.  Immediately  prior to the Closing,  all the
outstanding Stock in the Company will be owned beneficially and of record by the
Seller,  and no third party will have any  options,  warrants or other rights to
acquire any membership or other interest in the Company.

                                    ARTICLE 6
                    CONDITIONS TO OBLIGATIONS OF THE SELLER.

     Notwithstanding  anything in this Agreement to the contrary, the obligation
of the Company  and the Seller to effect the  transactions  contemplated  herein
will be subject to the  satisfaction  at or prior to the  Closing of each of the
following conditions:

     6.1 Representations and Warranties True. The representations and warranties
of the Purchaser contained in this Agreement will be true, complete and accurate
as of  the  date  when  made  and  at and as of  the  Closing,  as  though  such
representations  and  warranties  were made at and as of such  time,  except for
changes  permitted or contemplated in this Agreement,  and except insofar as the
representations  and warranties relate expressly and solely to a particular date
or period,  in which  case they will be true and  correct  at the  Closing  with
respect to such date or period.

     6.2  Performance.  The  Purchaser  will have  performed and complied in all
material  respects with all  agreements,  covenants,  obligations and conditions
required by this  Agreement to be performed or complied with by the Purchaser at
or prior to the Closing.

     6.3 Corporate  Approvals.  All action  required to be taken by the Board of
Directors of the Purchaser to authorize the execution,  delivery and performance
of this  Agreement by the Purchaser  and the  consummation  of the  transactions
contemplated hereby will have been duly and validly taken.

     6.4 Adverse  Changes.  No material adverse change will have occurred in the
business, financial condition,  prospects, assets or operations of the Purchaser
since the date of this Agreement.

                              Page 19 of 26 Pages
<PAGE>

     6.5 No Proceeding or Litigation. No suit, action, investigation, inquiry or
other  proceeding  by any  Authority  or other  person or entity  will have been
instituted or  threatened  which delays or questions the validity or legality of
the transactions  contemplated hereby or which, if successfully asserted,  would
individually  or in the aggregate,  otherwise have a Material  Adverse Effect on
the Purchaser's business, financial condition, prospects, assets or operations.

                                    ARTICLE 7
                          TERMINATION AND ABANDONMENT.

     7.1 Termination by Mutual Consent.  This Agreement may be terminated at any
time prior to the Closing by written consent of the Seller and the Purchaser.

     7.2 Termination by the Purchaser.  This Agreement may also be terminated at
any time prior to the Closing Date by the Purchaser  without penalty if: (i) the
Seller  or  Company  have  failed  to  comply  in any  respect  with  any of the
convenants,  conditions or agreements contained in this Agreement required to be
performed or complied  with by the Seller prior to the Closing Date; or (ii) any
representation  or  warranty of the Seller  contained  in this  Agreement  is or
becomes untrue or incorrect  (except for changes permitted by this Agreement and
those  representations  which address  matters only as of a particular date that
remain true and correct as of such date); or (iii) the transactions contemplated
by this Agreement have not been approved by the NASD despite a good faith effort
on the part of the Purchaser to obtain such approval.

     7.3  Termination by the Seller.  This Agreement may be terminated  prior to
the Closing Date by the Seller if: (i) the Purchaser has failed to comply in any
respect with any of the convenants,  conditions or agreements  contained in this
Agreement  required to be performed on or complied with the  Purchaser  prior to
the Closing Date; (ii) any representation or warranty of the Purchaser contained
in this  Agreement  is or  becomes  untrue  or  incorrect  (except  for  changes
permitted by this Agreement and those  representations  which address matters as
of a  particular  date that remain true and correct as of such date);  (iii) the
transactions  contemplated  hereby  are not  approved  by the NASD on or  before
November 9, 2001  unless the  Purchaser  elects to extend the Closing  Date to a
date not later than the 60th day after the date of this Agreement.

     7.4  Procedures and Effect of  Termination.  In the event of termination of
this Agreement and abandonment of the  transactions  contemplated  hereby by the
Seller  or the  Purchaser  pursuant  to this  Article  7,  this  Agreement  will
terminate  (except  to the  extent  provided  in  Section  8,1  hereof)  and the
transactions  contemplated  hereby will be abandoned,  without further action by
any of the parties hereto. If this Agreement is terminated as provided herein:

                              Page 20 of 26 Pages
<PAGE>

          a) Each of the  parties  will,  upon  request,  return all  documents,
     workpapers  and  other  material  of  the  other  parties  relating  to the
     transactions  contemplated  hereby,  whether  obtained  before or after the
     execution hereof, to the party furnishing the same;

          b)  No  party   will   have  any   liability   for  a  breach  of  any
     representation,  warranty,  agreement,  covenant or the  provision  of this
     Agreement,  unless such breach was due to a willful or bad faith  action or
     omission  of  such  party  or  any  representative,   agent,   employee  or
     independent  contractor  thereof,  and  except  for  such  representations,
     warranties  and covenants  that will survive  termination of this Agreement
     pursuant to Section 8.1; and

          c) All filings,  applications  and other  submissions made pursuant to
     the terms of this agreement will, to the extent  practicable,  be withdrawn
     from the agency or other person to which made.

                                    ARTICLE 8
                                    SURVIVAL

     8.1 Survivals of Representations,  Warranties and Covenants; Investigation.
The representations, warranties and covenants of each of the parties hereto will
survive the Closing for a period of one (1) year thereafter except that: (i) the
representations  and warranties of the Seller contained in Sections 2.3 and 2.10
will survive forever;  and (ii) the representations and warranties of the Seller
contained  in Sections  2.4 and 2.12 will survive  until the  expiration  of all
applicable statutory limitation periods, plus sixty (60) days. The covenants and
agreements  contained  herein  will  survive  the  Closing  forever,  unless the
convenant  or  agreement  specifies  a term,  in which  case such  convenant  or
agreement will survive for such specified term and will thereon expire.

                                    ARTICLE 9
                            MISCELLANEOUS PROVISIONS

     9.1 Expenses.  The Purchaser  and the Seller  (including  the Company) will
each bear their own costs and expenses relating to the transactions contemplated
hereby,  including  without  limitation,  fees ad  expenses  of  legal  counsel,
accountants,   investment  bankers,  brokers  or  finders,  printers,   copiers,
consultants or other  representatives  for the services used, hired or connected
with the transactions  contemplated hereby. Except for those expenses to be paid
by the Seller,  as  specifically  described in Sections 2.23 and 4.8 (c) of this
Agreement.

     9.2 Amendments and Modification.  Subject to applicable Law, this Agreement
may be amended or modified by the parties hereto at any time with respect to any
of the

                              Page 21 of 26 Pages
<PAGE>

terms  contained  herein;  provided,  however,  that  all  such  amendments  and
modifications must be in writing duly executed by all of the parties hereto.

     9.3 Waiver of Compliance;  Consents.  Any failure to a party to comply with
any obligation,  covenant, agreement or condition herein may be expressly waived
in writing by the party entitled hereby to such  compliance,  but such waiver or
failure  to  insist  upon  strict  compliance  with such  obligation,  covenant,
agreement or condition will not operate as a waiver of, or estoppel with respect
to, any subsequent or other failure. No single or partial exercise of a right or
remedy will preclude any other or further exercise thereof or of any other right
or of any other right or remedy hereunder.  Whenever this Agreement  requires or
permits the consent by or on behalf of a party,  such  consent  will be given in
writing in the same manner as for waivers of compliance.

     9.4 No Third Party  Beneficiaries.  Nothing in this  Agreement will entitle
any person or entity  (other than a party hereto and his, her or its  respective
successors and assigns permitted hereby) to any claim,  cause of action,  remedy
or right of any kind.

     9.5  Notices.  All  notices,  requests,  demands  and other  communications
required or  permitted  hereunder  will be made in writing and will be deemed to
have been duly given and  effective:  (i) on the date of delivery,  if delivered
personally;  (ii) on the  earlier of the fourth  (4th) day after  mailing or the
date of the return  receipt  acknowledgement,  if mailed,  postage  prepaid,  by
certified or registered mail, return receipt requested;  or (iii) on the date of
transmission, if sent by facsimile,  telecopy, telegraph, telex or other similar
telegraphic communications equipment.

     If to the Seller or Company:

                            Spider Securities, Inc.
                            Independent Advantage Financial & Insurance Services
                            330 Washington Blvd

                            Marina Del Rey, CA 90292
                            Attn: Dudley Muth Esq/ Jeanne Beytin
                            Phone: (310) 821-1600
                            Fax: (310) 821-1114

     If to the Purchaser:

                            RateXchange Corporation
                            100 Pine Street, Suite 500
                            San Francisco, CA 94111
                            Attn: Jon Merriman/ Christopher Aguilar
                            Phone:  (415) 274-5650
                            Fax: (415) 274-5651

Or to such other  person or address  as either  the  Company or the Seller  will
furnish  to the  other  parties  hereto  in  writing  in  accordance  with  this
subsection.

                              Page 22 of 26 Pages
<PAGE>

     9.6  Assignment.  This Agreement and all of the  provisions  hereof will be
binding upon and inure to the benefit of the parties hereto and their respective
successors  and  permitted  assigns,  but neither this  Agreement nor any of the
rights, interest or obligations hereunder will be assigned (whether voluntarily,
involuntarily,  by operation of law or otherwise)  by any of the parties  hereto
without the prior written consent of the other parties.

     9.7 Governing Law. This Agreement and the legal relations among the parties
hereto  will be  governed  by and  construed  in  accordance  with the  internal
substantive  laws of the  State of  California  (without  regard  to the laws of
conflict  that  might  otherwise  apply)  as to all  maters,  including  without
limitation matters of validity, construction, effect, performance and remedies.

     9.8 Counterparts.  This Agreement may be executed  simultaneously in one or
more  counterparts,  each of which will be deemed an original,  but all of which
together will constitute one and the same instrument.

     9.9  Headings.  The table of contents  and the headings of the sections and
subsections  of this  Agreement are inserted for  convenience  only and will not
constitute a part hereof.

     9.10 Entire Agreement.  This Agreement, and the exhibits and other writings
referred to in this  Agreement or any such exhibit or other  writing are part of
this Agreement,  together they embody the entire agreement and  understanding of
the parties hereto in respect of the transactions contemplated by this Agreement
and together they are referred to as this "Agreement" or the "Agreement."  There
are  no   restrictions,   promises,   warranties,   agreements,   covenants   or
undertakings,  other  than  those  expressly  set forth or  referred  to in this
Agreement.  This Agreement  supersedes all prior  agreements and  understandings
between the parties with respect to the transaction or transactions contemplated
by this Agreement.  Provisions of this Agreement will be interpreted to be valid
and enforceable under applicable Law to the extent that such interpretation does
not materially alter this Agreement;  provided,  however, that if such provision
becomes  invalid or  unenforceable  under  applicable Law such provision will be
stricken to the extent  necessary and the remainder of such  provisions  and the
remainder of this Agreement will continue in full force and effect.

     9.11  Remedies and  Injunctive  Relief.  It is  expressly  agreed among the
parties  hereto that monetary  damages would be inadequate to compensate a party
hereto for any breach by any other party of its  covenants  in Article 4 hereof.
Accordingly,  the  parties  agree and  acknowledge  that any such  violation  or
threatened  violation  will cause  irreparable  injury to the other and that, in
injunctive  relief  against  the  threatened  breach of  Article 4 hereof or the
continuation  of any such breach without the necessity of proving actual damages
and may seek to specifically enforce the terms thereof.

                              Page 23 of 26 Pages
<PAGE>

     Notwithstanding  anything contained in this Agreement to the contrary,  the
Company and the Seller,  on the one hand, and the Purchaser,  on the other hand,
will only have the right to make a claim  against  the other for  damages if the
non-claiming   party  has   willfully  and   materially   breached  any  of  its
representations,  convenants  or  agreements  set forth in this  Agreement.  For
purposes of this  provision,  a party will be deemed to have willfully  breached
any of its representations,  covenants or agreements set forth in this Agreement
if such party has  intentionally  and  knowingly  taken,  or  intentionally  and
knowingly  failed  to take,  any  action  that  causes  a  breach  of any of its
covenants or  agreements  set forth in this  Agreement.  No party hereto will be
entitled to rescind this Agreement after the Closing.

     9.12 Definition of Material Adverse Effect.  "Material Adverse Effect" with
respect to the Company means an individual  or cumulative  adverse  change in or
effect on the business, customers, customer relations,  operations,  properties,
working  capital  condition  (financial  or  otherwise),  assets,  properties or
liabilities  of the Company taken as a whole that is  reasonably  expected to be
materially  adverse  to the  business,  properties,  working  capital  condition
(financial or otherwise), assets, or liabilities of the Company taken as a whole
or would prevent the Company or the Seller from  consummating  the  transactions
contemplated hereby.

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

INDEPENDENT ADVANTAGE                      RATEXCHANGE CORPORATION
FINANCIAL & INSURANCE
SERVICES, INC.

By:___________________________             By:____________________________

Its:__________________________             Its:___________________________

INSTREAM SECURITIES, INC.
f.n.a. SPIDER SECURITIES, INC.

By:___________________________

Its:__________________________

                              Page 24 of 26 Pages
<PAGE>

                                    EXHIBIT A

         Authorized Shares of Spider Securities, Inc.                  100,000

         Issued and Outstanding Shares of Spider Securities, Inc.       45,919

                              Page 25 of 25 Pages

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