Document:

EXHIBIT 10.12

                            STOCK PURCHASE AGREEMENT

                                     Between

                      BLACKWATER CAPITAL PARTNERS II, L.P.

                                       and

                          ONESOURCE TECHNOLOGIES, INC.

Dated as of May 26, 1999

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                                TABLE OF CONTENTS

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<S>                                                                             <C>
                                                                                Page

SECTION 1  DEFINITIONS                                                           1

SECTION 2  SALE AND TRANSFER OF SHARES; CLOSING                                  7
    Section 2.1         Shares                                                   7
    Section 2.2         Purchase Price                                           7
    Section 2.3         Closing                                                  8
    Section 2.4         Closing Obligations                                      8
    Section 2.5         Use of Funds                                             8
    Section 2.6         Investor's Rights                                        9
    Section 2.7         Corporate Governance                                     9
    Section 2.8         Corporate Governance                                     9

SECTION 3  REPRESENTATIONS AND WARRANTIES OF THE COMPANY                         9
    Section 3.1         Authority                                                9
    Section 3.2         Shares                                                   9
    Section 3.3         Organization and Good Standing; Qualification.           9
    Section 3.4         Capitalization; Agreements Regarding Capital Stock      10
    Section 3.5         Subsidiaries                                            10
    Section 3.6         Governmental Consents                                   10
    Section 3.7         No Conflict                                             11
    Section 3.8         Financial Statements                                    12
    Section 3.9         Books and Records                                       12
    Section 3.10        Title to Properties; Encumbrances                       13
    Section 3.11        Condition and Sufficiency of Assets                     13
    Section 3.12        No Undisclosed Liabilities                              13
    Section 3.13        Taxes                                                   13
    Section 3.14        No Material Adverse Change                              14
    Section 3.15        Compliance with Legal Requirements; Governmental
                        Authorizations                                          14
    Section 3.16        Legal proceedings; Orders                               15
    Section 3.17        Absence of Certain Changes and Events                   15
    Section 3.18        Contracts; No Defaults                                  16
    Section 3.19        Environmental Matters                                   17
    Section 3.20        Employees                                               17
    Section 3.21        Labor Relations; Compliance                             18
    Section 3.22        Intellectual Property                                   18
    Section 3.23        Certain Payments                                        20
    Section 3.24        Disclosure                                              20
    Section 3.25        Relationships with Related Persons                      21
    Section 3.26        Offering                                                21
    Section 3.27        Brokers or Finders                                      21

SECTION 4  REPRESENTATIONS AND WARRANTIES OF THE INVESTOR                       21
    Section 4.1         Organization and Good Standing                          21
    Section 4.2         Authority; No Conflict                                  21
    Section 4.3         Investment Representations                              22
    Section 4.4         Certain Proceedings                                     23
    Section 4.5         Brokers or Finders                                      23
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<TABLE>
<S>                                                                             <C>
SECTION 5  CONDITIONS PRECEDENT TO THE INVESTOR'S OBLIGATION TO CLOSE           23
    Section 5.1         Accuracy of Representations                             23
    Section 5.2         The Company's Performance                               23
    Section 5.3         Additional Documents                                    23
    Section 5.4         No Proceedings                                          24
    Section 5.5         No Claim Regarding Stock Ownership or Sale Proceeds     24
    Section 5.6         No Prohibition                                          24
    Section 5.7         No Material Adverse Change                              24

SECTION 6  COVENANTS OF THE COMPANY PRIOR TO CLOSING DATE AND OTHER AGREEMENTS  25
    Section 6.1         Access and Investigation                                25
    Section 6.2         Negative Covenant                                       25
    Section 6.3         Required Approvals                                      25
    Section 6.4         Notification                                            25
    Section 6.5         No Negotiation                                          25
    Section 6.6         Best Efforts                                            26

SECTION 7  COVENANTS OF THE INVESTOR PRIOR TO CLOSING DATE                      26
    Section 7.1         Approvals of Governmental Bodies                        26
    Section 7.2         Best Efforts                                            26

SECTION 8  CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATION TO CLOSE            26
    Section 8.1         Accuracy of Representations                             26
    Section 8.2         The Investor's Performance                              26
    Section 8.3         Additional Documents                                    26
    Section 8.4         No Injunction                                           27

SECTION 9  TERMINATION                                                          27
    Section 9.1         Termination Events                                      27
    Section 9.2         Effect of Termination                                   27

SECTION 10  GENERAL PROVISIONS                                                  28
    Section 10.1        Expenses                                                28
    Section 10.2        Public Announcements                                    28
    Section 10.3        Confidentiality                                         28
    Section 10.4        Notices                                                 29
    Section 10.5        Jurisdiction; Service of Process                        29
    Section 10.6        Further Assurances                                      29
    Section 10.7        Waiver                                                  29
    Section 10.8        Entire Agreement and Modification                       30
    Section 10.9        Disclosure Schedules                                    30
    Section 10.10       Assignments, Successors, and No Third-Party Rights      30
    Section 10.11       Severability                                            30
    Section 10.12       Section Headings, Construction                          30
    Section 10.13       Time of Essence                                         31
    Section 10.14       Governing Law                                           31
    Section 10.15       Counterparts                                            31
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                            STOCK PURCHASE AGREEMENT

           This Stock  Purchase  Agreement  ("Agreement")  is made as of May 26,
1999 between Blackwater Capital Partners II, L.P. a Delaware limited partnership
(the "Investor"), and OneSource Technologies,  Inc., a Delaware corporation (the
"Company").

                                    RECITALS

           The Company  desires to sell,  and the Investor  desires to purchase,
2,905,828  shares of the authorized but unissued  common stock,  par value $.001
per share (the "Common Stock") of the Company (collectively,  the "Shares"), for
the consideration and on the terms set forth in this Agreement.

                                    AGREEMENT

           The parties, intending to be legally bound, agree as follows:

                              1SECTION DEFINITIONS

           For purposes of this Agreement, the following terms have the meanings
set forth below:

           "Ancillary  Agreements"  shall have the  meaning set forth in Section
3.1.

           "Applicable  Contract"  shall mean any  Contract  (a) under which the
Company has or may  acquire  any rights,  (b) under which the Company has or may
become  subject to any  obligation or liability,  or (c) by which the Company or
any of the assets owned or used by it is or may become bound.

           "Balance Sheet" shall have the meaning set forth in Section .

           "Best Efforts" shall mean the efforts that a prudent Person  desirous
of  achieving a result  would use in similar  circumstances  to ensure that such
result is achieved as expeditiously as possible.

           "Breach"  shall  mean  a  "Breach"  of  a  representation,  warranty,
covenant,  obligation,  or other  provision of this  Agreement or any instrument
delivered  pursuant to this Agreement,  which will be deemed to have occurred if
there is or has been (a) any  inaccuracy  in or  breach  of, or any  failure  to
perform or comply with, such representation,  warranty, covenant, obligation, or
other  provision,  or (b) any  claim  (by any  Person)  or other  occurrence  or
circumstance  that is or was inconsistent  with such  representation,  warranty,
covenant,  obligation,  or other provision, and the term "Breach" means any such
inaccuracy, breach, failure, claim, occurrence, or circumstance.

           "Closing" shall have the meaning set forth in Section 2.3.

           "Closing  Date"  shall mean the date and time as of which the Closing
actually takes place.

           "Common  Stock"  shall have the meaning set forth in the  Recitals of
this Agreement.

           "Company"  shall have the meaning set forth in the first paragraph of
this Agreement.

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           "Consent" shall mean any approval, consent, ratification,  waiver, or
other authorization (including any Governmental Authorization).

           "Contemplated  Transactions"  shall  mean  all  of  the  transactions
contemplated by this Agreement, including:

               (a)  the sale of the Shares by the Company to the Investor;

               (b)  the execution,  delivery,  and performance of the Investor's
                    Rights Agreement;

               (c)  the execution and delivery of this Agreement;

               (d)  the  performance  by the  Investor  and the Company of their
                    respective  covenants and obligations  under this Agreement;
                    and

               (e)  the Investor's acquisition and ownership of the Shares.

           "Contract" shall mean any agreement, contract,  obligation,  promise,
or undertaking  (whether written or oral and whether express or implied) that is
legally binding.

           "Deposit" shall have the meaning set forth in Section .

           "Disclosure  Schedules" shall mean the disclosure schedules delivered
by the Company to the Investor  concurrently  with the execution and delivery of
this  Agreement;  provided,  however,  that the  Company  shall  deliver  to the
Investor any disclosure schedules not delivered by the Company concurrently with
the execution and delivery of this Agreement as soon as practicable,  and in any
event prior to the Closing pursuant to this Agreement.

           "Encumbrance"  shall  mean  any  charge,  claim,  community  property
interest,   condition,   equitable  interest,  lien,  option,  pledge,  security
interest,  right of first refusal,  or  restriction  of any kind,  including any
restriction  on use,  voting,  transfer,  receipt of income,  or exercise of any
other attribute of ownership.

           "Environment"  shall mean soil,  land surface or  subsurface  strata,
surface  waters  (including  navigable  waters,  ocean waters,  streams,  ponds,
drainage  basins,  and wetlands),  groundwaters,  drinking water supply,  stream
sediments,  ambient air (including  indoor air),  plant and animal life, and any
other environmental medium or natural resource.

           "Environmental Law" shall mean any Legal Requirement that requires or
relates to:

               (a)  advising appropriate authorities,  employees, and the public
                    of intended or actual  releases of  pollutants  or hazardous
                    substances or materials,  violations of discharge limits, or
                    other  prohibitions and of the  commencements of activities,
                    such as resource extraction or construction, that could have
                    significant impact on the Environment;

               (b)  preventing or reducing to  acceptable  levels the release of
                    pollutants  or hazardous  substances  or materials  into the
                    Environment;

               (c)  reducing  the   quantities,   preventing  the  release,   or
                    minimizing the hazardous  characteristics of wastes that are
                    generated;

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               (d)  assuring that products are designed,  formulated,  packaged,
                    and used so that they do not present  unreasonable  risks to
                    human health or the Environment when used or disposed of;

               (e)  protecting resources, species, or ecological amenities;

               (f)  reducing  to  acceptable  levels the risks  inherent  in the
                    transportation of hazardous substances,  pollutants, oil, or
                    other potentially harmful substances;

               (g)  cleaning up pollutants  that have been released,  preventing
                    the threat of release,  or paying the costs of such clean up
                    or prevention; or

               (h)  making responsible parties pay private parties, or groups of
                    them,  for damages done to their health or the  Environment,
                    or permitting  self-appointed  representatives of the public
                    interest to recover for injuries done to public assets.

           "Financial  Statements"  shall have the  meaning set forth in Section
3.7.

           "GAAP"  shall  mean  generally   accepted  United  States  accounting
principles,  applied on a basis  consistent  with the basis on which the Balance
Sheet and the other financial statements referred to in Section were prepared.

           "Governmental   Authorization"  shall  mean  any  approval,  consent,
franchise,  license,  permit,  waiver, or other authorization  issued,  granted,
given, or otherwise made available by or under the authority of any Governmental
Body or pursuant to any Legal Requirement.

           "Governmental Body" shall mean any:

               (a)  nation,  state,  county, city, town, village,  district,  or
                    other jurisdiction of any nature;

               (b)  federal,   state,  local,   municipal,   foreign,  or  other
                    government;

               (c)  governmental or  quasi-governmental  authority of any nature
                    (including  any  governmental  agency,  branch,  department,
                    official, or entity and any court or other tribunal);

               (d)  multi-national organization or body; or

               (e)  body    exercising,    or   entitled   to   exercise,    any
                    administrative,  executive, judicial,  legislative,  police,
                    regulatory, or taxing authority or power of any nature.

           "Intellectual  Property  Assets"  shall have the meaning set forth in
Section 3.22.

           "Interim Balance Sheet" shall have the meaning set forth in Section .

           "Investor" shall have the meaning set forth in the first paragraph of
this Agreement;  provided,  however,  that Blackwater  Capital Partners II, L.P.
shall have the right to assign its rights and obligations  under this Agreement.
In the event Blackwater Capital Partners II, L.P. so elects, then Investor shall
refer instead to such assignee.

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           "IRC" shall mean the Internal  Revenue Code of 1986 or any  successor
law, and regulations  issued by the IRS pursuant to the Internal Revenue Code or
any successor law.

           "IRS" shall mean the United States  Internal  Revenue  Service or any
successor agency,  and, to the extent relevant,  the United States Department of
the Treasury.

           "Knowledge"   shall  mean  an  individual  will  be  deemed  to  have
"Knowledge" of a particular fact or other matter if:

               (a)  such  individual  is  actually  aware of such  fact or other
                    matter; or

               (b)  a  prudent  individual  could be  expected  to  discover  or
                    otherwise  become  aware of such fact or other matter in the
                    course   of    conducting   a    reasonably    comprehensive
                    investigation concerning the existence of such fact or other
                    matter.

           A  Person  (other  than  an  individual)   will  be  deemed  to  have
"Knowledge"  of a  particular  fact or other  matter  if any  individual  who is
serving,  or who  has at any  time  served,  as a  director,  officer,  partner,
executor,  or trustee of such Person (or in any similar capacity) has, or at any
time had, Knowledge of such fact or other matter.

           "Legal Requirement" shall mean any federal,  state, local, municipal,
foreign,   international,   multinational,   or  other   administrative   order,
constitution,  law, ordinance, principle of common law, regulation,  statute, or
treaty.

           "Monthly  Payment  Date"  shall have the meaning set forth in Section
2.2(a).

           "Order" shall mean any award, decision, injunction,  judgment, order,
ruling,  subpoena,  or verdict entered,  issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.

           "Ordinary  Course of Business" shall mean an action taken by a Person
will be deemed to have been taken in the "Ordinary Course of Business" only if:

               (a)  such action is  consistent  with the past  practices of such
                    Person  and is taken in the  ordinary  course of the  normal
                    day-to-day operations of such Person;

               (b)  such action is not required to be authorized by the board of
                    directors  of such  Person  (or by any  Person  or  group of
                    Persons exercising similar authority); and

               (c)  such  action is similar in nature and  magnitude  to actions
                    customarily taken, without any authorization by the board of
                    directors  (or by any Person or group of Persons  exercising
                    similar  authority),  in the  ordinary  course of the normal
                    day-to-day  operations of other Persons that are in the same
                    line of business as such Person.

           "Organizational Documents" shall mean (a) the articles or certificate
of incorporation and the bylaws of a corporation;  (b) the partnership agreement
and any  statement  of  partnership  of a general  partnership;  (c) the limited
partnership  agreement and the  certificate of limited  partnership of a limited
partnership;  (d) any charter or similar document adopted or filed in connection
with the creation, formation, or organization of a Person; and (e) any amendment
to any of the foregoing.

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           "Person"  shall  mean  any  individual,  corporation  (including  any
non-profit  corporation),  general or  limited  partnership,  limited  liability
company, joint venture, estate, trust, association,  organization,  labor union,
or other entity or Governmental Body.

           "Proceeding"  shall mean any  action,  arbitration,  audit,  hearing,
investigation,  litigation,  or suit (whether civil,  criminal,  administrative,
investigative,  or  informal)  commenced,  brought,  conducted,  or  heard by or
before, or otherwise involving, any Governmental Body or arbitrator.

           "Related Person" shall mean with respect to a particular individual:

               (a)  each other member of such individual's Family;

               (b)  any Person that is directly or indirectly controlled by such
                    individual  or one or  more  members  of  such  individual's
                    Family;

               (c)  any  Person in which  such  individual  or  members  of such
                    individual's  Family hold (individually or in the aggregate)
                    a Material Interest; and

               (d)  any Person with respect to which such  individual  or one or
                    more  members  of  such  individual's  Family  serves  as  a
                    director,  officer,  partner,  executor, or trustee (or in a
                    similar capacity).

           With respect to a specified Person other than an individual:

               (a)  any Person that directly or indirectly controls, is directly
                    or  indirectly  controlled  by, or is directly or indirectly
                    under common control with such specified Person;

               (b)  any Person that holds a Material  Interest in such specified
                    Person;

               (c)  each Person that  serves as a  director,  officer,  partner,
                    executor,  or  trustee  of such  specified  Person  (or in a
                    similar capacity);

               (d)  any Person in which such  specified  Person holds a Material
                    Interest;

               (e)  any  Person  with  respect to which  such  specified  Person
                    serves as a general  partner  or a trustee  (or in a similar
                    capacity); and

               (f)  any Related Person of any individual described in clause (b)
                    or (c).

           For purposes of this  definition,  (a) the "Family" of an  individual
includes (i) the individual,  (ii) the  individual's  spouse and former spouses,
(iii)  any  other  natural  person  who  is  related  to the  individual  or the
individual's  spouse within the second degree, and (iv) any other natural person
who resides with such  individual,  and (b) "Material  Interest" means direct or
indirect  beneficial  ownership  (as defined in Rule 13d-3 under the  Securities
Exchange  Act  of  1934)  of  voting   securities  or  other  voting   interests
representing at least 10% of the outstanding  voting power of a Person or equity
securities  or  other  equity  interests   representing  at  least  10%  of  the
outstanding equity securities or equity interests in a Person.

<PAGE>

           "Representative"  shall mean with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors.

           "Securities  Act" shall mean the  Securities Act of 1933, as amended,
or any successor law, and  regulations  and rules issued pursuant to that Act or
any successor law.

           "Shares"  shall have the  meaning  set forth in the  Recitals of this
Agreement.

           "Tax  Return"  shall  mean  any  return  (including  any  information
return),  report,  statement,  schedule,  notice,  form,  or other  document  or
information  filed  with or  submitted  to,  or  required  to be  filed  with or
submitted  to,  any  Governmental  Body in  connection  with the  determination,
assessment,  collection,  or  payment  of any  Tax  or in  connection  with  the
administration,  implementation,  or enforcement of or compliance with any Legal
Requirement relating to any Tax.

           "Threatened"  shall mean a claim,  Proceeding,  dispute,  action,  or
other matter will be deemed to have been "Threatened" if any demand or statement
has been made (orally or in writing) or any notice has been given  (orally or in
writing),  or if any other event has occurred or any other circumstances  exist,
that  would lead a prudent  Person to  conclude  that such a claim,  Proceeding,
dispute, action, or other matter is likely to be asserted,  commenced, taken, or
otherwise pursued in the future.

                  1SECTION SALE AND TRANSFER OF SHARES; CLOSING

1.1 Section Shares.  Subject to the terms and conditions of this  Agreement,  at
the Closing, the Company will sell and transfer the Shares to the Investor,  and
the Investor will purchase the Shares from the Company.

1.1 Section Purchase Price.  The Investor shall pay an aggregate  purchase price
of $750,000.00,  or approximately  $0.2581 per share, (the "Purchase Price") for
the Shares to the Company by check as follows:
1.2
1.3 (a) $105,000 of the Purchase  shall be paid at the  Closing.  The  remaining
$645,000  shall be paid in (i) five  equal  monthly  installments  of  $105,000,
without  interest (each, a "Monthly  Payment"),  commencing on July 1, 1999, and
continuing  on the  first day of each of the four  months  thereafter  (each,  a
"Monthly  Payment Date") and (ii) a final Monthly Payment of $120,000 payable on
the final Monthly Payment Date.
1.4
1.5 (b) The Investor's obligation to make a Monthly Payment on a Monthly Payment
Date is subject to the following conditions:
1.6
1.7 (i)  Each  representation  and  warranty  set  forth  in  Section  3 of this
Agreement shall be accurate in all material  respects as of such Monthly Payment
Date as if made on such Monthly Payment Date (giving effect to any supplement to
the Disclosure Schedules provided by the Company).
1.8
1.9 (ii) There shall not have been any material  adverse change in the financial
condition,  property, business,  operations,  properties,  prospects, assets, or
condition of the Company,  since the date of the Agreement,  nor shall any event
have occurred or circumstance  exist that may result in such a material  adverse
change.

<PAGE>

1.10
1.11 (c) For any unfunded  balance of the Purchase  Price,  Investor shall remit
pro rata to the  Company  the  number of  Shares  deriving  from  such  unfunded
balance,  which shares  shall become  treasury  shares of the  Company's  Common
Stock.
1.12
1.13  Section  Closing . The  purchase  and sale of the Shares  (the  "Closing")
provided for in this  Agreement will take place at the offices of the Investor's
counsel at One East Camelback,  Suite 400, Phoenix, Arizona on or before May 26,
1999 or at such other time and place as the parties may agree,  either orally or
in writing.  Subject to the  provisions of Section , failure to  consummate  the
purchase and sale  provided  for in this  Agreement on the date and at the place
determined  pursuant to this Section 2.3 will not result in the  termination  of
this  Agreement  and will not  relieve  any party of any  obligation  under this
Agreement.
1.14
1.15  Section Closing Obligations.  At the Closing:
1.16
(a)   The Company will deliver to the Investor:
(b)
(i) certificates  representing  the Shares,  issued in the name of the Investor;
(ii) (iii) an Investor's  Rights  Agreement in the form of Exhibit A executed by
the Company (the "Investor's  Rights  Agreement");  and (iv) (v) a Stockholders'
Agreement  in the form of Exhibit B  executed  by  certain  stockholders  of the
Company and by the Company (the  "Stockholders'  Agreement");  and (vi) (vii) If
the date of execution  hereof and the Closing Date are different,  a certificate
executed by the Company representing and warranting to the Investor that each of
the Company's  representations  and warranties in this Agreement was accurate in
all respects as of the date of this Agreement and is accurate in all respects as
of the Closing  Date as if made on the Closing  Date  (giving full effect to any
supplements  to the  Disclosure  Schedules that were delivered by the Company to
the Investor prior to the Closing Date in accordance with Section ).

(a)   The Investor will deliver to the Company:
(b)
(i) a check in the amount of $105,000  made payable to the  Company;  (ii) (iii)
the Investor's Rights Agreement executed by the Investor;  and (iv) (v) (iii) if
the date of execution  hereof and the Closing Date are different,  a certificate
executed by the Investor to the effect that,  except as otherwise stated in such
certificate,  each of the  Investor's  representations  and  warranties  in this
Agreement  was accurate in all respects as of the date of this  Agreement and is
accurate in all respects as of the Closing Date as if made on the Closing Date.
(vi)
1.2 Section Use of Funds . The Company  must use the  $750,000 it receives  from
the  Investor   pursuant  to  this  Agreement  for  fees  associated  with  this
transaction, working capital, audit fees and capital expenditures.
1.3

<PAGE>

1.4 Section  Investor's  Rights . The  Company  grants to the  Investor  certain
registration  and other rights that are more fully  described in the  Investor's
Rights  Agreement  between the Company  and the  Investor  attached as Exhibit A
hereto.
1.5
1.6    Section Corporate Governance.  The Company will cause Steven R. Green and
Norman E. Clarke to be appointed to its Board of Directors.
1.7
1.8 Section  Corporate  Governance  . As a condition  to the  execution  of this
Agreement by the Investor,  the Company and certain  stockholders of the Company
shall  enter into the  Stockholders'  Agreement  attached as Exhibit B hereto to
establish the composition of the Board of Directors of the Company.
1.9
2  SECTION   REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Investor as follows:

1.1 Section  Authority . All  corporate  action on the part of the Company,  its
officers, directors and stockholders necessary for the authorization,  execution
and  delivery  of  this  Agreement,   the  Investor's  Rights   Agreement,   the
Stockholders'  Agreement and any other agreement to which the Company is a party
the  execution  and  delivery of which is  contemplated  hereby (the  "Ancillary
Agreements") has been taken.  This Agreement,  the Investor's  Rights Agreement,
the Stockholders'  Agreement and the Ancillary Agreements  constitute the legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance  with their  terms.  The Company has the  absolute  and  unrestricted
right, power, authority and capacity to execute and deliver this Agreement,  the
Investor's  Rights  Agreement,  the  Stockholders'  Agreement  and the Ancillary
Agreements and to perform its obligations  under this Agreement,  the Investor's
Rights Agreement, the Stockholders' Agreement and the Ancillary Agreements.
1.2
1.3 Section Shares . The Company has the absolute and unrestricted right, power,
authority  and capacity to issue and sell the Shares.  Except for the legend set
forth in the  Investor's  Rights  Agreement  will appear  upon the  certificates
representing  the  Shares,  no  legend  or  other  reference  to  any  purported
Encumbrance will appear upon any certificate representing any of the Shares. All
of the Shares,  when issued,  sold and delivered in accordance with the terms of
this Agreement for the consideration  set forth herein,  will be duly authorized
and  validly  issued,  fully  paid  and  non-  assessable,  and  will be free of
restrictions  on transfer other than any  restrictions  on transfer set forth in
this Agreement and the Investor's  Rights  Agreement and under  applicable state
and federal  securities  laws.  Except as set forth on  Schedule  3.2 hereto and
except for this  Agreement,  there are no  Contracts  relating to the  issuance,
sale, or transfer of any equity securities of the Company.
1.4
1.5    Section Organization and Good Standing; Qualification.

(a) The Company is a corporation duly organized,  validly existing,  and in good
standing under the laws of Delaware with full  corporate  power and authority to
conduct its business as it is now being conducted,  to own or use the properties
and assets that it purports  to own or use,  and to perform all its  obligations
under  Applicable  Contracts.  The Company is duly qualified to do business as a
foreign corporation in Arizona,  California,  Nevada, New Mexico and Utah and is
in good  standing  under the laws of each state or other  jurisdiction  in which
either the ownership or use of the properties owned or used by it, or the nature
of the activities conducted by it, requires such qualification.

<PAGE>

(b)
(c)     Attached as Schedule   are true and correct copies of the Organizational
Documents of the Company, as currently in effect.
(d)
1.2     Section Capitalization; Agreements Regarding Capital Stock .
1.3
(a)     The authorized capital of the Company consists of:
(b)
(i)     Common Stock.  20,000,000  shares  of  common stock, par value $.001 per
share, of  which  11,623,311 shares  are  issued and outstanding, and 14,529,139
shares will be issued and outstanding immediately after the Closing.
(ii)
(iii) Preferred Stock.  1,000,000 shares of preferred stock, par value $.001 per
share,  of which no shares  have been  designated  and no shares  are issued and
outstanding.
(iv)

(v) No legend or other reference to any purported  Encumbrance  appears upon any
certificate   representing  equity  securities  of  the  Company.  None  of  the
outstanding  equity securities or other securities of the Company were issued in
violation of the Securities Act or any other Legal Requirement.

(vi)
(c) Set  forth on  Schedule  3.4(b)  is a true and  correct  description  of all
agreements, rights or other Contracts pursuant to which any Person has the right
to: (i) acquire from the Company, by purchase, exercise, exchange, conversion or
otherwise,  any equity or other  security of the Company or the right to acquire
any such security; (ii) cause the Company to register,  under the Securities Act
or otherwise,  any securities of the Company; or (iii) vote or direct the voting
of any class of  capital  stock of the  Company  or  appoint  any  member of the
Company's board of directors.
(d)
1.4  Section  Subsidiaries  . The Company  does not own or control,  directly or
indirectly,  nor does it have any Contract to acquire,  any equity securities or
other  securities  of any Person or any direct or indirect  equity or  ownership
interest in any other  business.  The Company is not a participant  in any joint
venture partnership or similar agreement.
1.5
1.6 Section Governmental Consents . No consent, approval,  qualification,  order
or authorization of, or filing with, any local,  state, or federal  governmental
authority  is  required  on the  part of the  Company  in  connection  with  the
Company's  valid  execution,  delivery,  or performance of this Agreement or the
offer, sale or issuance of the Shares by the Company except such filings as have
been made prior to the Closing,  except any notices of sale required to be filed
with the Securities and Exchange Commission under Regulation D of the Securities
Act, or such  post-closing  filings as may be required  under  applicable  state
securities  laws,  which  will be timely  filed  within the  applicable  periods
therefor.  The  Company  has not  offered  shares  of its  Common  Stock  or any
substantially  similar  securities  of the Company for sale to, or solicited any
offers to buy from, or otherwise  approached  or  negotiated in respect  thereof
with,  any person  other than the  Investors  and the Company  will not take any
action that will cause the  issuance  and delivery of the shares of its Stock as
contemplated hereby to constitute a violation of the Securities Act.
1.7
1.8    Section No Conflict .
1.9
(a)    The Company is not in violation or default in any material respect of any
provision  of the  Organizational  Documents  of the Company or in any  material
respect of any  provision  of any Contract to which it is a party or by which it
is bound or, of any Legal Requirement applicable to the Company.

<PAGE>

(b)
(c) Except as set forth on Schedule  3.7(b) , neither the execution and delivery
of this Agreement nor the consummation or performance of any of the Contemplated
Transactions  will,  directly or indirectly  (with or without notice or lapse of
time):
(d)
(i)  contravene, conflict with, or result in a violation of (A) any provision of
the  Organizational  Documents of the Company,  or (B) any resolution adopted by
the Board of Directors or the stockholders of the Company;
(ii)
(iii)  contravene,  conflict  with,  or  result in a  violation  of, or give any
Governmental Body or other Person the right to challenge any of the Contemplated
Transactions  or to exercise  any remedy or obtain any relief  under,  any Legal
Requirement  or any Order to which the  Company,  or any of the assets  owned or
used by the Company, may be subject;
(iv)
(v)  contravene,  conflict with, or result in a violation of any of the terms or
requirements  of, or give any Governmental  Body the right to revoke,  withdraw,
suspend,  cancel,  terminate, or modify, any Governmental  Authorization that is
held by the Company or that otherwise  relates to the business of, or any of the
assets owned or used by, the Company;
(vi)
(vii)  cause the  Investor  or the  Company to become  subject  to, or to become
liable for the payment of, any Tax;
(viii)
(ix) cause any of the assets owned by the Company to be  reassessed  or revalued
by any taxing authority or other Governmental Body;
(x)
(xi)  contravene,  conflict  with,  or  result in a  violation  or breach of any
provision  of, or give any Person the right to declare a default or exercise any
remedy under,  or to accelerate  the maturity or  performance  of, or to cancel,
terminate, or modify, any Applicable Contract; or
(xii)
(xiii) (vii) result in the  imposition  or creation of any  Encumbrance  upon or
with respect to any of the assets owned or used by the Company.
(xiv)
(xv) The  Company  shall not or will not be  required  to give any  notice to or
obtain any Consent from any Person in connection with the execution and delivery
of this Agreement or the  consummation or performance of any of the Contemplated
Transactions.
(xvi)
1.10 Section  Financial  Statements . The Company has reviewed (a) the report of
the Company as at (the "Balance Sheet") and the related statements of operations
and cash flow for the year ended in the period ended  December 31, 1998,  (b) an
unaudited balance sheet of the Company (the "Interim Balance Sheet") as at March
31, 1999 (the  "Interim  Balance  Sheet Date") and (c) the  Company's  unaudited
statements  of  operations  and cash  flows for the  three  months  then  ended,
including  in each case the notes  thereto  (the  "Financial  Statements").  The
Balance  Sheet has been audited by King,  Weber &  Associates,  P.C. The Balance
Sheet (i) does not  contain any items of special or  nonrecurring  income or any
other income not earned in the ordinary  course of business  except as expressly
specified  therein and (ii) fairly  presents  the  financial  condition  and the
results of operations,  changes in  stockholders'  equity,  and cash flow of the
Company as at the respective

<PAGE>

dates of and for the periods referred to in such financial  statements,  and the
Interim Balance Sheet includes all adjustments,  which consist only of recurring
accruals,  necessary  for such  fair  presentation.  Except  as set forth in the
Financial  Statements,  the Company has no material  liabilities,  contingent or
otherwise,  other  than (i)  liabilities  incurred  in the  ordinary  course  of
business and (ii)  obligations  under contracts and commitments  incurred in the
ordinary course of business and not required under generally accepted accounting
principles to be reflected in the Financial  Statements,  which,  in both cases,
individually or in the aggregate, are not material to the financial condition or
operating  results  of  the  Company.  Except  as  disclosed  in  the  Financial
Statements,  the Company is not a guarantor or indemnitor of any indebtedness of
any other person, firm, or corporation.  The Company maintains and will continue
to maintain a standard  system of accounting  established  and  administered  in
accordance with generally accepted accounting principles.
1.11
1.12  Section  Books and Records . The books of  account,  minute  books,  stock
record  books,  and other  records of the  Company,  all of which have been made
available to the Investor,  are complete and correct and have been maintained in
accordance  with  sound  business  practices  and the  requirements  of  Section
13(b)(2) of the  Securities  Exchange  Act of 1934,  as amended  (regardless  of
whether  or  not  the  Company  is  subject  to  that  Section),  including  the
maintenance of an adequate system of internal controls.  The minute books of the
Company  contain  accurate  and complete  records of all  meetings  held of, and
corporate  action  taken by,  the  stockholders,  the Boards of  Directors,  and
committees of the Boards of Directors of the Company, and no meeting of any such
stockholders,  Board of Directors,  or committee has been held for which minutes
have not been prepared and are not contained in such minute books.
1.13
1.14  Section  Title to  Properties;  Encumbrances  . The Company  does not own,
directly or indirectly,  any real property.  The Company owns all the properties
and assets (whether real, personal, or mixed and whether tangible or intangible)
that it purports to own, including all of the properties and assets reflected in
the Balance  Sheet and the Interim  Balance  Sheet (except for assets held under
capitalized  leases and personal  property  sold since date of the Balance Sheet
and the Interim  Balance  Sheet,  as the case may be, in the Ordinary  Course of
Business),  and all of the properties and assets purchased or otherwise acquired
by the Company since the date of the Balance Sheet (except for personal property
acquired and sold since the date of the Balance Sheet in the Ordinary  Course of
Business and consistent with past practice).  All material properties and assets
reflected in the Balance Sheet and the Interim  Balance Sheet are free and clear
of all  Encumbrances  except (a)  mortgages or security  interests  shown on the
Balance Sheet or the Interim Balance Sheet as securing specified  liabilities or
obligations,  with  respect to which no default (or event  that,  with notice or
lapse of time or both,  would  constitute a default)  exists,  (b)  mortgages or
security  interests  incurred  in  connection  with the  purchase of property or
assets after the date of the Interim  Balance Sheet (such mortgages and security
interests being limited to the property or assets so acquired),  with respect to
which no default  (or event that,  with  notice or lapse of time or both,  would
constitute a default) exists, and (c) liens for current taxes not yet due.
1.15
1.16 Section  Condition and Sufficiency of Assets . All items of equipment owned
or leased by the Company are in good  operating  condition  and repair,  and are
adequate  for the uses to which they are being put, and none of such items is in
need of  maintenance  or repairs except for ordinary,  routine  maintenance  and
repairs that are not material in nature or cost.
1.17
1.18 Section No  Undisclosed  Liabilities  . The Company has no  liabilities  or
obligations  of any nature  (whether  known or  unknown  and  whether  absolute,
accrued, contingent, or otherwise)

<PAGE>

except for liabilities or obligations  reflected or reserved against on the face
of the Balance Sheet or the Interim Balance Sheet  (excluding the notes thereto)
and current  liabilities  incurred in the Ordinary  Course of Business since the
date thereof.
1.19
1.20   Section Taxes .
1.21
(a) The  Company  has  filed or  caused  to be filed on a timely  basis  all Tax
Returns that are or were  required to be filed by or with respect to it,  either
separately  or as a member of a group of  corporations,  pursuant to  applicable
Legal Requirements.  The Company has paid, or made provision for the payment of,
all Taxes that have or may have  become  due  pursuant  to those Tax  Returns or
otherwise,  or pursuant to any assessment  received by the Company,  except such
Taxes,  if any, as are being  contested  in good faith and as to which  adequate
reserves  (determined in accordance with GAAP) have been provided in the Balance
Sheet and the Interim  Balance Sheet.
(b)
(c) No United States  federal or state income Tax Return of the Company has been
audited by the IRS or relevant state tax authorities.  The Company has never had
any tax deficiency proposed or assessed against it. The Company has not given or
been  requested  to give waivers or  extensions  (or is or would be subject to a
waiver or  extension  given by any other  Person) of any statute of  limitations
relating  to the payment of Taxes of the Company or for which the Company may be
liable.
(d)
(e) The charges,  accruals, and reserves with respect to Taxes on the respective
books of the Company are adequate  (determined in accordance  with GAAP) and are
at least  equal to that the  Company's  liability  for  Taxes.  There  exists no
proposed tax  assessment  against the Company except as disclosed in the Balance
Sheet.  All Taxes that the Company is or was required by Legal  Requirements  to
withhold  or collect  have been duly  withheld or  collected  and, to the extent
required, have been paid to the proper Governmental Body or other Person.
(f)
(g) All Tax  Returns  filed by (or that  include  on a  consolidated  basis) the
Company are true, correct, and complete.  There is no tax sharing agreement that
will require any payment by the Company  after the date of this  Agreement.  The
Company is not, or within the five- year period  preceding  the Closing Date has
not been, an "S"  corporation or a collapsible  corporation  pursuant to Section
1362(a) or Section 341(f) of the IRC.
(h)
1.22 Section No Material  Adverse Change. Since the date of the Interim  Balance
Sheet,  there  has  not  been  any  material  adverse  change  in the  business,
operations,  properties,  prospects, assets, or condition of the Company, and no
event has  occurred  or  circumstance  exists that may result in such a material
adverse change.
1.23
1.24 Section Compliance with Legal  Requirements;  Governmental  Authorizations.
(i) The  Company  is, and at all times  since its  inception  has been,  in full
compliance with each Legal Requirement that is or was applicable to it or to the
conduct or  operation  of its  business  or the  ownership  or use of any of its
assets;
(ii)
(iii) no event has occurred or circumstance  exists that (with or without notice
or lapse of time) (A) may constitute or result in a violation by the Company of,
or a failure on the part of the Company to comply with,  any Legal  Requirement,
or (B) may give rise to any  obligation on the part of the Company to undertake,
or to bear all or any portion of the cost of, any remedial action of any nature;
and

<PAGE>

(iv)
(v) The Company has not received any notice or other communication (whether oral
or written)  from any  Governmental  Body or any other Person  regarding (A) any
actual, alleged, possible, or potential violation of, or failure to comply with,
any Legal  Requirement,  or (B) any  actual,  alleged,  possible,  or  potential
obligation  on the  part of the  Company  to  undertake,  or to bear  all or any
portion  of the  cost of,  any  remedial  action  of any  nature.
(vi)
(b)  Each  Governmental  Authorization  that  is  held  by the  Company  or that
otherwise  relates to the business of, or to any of the assets owned or used by,
the  Company  is valid  and in full  force  and  effect,  and such  Governmental
Authorizations  collectively  constitute all of the Governmental  Authorizations
necessary to permit the Company to lawfully  conduct and operate its  businesses
in manner it currently  conducts and operates such  businesses and to permit the
Company to own and use its assets in the manner in which it  currently  owns and
uses such assets.  The Company is not in default under any of such  Governmental
Authorization.
(c)
(d) The Company is not aware of any proposed  Legal  Requirement  which would be
applicable to the Company's  business,  operations or properties and which might
adversely  affect the  Company's  prospects,  operations or  properties,  either
before or after the Closing.
(e)
1.2    Section Legal proceedings; Orders.
1.3
(a) There is no pending  Proceeding  that has been  commenced  by or against the
Company or that  otherwise  relates to or may affect the business of, any of the
assets owned or used by, or the current equity  ownership of the Company or that
challenges, or that may have the effect of preventing, delaying, making illegal,
or otherwise  interfering  with, any of the  Contemplated  Transactions.  To the
Knowledge  of the  Company,  except  as set  forth  on  Schedule  , (1) no  such
Proceeding has been  Threatened,  and (2) no event has occurred or  circumstance
exists  that may give  rise to or serve as a basis for the  commencement  of any
such  Proceeding.  The  Company  has  delivered  to the  Investor  copies of all
pleadings,  correspondence,  and other  documents  relating  to each  Proceeding
listed on Schedule . The Proceedings listed on Schedule will not have a material
adverse effect on the business,  operations,  assets, condition, or prospects of
the Company.  The foregoing  includes,  without  limitation,  any action,  suit,
proceeding, or investigation pending or currently threatened involving the prior
employment of any of the Company's  employees,  their use in connection with the
Company's business of any information or techniques allegedly proprietary to any
of their former  employers,  their  obligations  under any agreements with prior
employers,  or  negotiations  by the  Company  with  potential  backers  of,  or
Investor's in, the Company or its proposed business.
(b)
(c) There is no Order to which the  Company,  or any of the assets owned or used
by the Company, is subject and no officer,  director,  agent, or employee of the
Company is subject to any Order that prohibits such officer, director, agent, or
employee  from  engaging in or  continuing  any conduct,  activity,  or practice
relating to the business of the Company.
(d)
1.4 Section  Absence of Certain  Changes and Events . Since the Interim  Balance
Sheet Date, the Company has conducted its businesses only in the Ordinary Course
of Business and there has not been any:
1.5
(a) change in the Company's  authorized or issued  capital  stock;  grant of any
stock  option or right to  purchase  shares  of  capital  stock of the  Company;

<PAGE>

issuance of any  security  convertible  into such  capital  stock;  grant of any
registration rights; purchase,  redemption,  retirement, or other acquisition by
the Company of any shares of any such capital  stock;  or declaration or payment
of any dividend or other distribution or payment in respect of shares of capital
stock;
(b)
(c) amendment to the Organizational Documents of the Company;
(d)
(e) adoption of, or increase in the  payments to or benefits  under,  any profit
sharing, bonus, deferred compensation,  savings, insurance, pension, retirement,
or other employee benefit plan for or with any employees of the Company;
(f)
(g) damage to or  destruction  or loss of any asset or property of the  Company,
whether or not covered by  insurance,  materially  and  adversely  affecting the
properties,  assets, business, financial condition, or prospects of the Company,
taken as a whole;
(h)
(i) entry  into,  termination  of, or  receipt of notice of  termination  of any
license, distributorship,  dealer, sales representative,  joint venture, credit,
or similar agreement, or any Contract or transaction involving a total remaining
commitment by or to the Company of at least $50,000;
(j)
(k) sale (other than sales of  inventory in the  Ordinary  Course of  Business),
lease, or other disposition of any asset or property of the Company or mortgage,
pledge,  or imposition of any lien or other encumbrance on any material asset or
property of the Company,  including,  without  limitation,  the sale,  lease, or
other disposition of any of the Intellectual Property Assets;
(l)
(m)  cancellation  or waiver of any claims or rights with a value to the Company
in excess of $50,000;
(n)
(o) material change in the accounting methods used by the Company; or
(p)
(q)  agreement,  whether  oral  or  written,  by  the  Company  to do any of the
foregoing.
(r)
1.6 Section Contracts; No Defaults .

1.7
(a) No officer,  director,  agent,  employee,  consultant,  or contractor of the
Company is bound by any  Contract  that  purports  to limit the  ability of such
officer,  director, agent, employee,  consultant, or contractor to (A) engage in
or continue any conduct,  activity,  or practice relating to the business of the
Company,  or (B) assign to the Company or to any other  Person any rights to any
invention, improvement, or discovery.
(a) Each  Contract  of the  Company is in full force and effect and is valid and
enforceable  in  accordance  with its terms.
(b)

(i) The  Company  is, and at all times  since its  inception  has been,  in full
compliance  with all applicable  terms and  requirements  of each Contract under
which the Company has or had any obligation or liability or by which the Company
or any of the assets owned or used by the Company is or was bound;

<PAGE>

(ii)
(iii) each other Person that has or had any  obligation  or liability  under any
Contract  under  which the  Company or had any rights is, and at all times since
its  inception  has  been,  in full  compliance  with all  applicable  terms and
requirements of such Contract;
(iv)
(v) no event has occurred or circumstance exists that (with or without notice or
lapse of time) may contravene, conflict with, or result in a violation or breach
of,  or give the  Company  or other  Person  the right to  declare a default  or
exercise any remedy under,  or to accelerate the maturity or performance  of, or
to cancel, terminate, or modify, any Applicable Contract; and
(vi)
(vii) The  Company has not given to or received  from any other  Person,  at any
time since any notice or other communication (whether oral or written) regarding
any actual,  alleged,  possible, or potential violation or breach of, or default
under, any Contract.
(viii)
(c) The Company has not entered into any agreement,  Contract or  understanding,
written or oral,  with any Person  regarding the possible  acquisition of all or
any portion of the  business of such  Person  obligating  the Company to proceed
with any  acquisition  or to take any other action.  All  discussions  with such
Persons may be terminated by the Company without penalty or cost to the Company.
(d)
1.2 Section  Environmental  Matters . The Company is, and at all times has been,
in full  compliance  with, and has not been and is not in violation of or liable
under, any Environmental Law.
1.3    Section Employees .
1.4
(a) No employee or director of the Company is a party to, or is otherwise  bound
by, any agreement or arrangement, including any confidentiality, noncompetition,
or proprietary rights agreement  ("Proprietary Rights Agreement"),  between such
employee or director and any other Person that in any way  adversely  affects or
will affect (i) the  performance of his duties as an employee or director of the
Company,  or (ii) the ability of the Company to conduct its business,  including
any  Proprietary  Rights  Agreement  with the Company or by any such employee or
director.  To the Company's  Knowledge,  no officer or other key employee of the
Company intends to terminate his employment with the Company.
(b)
(c) To the best of the  Company's  knowledge,  no  employee of the Company is or
will be in  violation  of any  judgment,  decree,  or order,  or any term of any
employment contract, patent disclosure agreement, or other contract or agreement
relating to the relationship of any such employee with the Company, or any other
party because of the nature of the business  conducted or presently  proposed to
be  conducted  by the  Company or to the use by the  employee of his or her best
efforts with respect to such business. The Company is not aware that any officer
or key employee, or that any group of key employees,  intends to terminate their
employment  with he Company,  nor does the Company  have a present  intention to
terminate the employment of any of the foregoing.  Subject to general principles
related to wrongful of employees, the employment of each officer and employee of
the Company is terminable at the will of the Company.
(d)
1.5 Section Labor Relations; Compliance . The Company has not been or is a party
to any collective bargaining or other labor Contract.  There has not been, there
is not  presently  pending or  existing,  and there is not  Threatened,  (a) any
strike, slowdown,  picketing,  work stoppage, or employee grievance process, (b)
any  Proceeding  against  or  affecting  the  Company  relating  to the  alleged
violation of any Legal  Requirement  pertaining to labor relations or employment
matters,

<PAGE>

including  any  charge  or  complaint  filed by an  employee  or union  with the
National Labor Relations Board, the Equal Employment Opportunity Commission,  or
any comparable  Governmental Body,  organizational  activity,  or other labor or
employment dispute against or affecting the Company or its premises,  or (c) any
application for  certification  of a collective  bargaining  agent. No event has
occurred  or  circumstance  exists  that  could  provide  the basis for any work
stoppage or other labor  dispute.  There is no lockout of any  employees  by the
Company,  and no such action is  contemplated  by the  Company.  The Company has
complied in all respects  with all Legal  Requirements  relating to  employment,
equal employment  opportunity,  nondiscrimination,  immigration,  wages,  hours,
benefits,  collective  bargaining,  the payment of social  security  and similar
taxes,  occupational safety and health, and plant closing. The Company is liable
for the payment of any compensation,  damages, taxes, fines, penalties, or other
amounts,  however  designated,  for failure to comply with any of the  foregoing
Legal Requirements.
1.6
1.7                  Section Intellectual Property .
1.8
(a)  Intellectual  Property  Assets.  The term  "Intellectual  Property  Assets"
includes the following to the extent  owned,  used or licensed by the Company as
licensee or licensor:
(i) the name  "OneSource"  and all  fictional  business  names,  trading  names,
registered  and  unregistered   trademarks,   service  marks,  and  applications
(collectively,  "Marks");
(ii)
(iii) all patents, patent applications,  and inventions and discoveries that may
be patentable (collectively, "Patents");
(iv)

(v)  all  copyrights  in  both  published  works  and  unpublished   works
(collectively,   "Copyrights");
(vi)
(vii) all know-how,  trade secrets,  confidential  information,  customer lists,
software, technical information,  data, process technology, plans, drawings, and
blue prints (collectively, "Trade Secrets").
(viii)

(b) Know-How  Necessary for the Business.  The Intellectual  Property Assets are
all  those  necessary  for the  operation  of the  Company's  business  as it is
currently conducted.  The Company is the owner of all right, title, and interest
in and to each of the Intellectual Property Assets, free and clear of all liens,
security interests, charges,  encumbrances,  equities, and other adverse claims,
and  has  the  right  to  use  without  payment  to a  third  party  all  of the
Intellectual Property Assets.
(c)
(d) Patents.
(e)
(i) The Company is the owner of all right, title, and interest in and to each of
the  Patents,  free  and  clear  of  all  liens,  security  interests,  charges,
encumbrances, equities, and other adverse claims.
(ii)
(iii) All Patents that have been  registered  with the United  States Patent and
Trademark Office are currently in compliance with all formal legal  requirements
(including  the  timely  post-registration  filing  of  affidavits  of  use  and
incontestability and renewal applications),  are valid and enforceable,  and are
not  subject  to any  maintenance  fees or taxes or actions  falling  due within
ninety days after the Closing Date.

<PAGE>

(iv)
(v) No Patent has been or is now involved in any  opposition,  invalidation,  or
cancellation and, to the Company's Knowledge,  no such action is Threatened with
the respect to any of the Patents.
(vi)
(vii) To the Company's Knowledge,  there is no potentially interfering trademark
or trademark  application of any third party. (viii) (ix) No Patent is infringed
or, to the Company's  Knowledge,  has been  challenged or threatened in any way.
None of the Patents used by the Company  infringes or is alleged to infringe any
trade  name,  trademark,  or  service  Patent of any third  party.  (x) (xi) All
products and materials  containing a Patent bear the proper federal registration
notice where permitted by law.
(xii)
(f)      Trademarks.
(g)
(i) The Company is the owner of all right, title, and interest in and to each of
its  Marks,  free  and  clear  of  all  liens,   security  interests,   charges,
encumbrances, equities, and other adverse claims.
(ii)
(iii) All Marks  that have been  registered  with the United  States  Patent and
Trademark Office are currently in compliance with all formal legal  requirements
(including  the  timely  post-registration  filing  of  affidavits  of  use  and
incontestability and renewal applications),  are valid and enforceable,  and are
not  subject  to any  maintenance  fees or taxes or actions  falling  due within
ninety days after the Closing Date.
(iv)
(v) No Mark has been or is now  involved  in any  opposition,  invalidation,  or
cancellation and, to the Company's Knowledge,  no such action is Threatened with
the respect to any of the Marks.
(vi)
(vii) To the Company's Knowledge,  there is no potentially interfering trademark
or trademark  application  of any third party.  (viii) (ix) No Mark is infringed
or, to the Company's  Knowledge,  has been  challenged or threatened in any way.
None of the Marks used by the Company  infringes  or is alleged to infringe  any
trade name, trademark, or service mark of any third party. (x) (xi) All products
and  materials  containing a Mark bear the proper  federal  registration  notice
where permitted by law.
(xii)
(h)    Trade Secrets.
(i)
(i) With respect to each Trade Secret, the documentation  relating to such Trade
Secret is current,  accurate,  and  sufficient in detail and content to identify
and  explain  it and to allow its full and proper use  without  reliance  on the
knowledge  or memory of any  individual.
(ii)
(iii) The Company has taken all  reasonable  precautions to protect the secrecy,
confidentiality, and value of its Trade Secrets.

<PAGE>

(iv)
(v) The Company has good title and an absolute (but not  necessarily  exclusive)
right to use the Trade  Secrets.  The Trade  Secrets  are not part of the public
knowledge or literature,  and, to the Company's  Knowledge,  have not been used,
divulged,  or  appropriated  either  for the  benefit  of any  Person  or to the
detriment of the Company. No Trade Secret is subject to any adverse claim or has
been challenged or threatened in any way.
(vi)
1.2 Section  Certain  Payments . Neither the Company nor any director,  officer,
agent,  or employee of the  Company,  or to the  Company's  Knowledge  any other
Person  associated with or acting for or on behalf of the Company,  has directly
or indirectly (a) made any contribution,  gift, bribe, rebate, payoff, influence
payment, kickback, or other payment to any Person, private or public, regardless
of form,  whether  in money,  property,  or  services  (i) to  obtain  favorable
treatment in securing business, (ii) to pay for favorable treatment for business
secured,  (iii) to obtain special concessions or for special concessions already
obtained,  for or in respect of the Company or any Affiliate of the Company,  or
(iv) in violation of any Legal  Requirement,  (b)  established or maintained any
fund or  asset  that has not been  recorded  in the  books  and  records  of the
Company.
1.3
1.4     Section Disclosure.
(a) No  representation  or warranty of the  Company in this  Agreement  omits to
state a material fact  necessary to make the  statements  herein or therein,  in
light of the circumstances in which they were made, not misleading.
(b)
(c) No notice given  pursuant to Section  will  contain any untrue  statement or
omit to state a material  fact  necessary to make the  statements  therein or in
this  Agreement,  in light of the  circumstances  in which they were  made,  not
misleading.
(d)
1.5 Section  Relationships  with  Related  Persons . Neither the Company nor any
Related  Person of the Company has, any interest in any property  (whether real,
personal, or mixed and whether tangible or intangible), used in or pertaining to
the  Company's  businesses.  Neither the  Company nor any Related  Person of the
Company is owns (of record or as a beneficial  owner) an equity  interest or any
other  financial  or  profit  interest  in, a Person  that has (i) had  business
dealings or a material financial interest in any transaction with the Company or
(ii)  engaged in  competition  with the Company  with respect to any line of the
products  or  services of the  Company (a  "Competing  Business")  in any market
presently  served  by the  Company  except  for  less  than one  percent  of the
outstanding  capital stock of any Competing  Business that is publicly traded on
any recognized exchange or in the over-the-counter  market.  Neither the Company
nor any  Related  Person  of the  Company  or of the  Company  is a party to any
Contract with, or has any claim or right against, the Company.
1.6
1.7  Section  Offering  .  The  offer,  sale  and  issuance  of  the  Shares  as
contemplated by this Agreement are exempt from the registration  requirements of
the Securities  Act, and neither the Company nor any authorized  agent acting on
its  behalf  will  take  any  action  hereafter  that  would  cause  the loss of
exemption.
1.8
1.9 Section Brokers or Finders . Neither the Company nor its agents has incurred
any obligation or liability,  contingent or otherwise, for brokerage or finders'
fees or agents'  commissions  or other similar  payment in connection  with this
Agreement  or the  Contemplated  Transactions,  that have not been  disclosed by
Company to Investor.
1.10

<PAGE>

        2SECTION REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

        The Investor represents and warrants to the Company as follows:

1.1  Section  Organization  and  Good  Standing  .  The  Investor  is a  limited
partnership  duly organized,  validly  existing,  and in good standing under the
laws of the State of Delaware.
1.2
1.3    Section Authority; No Conflict .
1.4
(a) This Agreement  constitutes the legal,  valid, and binding obligation of the
Investor,  enforceable  against the Investor in accordance  with its terms.  The
Investor  has the absolute  and  unrestricted  right,  power,  and  authority to
execute and deliver this  Agreement  and to perform its  obligations  under this
Agreement.
(b)
(c) Neither the execution and delivery of this Agreement by the Investor nor the
consummation  or  performance  of any of the  Contemplated  Transactions  by the
Investor  will  give any  Person  the  right to  prevent,  delay,  or  otherwise
interfere  with any of the  Contemplated  Transactions.  The Investor is not and
will not be required to obtain any Consent  from any Person in  connection  with
the execution and delivery of this Agreement or the  consummation or performance
of any of the Contemplated Transactions.
(d)
1.5 Section  Investment  Representations . Investor  understands that the Shares
have not been  registered  under  the  Securities  Act or any  applicable  state
securities laws. Investor also understands that the Shares are being offered and
sold pursuant to exemptions  from  registration  contained in the Securities Act
and   applicable   state   securities   laws  based  in  part  upon   Investor's
representations contained in this Agreement.
1.6
1.7 (a) Investor has  substantial  experience  in  evaluating  and  investing in
private placement  transactions involving securities of companies similar to the
Company,  is capable of evaluating the merits and risks of its investment in the
Company  and has the  analytical  and  financial  capacity  to  protect  its own
interests.  Investor  understands  that it must bear the  economic  risk of this
investment  indefinitely  unless  the  Shares  are  registered  pursuant  to the
Securities Act and applicable  state  securities  laws, or exemptions  from such
registrations  are  available.  Investor  understands  that the  Company  has no
present  intention of registering  the Shares.  Investor also  understands  that
there is no assurance that exemptions from registration under the Securities Act
and  applicable  state  securities  laws will be  available  and  that,  even if
available, such exemptions may not allow Investor to transfer all or any portion
of the Shares under the  circumstances,  in the amounts or at the times Investor
might propose.
1.8

          (b)  Investor is  acquiring  the Shares and the Shares for  Investor's
               own accounts  for  investment  only,  and not with a view towards
               their distribution.

          (c)  Investor   represents   that  by  reason   of  its,   or  of  its
               management's,  business or financial experience, Investor has the
               capacity to protect their own  interests in  connection  with the
               transactions contemplated in this Agreement. Further, Investor is
               aware of no publication of any  advertisement  in connection with
               the transactions contemplated in this Agreement.

<PAGE>

          (d)  Investor  represents it is an  "accredited  investor"  within the
               meaning of Regulation D under the Securities Act.

          (e)  Investor has received and read the Company's Financial Statements
               and has had an  opportunity  to discuss the  Company's  business,
               management  and financial  affairs with  directors,  officers and
               management of the Company and has had the  opportunity  to review
               the Company's  operations and facilities.  Investor also has been
               given  the  opportunity  to  ask  all  desired  questions  of and
               received  adequate  answers from,  the Company and its management
               regarding the terms and conditions of this investment.

1.1 Section Certain  Proceedings . There is no pending  Proceeding that has been
commenced  against the Investor and that  challenges,  or may have the effect of
preventing,  delaying, making illegal, or otherwise interfering with, any of the
Contemplated  Transactions.  To the Investor's Knowledge, no such Proceeding has
been Threatened.
1.2
1.3 Section  Brokers or Finders . The  Investor and its officers and agents have
incurred no obligation or liability,  contingent or otherwise,  for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this  Agreement and will  indemnify and hold the Company  harmless from any such
payment  alleged to be due by or through the  Investor as a result of the action
of the Investor or its officers or agents.
1.4

     2 SECTION CONDITIONS PRECEDENT TO THE INVESTOR'S OBLIGATION TO CLOSE

     The  Investor's  obligation  to  purchase  the Shares and to take the other
actions  required  to be taken by the  Investor at the Closing is subject to the
satisfaction,  at or prior to the Closing,  of each of the following  conditions
(any of which may be waived by the Investor, in whole or in part):

1.1 Section Accuracy of  Representations . Each  representation and warranty set
forth in Section of this  Agreement  shall have been  accurate  in all  material
respects as of the date of this Agreement, and shall be accurate in all material
respects as of the Closing Date as if made on the Closing Date,  without  giving
effect to any supplement to the Disclosure Schedules.
1.2
1.3 Section The Company's  Performance  . Each of the covenants and  obligations
that the  Company is  required  to perform or to comply  with  pursuant  to this
Agreement at or prior to the Closing shall have been duly performed and complied
with in all material respects.
1.4
1.5 Section  Additional  Documents . Each of the following  documents shall have
been delivered to the Investor:
1.6
(a) such other documents as the Investor may
reasonably  request for the purpose of
(i)  evidencing  the  accuracy  of  any  of the  Company's  representations  and
warranties,
(ii)  evidencing  the  performance  by the Company of, or the  compliance by the
Company with,  any covenant or  obligation  required to be performed or complied
with by such Persons,
(iii) evidencing the  satisfaction of any condition  referred to in this Section
5, or
(iv)  otherwise  facilitating  the  consummation  or  performance  of any of the
Contemplated Transactions.
(b)

<PAGE>

1.7 Section No  Proceedings . Since the date of this  Agreement,  there must not
have been  commenced or Threatened  against the Investor,  or against any Person
affiliated with the Investor,  any Proceeding (a) involving any challenge to, or
seeking  damages or other relief in  connection  with,  any of the  Contemplated
Transactions,  or (b) that may have the effect of preventing,  delaying,  making
illegal, or otherwise interfering with any of the Contemplated Transactions.
1.8
1.9 Section No Claim Regarding Stock Ownership or Sale Proceeds . There must not
have been made or Threatened by any Person any claim  asserting that such Person
(a) is the holder or the beneficial  owner of, or has the right to acquire or to
obtain  beneficial  ownership of, any stock of, or any other voting,  equity, or
ownership  interest  in, the Company or (b) is entitled to all or any portion of
the Purchase Price payable for the Shares.
1.10
1.11 Section No Prohibition . Neither the  consummation  nor the  performance of
any of the  Contemplated  Transactions  will,  directly or  indirectly  (with or
without notice or lapse of time),  materially  contravene,  or conflict with, or
result  in a  material  violation  of,  or  cause  the  Investor  or any  Person
affiliated with the Investor to suffer any material adverse  consequence  under,
(a) any applicable Legal  Requirement or Order, or (b) any Legal  Requirement or
Order that has been published,  introduced, or otherwise formally proposed by or
before any Governmental Body.
1.12
1.13 Section No Material Adverse Change . There shall not have been any material
adverse change in the financial  condition,  property,  business,  operations or
results of operations of the Company after the date of this Agreement.
1.14

 2SECTION COVENANTS OF THE COMPANY PRIOR TO CLOSING DATE AND OTHER AGREEMENTS

1.1 Section  Access and  Investigation  . Between the date of this Agreement and
the Closing Date,  the Company will afford the Investor and its  Representatives
full  and  complete  access,   during  reasonable  business  hours  and  without
interference  with  the  operations  of the  Company,  to the  Company's  books,
records, financial statements, facilities,  distributors (without prior approval
of the  management  of the  Company),  key  personnel  and other  documents  and
material relating to the Company's financial condition,  assets, liabilities and
business.
1.2
1.3 Section Negative Covenant . Except as otherwise  expressly permitted by this
Agreement,  between the date of this Agreement and the Closing Date, the Company
will  not,  without  the  prior  written  consent  of  the  Investor,  take  any
affirmative action, or fail to take any reasonable action within its control, as
a result of which any of the  changes  or events  listed in Section is likely to
occur.
1.4
1.5 Section  Required  Approvals . As promptly as practicable  after the date of
this  Agreement,   the  Company  will,  make  all  filings   required  by  Legal
Requirements  to be made  by  them  in  order  to  consummate  the  Contemplated
Transactions.  Between  the date of this  Agreement  and the Closing  Date,  the
Company will  cooperate  with the Investor  with respect to all filings that the
Investor  elects  to  make  or is  required  by  Legal  Requirements  to make in
connection with the Contemplated Transactions and.

1.1 Section  Notification  . Between the date of this  Agreement and the Closing
Date,  the Company will  promptly  notify the Investor in writing if the Company
becomes  aware of any fact or condition  that causes or  constitutes a Breach of

<PAGE>

any of the  Company's  representations  and  warranties  as of the  date of this
Agreement, or if such the Company becomes aware of the occurrence after the date
of this  Agreement  of any fact or  condition  that would  (except as  expressly
contemplated  by this  Agreement)  cause  or  constitute  a  Breach  of any such
representation  or warranty had such  representation or warranty been made as of
the time of occurrence  or discovery of such fact or condition.  Should any such
fact  or  condition  require  any  change  in the  Disclosure  Schedules  if the
Disclosure  Schedules  were dated the date of the occurrence or discovery of any
such fact or  condition,  the Company  will  promptly  deliver to the Investor a
supplement to the Disclosure Schedules  specifying such change.  During the same
period,  the Company will promptly  notify the Investor of the occurrence of any
Breach of any  covenant of the Company in this Section or of the  occurrence  of
any event that may make the satisfaction of the conditions in Section impossible
or unlikely.
1.2
1.3  Section No  Negotiation  . Until such time,  if any, as this  Agreement  is
terminated  pursuant to Section , the Company  will not,  and will cause each of
its  Representatives  not to,  directly  or  indirectly  solicit,  initiate,  or
encourage any inquiries or proposals from,  discuss or negotiate  with,  provide
any  non-public  information  to, or  consider  the  merits  of any  unsolicited
inquiries or proposals  from,  any Person (other than the Investor)  relating to
any transaction  involving the sale of the business or assets (other than in the
Ordinary Course of Business) of the Company,  or any of the capital stock of the
Company,  or  any  merger,  consolidation,   business  combination,  or  similar
transaction involving the Company.
1.4
1.5 Section  Best Efforts . Between the date of this  Agreement  and the Closing
Date,  the Company will use its Best Efforts to cause the conditions in Sections
7 and 8 to be satisfied.
1.6
     2SECTION COVENANTS OF THE INVESTOR PRIOR TO CLOSING DATE

1.1 Section Approvals of Governmental  Bodies . As promptly as practicable after
the date of this  Agreement,  the  Investor  will,  and will  cause  each of its
Related Persons to, make all filings  required by Legal  Requirements to be made
by them to consummate the  Contemplated  Transactions.  Between the date of this
Agreement and the Closing Date,  the Investor  will, and will cause each Related
Person to,  cooperate  with the Company  with  respect to all  filings  that the
Company  is  required  by  Legal  Requirements  to make in  connection  with the
Contemplated  Transactions;  provided that this  Agreement  will not require the
Investor to dispose of or make any change in any  portion of its  business or to
incur any other burden to obtain a Governmental Authorization.
1.2
1.3  Section  Best  Efforts . Except as set forth in the  proviso  to  Section ,
between the date of this  Agreement and the Closing Date,  the Investor will use
its Best Efforts to cause the conditions in Sections 7 and 8 to be satisfied.
1.4
1.5
     2SECTION CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATION TO CLOSE

     The  Company's  obligation to sell the Shares and to take the other actions
required  to be  taken  by  the  Company  at  the  Closing  is  subject  to  the
satisfaction,  at or prior to the Closing,  of each of the following  conditions
(any of which may be waived by the Company, in whole or in part):

<PAGE>

1.1 Section Accuracy of Representations . Each of the Investor's representations
and  warranties  in this  Agreement  shall have been  accurate  in all  material
respects as of the date of this  Agreement and shall be accurate in all material
respects as of the Closing Date as if made on the Closing Date.
1.2
1.3 Section The Investor's  Performance . Each covenant and obligation  that the
Investor is required to perform or to comply with pursuant to this  Agreement at
or prior to the  Closing  shall have been  performed  and  complied  with in all
material respects.
1.4
1.5 Section  Additional  Documents . The Investor must have caused the following
documents to be delivered  to the Company:  1.6 (a) such other  documents as the
Company may reasonably request for the purpose of (i) evidencing the accuracy of
any representation or warranty of the Investor,  (ii) evidencing the performance
by the Investor of, or the  compliance  by the  Investor  with,  any covenant or
obligation  required to be performed  or complied  with by the  Investor,  (iii)
evidencing the  satisfaction of any condition  referred to in this Section 8, or
(iv)  otherwise  facilitating  the  consummation  of  any  of  the  Contemplated
Transactions.
(b)
1.7 Section No Injunction . There must not be in effect any Legal Requirement or
any  injunction  or other Order that (a) prohibits the sale of the Shares by the
Company to the  Investor,  and (b) has been adopted or issued,  or has otherwise
become effective, since the date of this Agreement.
1.8

     2SECTION TERMINATION

1.1 Section Termination Events . This Agreement may, by notice given prior to or
at the Closing, be terminated:
1.2
(a) by either the Investor or the Company if a material  Breach of any provision
of this  Agreement has been committed by the other party and such Breach has not
been waived;
(b)
(i) by the Investor if any of the conditions in Section 7 has not been satisfied
as of the Closing  Date or if  satisfaction  of such a  condition  is or becomes
impossible  (other than  through the failure of the  Investor to comply with its
obligations under this Agreement) and the Investor has not waived such condition
on or before the Closing Date; or
(ii)
(iii)  by the  Company,  if any of the  conditions  in  Section  8 has not  been
satisfied  of the Closing  Date or if  satisfaction  of such a  condition  is or
becomes impossible (other than through the failure of the Company to comply with
its  obligations  under this  Agreement)  and the  Company  have not waived such
condition on or before the Closing Date;
(iv)
(c) by mutual consent of the Investor and the Company; or
(d)
(e) by either the Investor or the Company if the Closing has not occurred (other
than  through the failure of any party  seeking to terminate  this  Agreement to
comply fully with its  obligations  under this  Agreement)  on or before May 26,
1999, or such later date as the parties may agree upon.
(f)

<PAGE>

1.3 Section  Effect of  Termination  . Each party's right of  termination  under
Section 9.1 is in addition to any other rights it may have under this  Agreement
or otherwise, and the exercise of a right of termination will not be an election
of remedies.  If this Agreement is terminated pursuant to Section 9, all further
obligations of the parties under this Agreement will terminate,  except that the
obligations in Sections 11.1 and 11.3 will survive;  provided,  however, that if
this  Agreement is  terminated by a party because of the Breach of the Agreement
by the other party or because one or more of the  conditions to the  terminating
party's  obligations  under this  Agreement is not  satisfied as a result of the
other party's failure to comply with its obligations  under this Agreement,  the
terminating  party's  right to  pursue  all legal  remedies  will  survive  such
termination unimpaired.
1.4
     2SECTION GENERAL PROVISIONS

1.1 Section Expenses . Except as otherwise expressly provided in this Agreement,
each party to this  Agreement  will bear its  respective  expenses  incurred  in
connection with the  preparation,  execution,  and performance of this Agreement
and the  Contemplated  Transactions,  including all fees and expenses of agents,
representatives,  counsel,  and  accountants.  The  Company  will not  incur any
out-of-pocket  expenses  in  connection  with  this  Agreement.  In the event of
termination  of this  Agreement,  the  obligation  of each  party to pay its own
expenses  will be subject to any rights of such party  arising  from a breach of
this Agreement by another party.
1.2
1.3 Section Public  Announcements . Any public announcement or similar publicity
with respect to this Agreement or the Contemplated  Transactions will be issued,
if at all, at such time and in such manner as the  Investor  determines.  Unless
consented to by the Investor in advance or required by Legal Requirements, prior
to the Closing The Company shall keep this Agreement  strictly  confidential and
may not make any disclosure of this Agreement to any Person. The Company and the
Investor  will  consult  with  each  other  concerning  the  means by which  the
Company's  employees,  customers,  and suppliers and others having dealings with
the Company will be informed of the Contemplated Transactions,  and the Investor
will have the right to be present for any such communication.
1.4
1.5 Section Confidentiality . Between the date of this Agreement and the Closing
Date, the Investor and the Company will maintain in  confidence,  and will cause
the directors, officers, employees, agents, and advisors of the Investor and the
Company to maintain in confidence, and not use to the detriment of another party
or the Company any written,  oral, or other  information  obtained in confidence
from  another  party or the Company in  connection  with this  Agreement  or the
Contemplated Transactions,  unless (a) such information is already known to such
party or to others not bound by a duty of  confidentiality  or such  information
becomes publicly  available  through no fault of such party, (b) the use of such
information  is necessary or  appropriate  in making any filing or obtaining any
consent  or  approval   required  for  the   consummation  of  the  Contemplated
Transactions, or (c) the furnishing or use of such information is required by or
necessary or appropriate in connection with legal proceedings.
1.6
1.7 If the Contemplated Transactions are not consummated, each party will return
or destroy as much of such written information as the other party may reasonably
request.  Whether or not the Closing takes place,  the Company waives,  and will
upon the  Investor's  request  cause the Company to waive,  any cause of action,
right, or claim arising out of the access of the Investor or its representatives

<PAGE>

to any trade secrets or other confidential information of the Company except for
the  intentional  competitive  misuse by the  Investor of such trade  secrets or
confidential information.
1.8
1.9 Section Notices . All notices,  consents,  waivers, and other communications
under this  Agreement  must be in  writing  and will be deemed to have been duly
given when (a) delivered by hand (with  written  confirmation  of receipt),  (b)
sent by telecopier (with written confirmation of receipt),  provided that a copy
is mailed by registered mail, return receipt requested,  or (c) when received by
the addressee,  if sent by a nationally  recognized  overnight  delivery service
(receipt  requested),  in each case to the appropriate  addresses and telecopier
numbers set forth below (or to such other addresses and telecopier  numbers as a
party may designate by notice to the other parties):
1.10
1.11    The Company:       OneSource Technologies, Inc.
1.12                       2329 West Mescal, Suite 304
1.13                       Phoenix, Arizona 85029-4765
1.14    Attention:         Jerry Washburn, President and Chief Executive Officer
1.15    Facsimile No.:     602-216-9611
1.16
1.17    The Investor:      Blackwater Capital Partners II, L.P.
1.18                       1800 Glenview Road
1.19                       Glenview, Illinois 60025
1.20    Attention:         Steven R. Green, Managing Member of General Partner
1.21    Facsimile No.:     847-729-2296
1.22
1.23    with a copy to:    Quarles & Brady LLP
1.24                       One East Camelback, Suite 400
1.25                       Phoenix, Arizona  85012-1649
1.26    Attention:         P. Robert Moya, Esq.
1.27    Facsimile No.:     602-230-5598
1.28
1.29 Section Jurisdiction; Service of Process . Any action or proceeding seeking
to  enforce  any  provision  of,  or based on any  right  arising  out of,  this
Agreement  may be brought  against any of the parties in the courts of the State
of Arizona,  County of Maricopa,  or, if it has or can acquire jurisdiction,  in
the United States  District  Court for the District of Arizona,  and each of the
parties  consents to the  jurisdiction  of such  courts (and of the  appropriate
appellate  courts) in any such action or proceeding  and waives any objection to
venue  laid  therein.  Process in any action or  proceeding  referred  to in the
preceding sentence may be served on any party anywhere in the world.
1.30
1.31 Section Further  Assurances . The parties agree (a) to furnish upon request
to each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably  request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
1.32
1.33 Section  Waiver . The rights and remedies of the parties to this  Agreement
are  cumulative  and not  alternative.  Neither the failure nor any delay by any
party in exercising any right,  power,  or privilege under this Agreement or the

<PAGE>

documents  referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further  exercise of such right,  power,
or privilege or the exercise of any other right,  power,  or  privilege.  To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents  referred to in this Agreement can be discharged
by one party,  in whole or in part, by a waiver or  renunciation of the claim or
right  unless in writing  signed by the other  party;  (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given;  and (c) no  notice  to or demand on one party  will be deemed to be a
waiver of any  obligation of such party or of the right of the party giving such
notice or demand to take further  action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
1.34
1.35 Section Entire Agreement and  Modification . This Agreement  supersedes all
prior  agreements  between  the  parties  with  respect  to its  subject  matter
(including  the Term Letter  between the Investor and the Company  dated May 25,
1999) and constitutes (along with the documents referred to in this Agreement) a
complete  and  exclusive  statement  of the terms of the  agreement  between the
parties with respect to its subject  matter.  This  Agreement may not be amended
except by a written  agreement  executed  by the  party to be  charged  with the
amendment.
1.36
1.37 Section Disclosure Schedules . The disclosures in the Disclosure Schedules,
and those in any  Supplement  thereto,  shall be  deemed  to relate  only to the
representations  and  warranties  in the Section of the  Agreement to which they
expressly  relate  and  not to any  other  representation  or  warranty  in this
Agreement.  In the event of any inconsistency between the statements in the body
of this Agreement and those in the Disclosure Schedules (other than an exception
expressly  set  forth as such in the  Disclosure  Schedules  with  respect  to a
specifically identified  representation or warranty), the statements in the body
of this Agreement will control.
1.38
1.39 Section Assignments,  Successors,  and No Third-Party Rights . The Investor
may assign its rights  under this  Agreement  without  the prior  consent of the
Company.  The  Company  may not assign any of its  rights  under this  Agreement
without the prior  consent of the Investor.  Subject to the preceding  sentence,
this  Agreement will apply to, be binding in all respects upon, and inure to the
benefit  of  the  successors  and  permitted  assigns  of the  parties.  Nothing
expressed or referred to in this  Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable  right,  remedy,
or claim  under or with  respect  to this  Agreement  or any  provision  of this
Agreement.  This  Agreement and all of its provisions and conditions are for the
sole and exclusive benefit of the parties to this Agreement and their successors
and assigns.
1.40
1.41 Section  Severability  . If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this  Agreement  will remain in full force and  effect.  Any  provision  of this
Agreement  held invalid or  unenforceable  only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
1.42
1.43 Section Section  Headings,  Construction . The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or  interpretation.  All  references  to  "Section" or  "Sections"  refer to the
corresponding  Section or  Sections  of this  Agreement.  All words used in this
Agreement will be construed to be of such gender or number as the  circumstances
require.  Unless  otherwise  expressly  provided,  the word "including" does not
limit the preceding words or terms.

<PAGE>

1.44
1.45  Section  Time of Essence . With  regard to all dates and time  periods set
forth or referred to in this Agreement, time is of the essence.
1.46
1.47 Section  Governing Law . This Agreement will be governed by the laws of the
State of Arizona without regard to conflicts of laws principles.
1.48
1.49  Section  Counterparts  . This  Agreement  may be  executed  in one or more
counterparts,  each of  which  will be  deemed  to be an  original  copy of this
Agreement and all of which,  when taken  together,  will be deemed to constitute
one and the same agreement.
1.50
1.51

<PAGE>

           IN WITNESS  WHEREOF,  the parties have  executed and  delivered  this
Agreement as of the date first written above.

THE INVESTOR:

BLACKWATER CAPITAL PARTNERS II, L.P.
a Delaware limited partnership

By:  Blackwater Capital Group II, L.L.C.
     a Delaware limited liability company
Its:  General Partner

By: /s/ Steven R. Green
------------------------
    Steven R. Green
    Managing Member

THE COMPANY:

ONESOURCE TECHNOLOGIES, INC.
a Delaware corporation

By: /s/ Jerry Washburn
------------------------
   Jerry Washburn
   President and Chief Executive Officer

<PAGE>

SCHEDULES

Schedule 3.2  Contracts for Issuance Sale or Transfer of Securities   34
Schedule 3.3(b) Organizational Documents                              35
Schedule 3.4(b) Agreements Regarding Capital Stock                    36
Schedule 3.7(b) Conflicts                                             37
Schedule 3.16(a) Legal Proceedings                                    38

<PAGE>

                                  Schedule 3.2

              Contracts for Issuance Sale or Transfer of Securities

                                      None.

<PAGE>

                                 Schedule 3.3(b)

                            Organizational Documents

                               (already provided)

<PAGE>

                                 Schedule 3.4(b)

                       Agreements Regarding Capital Stock

                                      None.

<PAGE>

                                 Schedule 3.7(b)

                                    Conflicts

                                      None.

<PAGE>

                                Schedule 3.16(a)

                                Legal Proceedings

1.   Complaint  filed  by a  former  employee  of the  Company  for a  claim  of
     allegedly unpaid sales commissions of $28,475.EXHIBIT 10.13

                          ONESOURCE TECHNOLOGIES, INC.

                           INVESTOR'S RIGHTS AGREEMENT

<PAGE>

               TABLE OF CONTENTS
<TABLE>
<S>                                                                             <C>
                                                                                Page
I.  GENERAL                                                                      1
           1.1       Definitions                                                 1

II.  REGISTRATION; RESTRICTIONS ON TRANSFER                                      3
           2.1       Restrictions on Transfer                                    3
           2.2       Demand Registration                                         4
           2.3       Piggyback Registration                                      5
           2.4       Form S-3 Registration                                       6
           2.5       Expenses of Registration                                    7
           2.6       Registration Procedures                                     7
           2.7       Termination of Registration Rights                          8
           2.8       Delay of Registration                                       8
           2.9       Indemnification                                             8
           2.10      Assignment of Registration Rights                          10
           2.11      Amendment of Registration Rights                           10
           2.12      Limitation on Subsequent Registration Rights               10
           2.13      Suspension of Sales under Certain Circumstances            11
           2.14      Information by Holder                                      11
           2.15      Current Public Information                                 11
           2.16      No Inconsistent Agreements                                 11

III.  COVENANTS OF THE COMPANY                                                  12
           3.1       Basic Financial Information and Reporting                  12
           3.2       Inspection Rights                                          13
           3.3       Confidentiality of Records                                 13
           3.5       Expense Reimbursement                                      13
           3.6       Termination of Covenants                                   13

IV.  LIMITATIONS ON ISSUANCES, RIGHTS OF FIRST REFUSAL                          13
           4.1       Subsequent Offerings                                       13
           4.2       Exercise of Rights                                         13
           4.3       Issuance of Equity Securities to Other Persons             14
           4.4       Termination of Rights of First Refusal                     14
           4.5       Transfer of Rights of First Refusal                        14
           4.6       Excluded Securities                                        14

V.  MISCELLANEOUS                                                               15
           5.1       Governing Law                                              15
           5.2       Survival                                                   15
           5.3       Successors and Assigns                                     15
           5.4       Separability                                               15
           5.5       Amendment and Waiver                                       15
           5.6       Delays or Omissions                                        16
           5.7       Notices                                                    16
           5.8       Attorneys' Fees                                            16
           5.9       Titles and Subtitles                                       16
           5.10      Construction                                               16
           5.11      Entire Agreement                                           17
           5.12      Counterparts                                               17
</TABLE>

<PAGE>

                           INVESTOR'S RIGHTS AGREEMENT

           This INVESTOR'S RIGHTS AGREEMENT (the "Agreement") is entered into as
of May 26,  1999,  by and  between  OneSource  Technologies,  Inc.,  a  Delaware
corporation (the "Company") and Blackwater Capital Partners II, L.P., a Delaware
limited partnership (the "Investor").

                                    RECITALS

           WHEREAS, the Company and the Investor are parties to a Stock Purchase
Agreement dated the date hereof (the "Stock Purchase Agreement"); and

           WHEREAS,  pursuant  to  the  Stock  Purchase  Agreement,   Holder  is
acquiring  2,905,828  shares (the "Shares") of the Company's  common stock,  par
value $.001 per share ("Common Stock"); and

           WHEREAS,  the Shares will not be registered  under the Securities Act
of 1933, as amended, or under the securities laws of any state, in reliance upon
exemptions from registration thereunder; and

           WHEREAS,  the  parties  desire to enter into this  Agreement  for the
purposes, among others, of providing the registration rights, information rights
and a right of first refusal as set forth below.

           NOW,   THEREFORE,   in   consideration   of  the   mutual   promises,
representations,  warranties,  covenants and  conditions  set forth herein,  the
parties mutually agree as follows:

                                   I. GENERAL

           1.1 Definitions . As used in this Agreement the following terms shall
have the meanings set forth below:

           "Affiliate" of any Person means any other Person who either  directly
or indirectly is in control of, is controlled by or is under common control with
such Person;  provided that for purposes of this definition an investment entity
shall be deemed to be controlled by its investment  manager,  investment advisor
or general partner.

           "Business  Day" means any  Monday,  Tuesday,  Wednesday,  Thursday or
Friday that is not a day on which  banking  institutions  in the City of Phoenix
are authorized by law, regulation or executive order to close.

           "Equity  Securities"  means (i) any stock or similar  security of the
Company, (ii) any security convertible, with or without consideration,  into any
stock or similar  security  (including any option to purchase such a convertible
security),  (iii) any security  carrying any warrant or right to subscribe to or
purchase any stock or similar security or (iv) any such warrant or right.

<PAGE>

           "Exchange Act" means the Securities  Exchange Act of 1934, as amended
(or any  similar  successor  federal  statue),  and the  rules  and  regulations
thereunder, as the same are in effect from time to time.

           "Form S-3" means such form under the  Securities  Act as in effect on
the date hereof or any  successor  registration  form under the  Securities  Act
subsequently  adopted by the SEC which  permits  inclusion or  incorporation  of
substantial  information  by reference to other  documents  filed by the Company
with the SEC.

           "Holder"  means the Investor or any assignee of record of Registrable
Securities owned by the Investor in accordance with Section 2.10 hereof. For the
purposes of this  Agreement,  the Company  may deem the  registered  holder of a
Registrable Security as the Holder of it.

           "Prospectus"  means  the  prospectus  included  in  any  Registration
Statement, as amended or supplemented by a prospectus supplement with respect to
the terms of the offering of any portion of the Registrable  Securities  covered
by such  Registration  Statement and by all other  amendments and supplements to
the  Prospectus,   including   post-effective   amendments,   and  all  material
incorporated by reference in such Prospectus.

           "Register,"  "registered," and "registration" refer to a registration
effected by preparing and filing a Registration Statement in compliance with the
Securities  Act,  and the  declaration  or  ordering  of  effectiveness  of such
Registration Statement or document.

           "Registrable Securities" means (i) all shares of the Company's Common
Stock issued or issuable to Holder  pursuant to the Stock Purchase  Agreement as
further  described in the Recitals hereto;  and (ii) any other securities issued
as a result of or in connection with any stock dividend,  stock split or reverse
stock  split,  combination,   recapitalization,   reclassification,   merger  or
consolidation, exchange or distribution in respect of the shares of Common Stock
referred in to (i) above.

           "Registration Expenses" means all expenses incurred by the Company in
complying with Sections 2.2, 2.3 and 2.4 hereof, including,  without limitation,
all  registration  and  filing  fees,  fees  and  expenses  of  compliance  with
securities or blue sky laws (including  reasonable fees and disbursements of one
counsel in connection  with blue sky  qualifications  or  registrations  (or the
obtaining of  exemptions  therefrom)  of the  Registrable  Securities,  printing
expenses (including expenses of printing  Prospectuses),  messenger and delivery
expenses, internal expenses (including all salaries and expenses of its officers
and employees performing legal or accounting duties),  fees and disbursements of
its counsel and its  independent  certified  public  accountants  (including the
expenses of any special  audit or "comfort"  letters  required by or incident to
such  performance or compliance),  securities  acts liability  insurance (if the
Company  elects to obtain  such  insurance),  fees and  expenses  of any special
experts  retained by the Company in connection with any  registration  hereunder
and the fees and  expenses of any other  Person  retained  by the  Company  (but
excluding the  compensation  of regular  employees of the Company which shall be
paid in any event by the Company).

           "Registration  Statement"  means  any  registration  statement  which
covers any of the  Registrable  Securities  pursuant to the  provisions  of this
Agreement,  including  the  Prospectus  included  therein,  all  amendments  and
supplements to such Registration  Statement including post effective amendments,
all  exhibits and all material  incorporated  by reference in such  Registration
Statement.

<PAGE>

           "Securities Act" means the Securities Act of 1933, as amended (or any
similar successor federal statue), and the rules and regulations thereunder,  as
the same are in effect from time to time.

           "Selling   Expenses"  means  all  underwriting   discounts,   selling
commissions  and  stock  transfer  taxes  applicable  to the sale of  negotiable
securities.

           "SEC" or "Commission"  means the Securities and Exchange  Commission,
or any  other  United  States  federal  agency  at the  time  administering  the
Securities Act.

           "Underwritten  Offering"  means an offering that is registered  under
the  Securities  Act in which  securities  of the Company are sold pursuant to a
firm commitment underwriting,  to an underwriter at a fixed price for reoffering
to the  public  or  pursuant  to  agency or best  efforts  arrangements  with an
underwriter.

                   II. REGISTRATION; RESTRICTIONS ON TRANSFER

           2.1       Restrictions on Transfer.

                     (a) Holder agrees not to make any disposition of all or any
portion of the Registrable Securities unless and until the transferee has agreed
in writing  for the  benefit of the  Company  to be bound by this  Section  2.1,
provided and to the extent such Section is then applicable and:

                               (i)   There  is  then  in  effect  a Registration
Statement  under the Securities Act covering such proposed  disposition and such
disposition is made in accordance with such Registration Statement; or

                               (ii)   (A) Holder shall have notified the Company
of the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition,  and (B) if
reasonably  requested by the Company,  Holder shall have  furnished  the Company
with an opinion of counsel,  reasonably  satisfactory to the Company,  that such
disposition  will not require  registration  of such shares under the Securities
Act.  It is agreed that the  Company  will not  require  opinions of counsel for
transactions made pursuant to Rule 144 except in unusual circumstances.

                              (iii) Notwithstanding the provisions of paragraphs
(i) and (ii) above, no such  Registration  Statement or opinion of counsel shall
be  necessary  for a  transfer  by a Holder  which is (A) a  partnership  to its
partners in accordance  with  partnership  interests,  or (B) to Holder's family
member or trust for the benefit of an individual Holder, provided the transferee
will be subject  to the terms of this  Section  2.1 to the same  extent as if he
were the original Holder hereunder.

                     (b)  Each  certificate  representing Registrable Securities
shall (unless otherwise permitted by the provisions of the Agreement) be stamped
or otherwise imprinted with a legend substantially  similar to the following (in
addition to any legend  required under  applicable  state  securities laws or as
provided elsewhere in the Agreement):

<PAGE>

     THE  SECURITIES  REPRESENTED  HEREBY  HAVE NOT BEEN  REGISTERED  UNDER  THE
     SECURITIES  ACT OF  1933  (THE  "ACT")  AND  MAY  NOT BE  OFFERED,  SOLD OR
     OTHERWISE TRANSFERRED,  PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
     UNDER THE ACT OR,  IN THE  OPINION  OF  COUNSEL  OR BASED ON OTHER  WRITTEN
     EVIDENCE  IN  FORM  AND  SUBSTANCE  SATISFACTORY  TO THE  ISSUER  OF  THESE
     SECURITIES,  SUCH OFFER,  SALE OR TRANSFER,  PLEDGE OR  HYPOTHECATION IS IN
     COMPLIANCE THEREWITH.

                     (c)   The Company  shall  be  obligated to reissue promptly
unlegended  certificates  at the request of any Holder  thereof if Holder  shall
have  obtained  an  opinion  of  counsel  (which  counsel  may be counsel to the
Company) reasonably  acceptable to the Company to the effect that the securities
proposed to be disposed of may lawfully be so disposed of without  registration,
qualification or legend.

                     (d)   Any  legend  endorsed  on  an  instrument pursuant to
applicable state securities laws and the stop-transfer instructions with respect
to such  securities  shall be removed upon receipt by the Company of an order of
the appropriate blue sky authority authorizing such removal.

           2.2       Demand Registration .

                     2.2.1  Upon the written request of Holder at any time after
the date one year after the closing of the Company's first Underwritten Offering
of Common  Stock of the  Company  made  pursuant  to an  effective  Registration
Statement  under the  Securities Act (the "Initial  Offering")  that the Company
file a Registration Statement under the Securities Act covering the registration
of Registrable Securities, the Company shall effect, as soon as practicable, the
registration under the Securities Act of all Registrable  Securities that Holder
requests  to be  registered;  provided  that  the  number  of  securities  to be
registered  shall be not less  than 50% of the  Registrable  Securities  held by
Holder.

                     2.2.2   The  Company  shall not be obligated to effect more
than two (2) registrations pursuant to this Section 2.2.

                     2.2.3   The  Company  shall  not  be  required  to effect a
registration  pursuant to this Section 2.2 during the period  starting  with the
date of filing of, and ending on the date 90 days  following the effective  date
of the Registration Statement pertaining to the Initial Offering,  provided that
the  Company  is  making  reasonable  and  good  faith  efforts  to  cause  such
Registration  Statement to become effective.  In addition, the Company shall not
be required to effect a  registration  pursuant to this Section 2.2 if within 30
days of receipt of a written request from Holder pursuant to Section 2.2.1,  the
Company gives notice to Holder of the Company's intention to file a Registration
Statement for its Initial Offering within 90 days.

                     2.2.4   Notwithstanding the foregoing, if the Company shall
furnish to Holder requesting a Registration  Statement  pursuant to this Section
2.2, a certificate  signed by the Chairman of the Board stating that in the good
faith  judgment of the Board of Directors of the Company,  it would be seriously
detrimental to the Company and its stockholders for such Registration  Statement
to be  filed  and  it is  therefore  essential  to  defer  the  filing  of  such
Registration  Statement,  the Company  shall have the right to defer such filing
for a period of not more than 120 days after  receipt of the  request of Holder;
provided that such right to delay a request shall be exercised by the Company no
more than twice in any one-year period.

<PAGE>

           2.3 Piggyback  Registration  . If the Company at any time proposes to
file a Registration  Statement  with respect to any class of Equity  Securities,
whether for its own account (other than a Registration  Statement on Form S-4 or
S-8, or any successor or substantially similar form or a Registration  Statement
covering (i) an employee stock option,  stock purchase or  compensation  plan or
securities  issued or  issuable  pursuant  to any such  plan or (ii) a  dividend
reinvestment  plan) or for the account of a holder of  securities of the Company
pursuant  to   registration   rights  granted  by  the  Company  (a  "Requesting
Securityholder"),  then the Company  shall in each case give  written  notice of
such proposed  filing to Holder at least 30 Business Days before the anticipated
filing date of any such Registration  Statement by the Company,  and such notice
shall  offer to Holder  the  opportunity  to have any or all of the  Registrable
Securities held by Holder  included in such  Registration  Statement.  If Holder
desires to have the Registrable  Securities  registered  under this Section 2.3,
Holder must so advise the Company in writing  within 20 Business  Days after the
date of  receipt of such  notice  (which  request  shall set forth the amount of
Registrable  Securities for which  registration  is requested),  and the Company
shall include in such Registration  Statement all the Registrable  Securities so
requested to be included  therein;  If Holder  decides not to include all of its
Registrable  Securities in any  Registration  Statement  thereafter filed by the
Company,  Holder  shall  nevertheless  continue to have the right to include any
Registrable Securities in any subsequent  Registration Statement or Registration
Statements  as may be filed by the  Company  with  respect to  offerings  of its
securities, all upon the terms and conditions set forth herein.

                     2.3.1    Underwriting.  If the Registration Statement under
which the Company  gives notice  under this  Section 2.3 is for an  Underwritten
Offering, the Company shall so advise Holder. In such event, the right of Holder
to be  included  in a  registration  pursuant  to  this  Section  2.3  shall  be
conditioned upon Holder's  participation in such  underwriting and the inclusion
of Holder's  Registrable  Securities in the  underwriting to the extent provided
herein. Holder shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting.  Notwithstanding
any other  provision of the  Agreement,  if the  underwriter  determines in good
faith that marketing  factors require a limitation of the number of shares to be
underwritten,  the number of shares  that may be  included  in the  underwriting
shall be allocated,  first, to the Company; second, to Holder (or, if Holder has
assigned Registrable  Securities in accordance with Section 2.10 hereof, Holders
on a pro rata basis based on the total number of Registrable  Securities held by
such  Holders);  and third,  to any  stockholder  of the  Company  (other than a
Holder) on a pro rata basis. No such reduction shall reduce the securities being
offered by the Company  for its own  account to be included in the  registration
and  underwriting,  except  that in no event shall the amount of  securities  of
Holder included in the  registration be reduced below 30% of the total amount of
securities  included in such  registration,  unless such offering is the Initial
Offering  and such  registration  does not include  shares of any other  selling
Stockholders,  in which event any or all of the Registrable Securities of Holder
may be excluded in accordance with the  immediately  preceding  sentence.  In no
event  will  shares  of any  other  selling  Stockholder  be  included  in  such
registration  which would  reduce the number of shares  which may be included by
Holder without the written consent of Holder.

           2.4       Form S-3 Registration .

                     2.4.1     After its Initial Offering, the Company shall use
its best efforts to qualify for  registration  on Form S-3 or any  comparable or
successor  form or forms.  After the Company has  qualified  for the use of Form
S-3, in addition to the rights  contained in the  foregoing  provisions  of this
Section 2,  Holder  shall have the right to  request  registrations  on Form S-3
(such  requests  shall be in  writing  and shall  state the  number of shares of
Registrable Securities to be disposed of and the intended methods of disposition
of such shares by Holder).

<PAGE>

                     2.4.2     As  soon  as  practicable after receiving written
notice of the proposed  registration  from Holder,  effect such registration and
all related  qualifications  and compliances as may be so requested and as would
permit  or  facilitate  the  sale and  distribution  of all or such  portion  of
Holder's  Registrable  Securities as are  specified in such  request;  provided,
however,   that  the  Company   shall  not  be  obligated  to  effect  any  such
registration,  qualification or compliance  pursuant to this Section 2.4: (i) if
Form S-3 is not available for such offering by Holder, (ii) if Holder,  together
with the holders of any other securities of the Company entitled to inclusion in
such  registration,  propose  to sell  Registrable  Securities  and  such  other
securities  (if any) at an aggregate  price to the public of less than $500,000,
(iii) if the  Company  shall  furnish  to  Holder a  certificate  signed  by the
Chairman of the Board of Directors of the Company stating that in the good faith
judgment  of the  Board of  Directors  of the  Company,  it  would be  seriously
detrimental to the Company and its  Stockholders  for such Form S-3 Registration
to be effected at such time,  in which event the Company shall have the right to
defer the filing of the Form S-3 Registration Statement for a period of not more
than 120 days after  receipt of the request of Holder under this Section 2.4, or
(iv) if the Company has,  within the 12 month period  preceding the date of such
request,  already  effected one  registration on Form S-3 for Holder pursuant to
this Section 2.4.

                     2.4.3    Subject to the foregoing, the Company shall file a
Form S-3 Registration  Statement  covering the Registrable  Securities and other
securities so requested to be registered as soon as practicable after receipt of
the request or requests of Holder.

           2.5 Expenses of Registration . All Registration  Expenses incurred in
connection  with any  registration,  qualification  or  compliance  pursuant  to
Sections  2.2,  2.3 or 2.4 herein  shall be borne by the  Company.  All  Selling
Expenses incurred in connection with any registrations hereunder, shall be borne
by the  holders of the  securities  so  registered  pro rata on the basis of the
number of shares so registered.  The Company shall not, however,  be required to
pay for expenses of any registration proceeding begun pursuant to Section 2.2 or
2.4, the request of which has been  subsequently  withdrawn by Holder unless the
withdrawal is based upon material adverse information  concerning the Company of
which Holder was not aware at the time of such request. If Holder is required to
pay the  Registration  Expenses,  such expenses shall be borne by the holders of
securities (including  Registrable  Securities)  requesting such registration in
proportion to the number of shares for which registration was requested.  If the
Company is required  to pay the  Registration  Expenses of a withdrawn  offering
pursuant to Section 2.5(a),  then Holder shall not forfeit their rights pursuant
to Section 2.2 or Section 2.4 to a demand registration.

           2.6  Registration  Procedures  .  Whenever  required  to  effect  the
registration of any Registrable Securities,  the Company shall, as expeditiously
as reasonably possible:

                     2.6.1   Prepare  and  file  with  the  SEC  a  Registration
Statement  with respect to such  Registrable  Securities or such  amendments and
post effective amendments to an existing Registration Statement and use its best
efforts to cause such Registration Statement to become effective,  and keep such
Registration  Statement effective for up to 90 days; provided,  however, that no
Registration  Statement  shall  be  required  to  remain  in  effect  after  all
Registrable Securities covered by such Registration Statement have been sold and
distributed as contemplated by such Registration Statement.

                     2.6.2     Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the Prospectus used in connection
with  such  Registration  Statement  as may be  necessary  to  comply  with  the

<PAGE>

provisions  of  the  Securities  Act  with  respect  to the  disposition  of all
securities covered by such Registration Statement.

                     2.6.3     Furnish  to  Holder, without charge, at least one
manually  signed  or  "Edgarized"  copy  and as  many  conformed  copies  as may
reasonable be requested,  of the then effective  Registration  Statement and any
post-effective  amendment thereto,  and one copy of all financial statements and
schedules,  all  documents  incorporated  therein by reference  and all exhibits
thereto (including those incorporated by reference).

                     2.6.4    Deliver to each selling Holder, without charge, as
many copies of the then effective Prospectus  (including each Prospectus subject
to  completion)  and any  amendments or  supplements  thereto as such Holder may
reasonably request.

                     2.6.5    Use  its  best efforts to register and qualify the
securities covered by such Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably  requested by Holder,
provided that the Company shall not be required in connection  therewith or as a
condition  thereto  to qualify to do  business  or to file a general  consent to
service of process in any such states or jurisdictions.

                     2.6.6     In  the  event of an Underwritten Offering, enter
into and perform its obligations under an underwriting  agreement,  in usual and
customary form, with the managing underwriter(s) of such offering.

                     2.6.7     Notify  each  Holder  of  Registrable  Securities
covered by such  Registration  Statement at any time when a Prospectus  relating
thereto is required to be delivered under the Securities Act or the happening of
any event as a result  of which the  Prospectus  included  in such  Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material  fact  required to be stated  therein or  necessary to
make the  statements  therein not  misleading in the light of the  circumstances
then existing.

                     2.6.8     Cause  all such Registrable Securities registered
hereunder to be listed on each securities  exchange on which similar  securities
issued by the Company are then listed.

                     2.6.9     Provide a  transfer  agent  and registrar for all
Registrable  Securities  registered  pursuant  to such  legislation  and a CUSIP
number  for all such  Registrable  Securities,  in each case not later  than the
effective date of such registration.

           2.7  Termination of  Registration  Rights . All  registration  rights
granted  under this Article II shall  terminate  and be of no further  force and
effect seven (7) years after the date following the Company's Initial Offering.

           2.8 Delay of Registration . Holder shall not have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration as
the  result  of  any   controversy   that  might  arise  with   respect  to  the
interpretation or implementation of this Article II.

           2.9       Indemnification.

                     2.9.1   Indemnification by the Company.  The Company agrees
to indemnify and hold harmless, to the full extent permitted by law, but without
duplication,  each  Holder  of  Registrable  Securities,  any  their  respective
officers and directors, if any, and  each Person who controls such Holder within

<PAGE>

the  meaning  of the  Securities  Act,  against  all  losses,  claims,  damages,
liabilities  and  expenses  (including  reasonable  costs of  investigation  and
reasonable  legal fees and expenses)  resulting  from any untrue  statement of a
material  fact in, or any omission of a material  fact required to be stated in,
any  Registration  Statement or in any preliminary or final  Prospectus,  or any
amendment or supplement thereto, or necessary to make the statements therein (in
the case of a  Prospectus  in light of the  circumstances  under which they were
made) not  misleading,  except insofar as the same are caused by or contained in
any  information  furnished  in  writing  to the  Company  by any  Holder or any
underwriter  expressly  for use therein;  provided  that the Company will not be
liable  pursuant  to  this  Section  2.9.1  if  such  losses,  claims,  damages,
liabilities or expenses have been caused by the failure of any selling Holder to
deliver a copy of the Registration Statement or Prospectus, or any amendments or
supplements thereto, after the Company has furnished such copies to such Holder.

                     2.9.2 Indemnification by Holders of Registrable Securities.
In connection with any Registration Statement covering Registrable Securities of
any Holder,  such Holder will furnish to the Company in writing such information
as  the  Company  reasonably  requests  for  use in  connection  with  any  such
Registration  Statement or Prospectus and agrees to indemnify and hold harmless,
to the full extent permitted by law, but without  duplication,  the Company, its
officers,  directors,  stockholders,  employees,  advisors and agents,  and each
Person who  controls  the Company  (within the meaning of the  Securities  Act),
against any losses, claims, damages, liabilities and expenses resulting from any
untrue  statement  of a material  fact in, or any  omission  of a material  fact
required to be stated in, the  Registration  Statement or in any  preliminary or
final Prospectus,  or any amendment or supplement  thereto, or necessary to make
the  statements   therein  (in  the  case  of  a  Prospectus  in  light  of  the
circumstances under which they were made) not misleading, but only to the extent
that such untrue  statement  or  omission is  contained  in any  information  so
furnished in writing by such Holder to the Company  specifically  for  inclusion
therein.  If the  offering  to which the  Registration  Statement  relates is an
Underwritten  Offering,  each  Holder  agrees  to  enter  into  an  underwriting
agreement  in  customary  form  with such  underwriters  and to  indemnify  such
underwriters, their officers and directors, if any, and each Person who controls
such underwriters within the meaning of the Securities Act to the same extent as
hereinabove  provided  with  respect to  indemnification  by such  Holder of the
Company.

                     2.9.3   Conduct of Indemnification Proceedings.  Any Person
entitled  to  indemnification  hereunder  will (i)  give  prompt  notice  to the
indemnifying party of any claim with respect to which it seeks  indemnification,
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel  reasonably  satisfactory to the indemnified party;  provided,  however,
that any Person  entitled to  indemnification  hereunder shall have the right to
employ separate  counsel and to participate in, but not control,  the defense of
such claim, but the fees and expenses of such counsel shall be at the expense of
such indemnified Person,  unless (A) the indemnifying party shall have failed to
assume the defense of such claim and employ counsel reasonably,  satisfactory to
the indemnified party in a timely manner,  or (B) in the reasonable  judgment of
any such  Person,  based upon  written  advice of its  counsel,  a  conflict  of
interest may exist between such Person and the  indemnifying  party with respect
to such claims (in which case, if the Person notifies the indemnifying  party in
writing,  that such Person elects to employ  separate  counsel at the expense of
the  indemnifying  party,  the  indemnifying  party  shall not have the right to
assume the defense of any such claim as to which such  conflict of interest  may
exist).  The  indemnifying  party will not be subject to any  liability  for any
settlement  made without its consent.  No indemnified  party will be required to
consent to the entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such  indemnified  party  of  a release from all liability in respect of such

<PAGE>

claim or litigation. An indemnifying party who is not entitled to, or elects not
to,  assume the defense of the claim will not be  obligated  to pay the fees and
expenses  of  more  than  one  counsel  for  all  parties  indemnified  by  such
indemnifying  party with respect to such claim,  as well as one local counsel in
each relevant jurisdiction.

                     2.9.4  Contribution.  If for any reason the indemnification
provided for in Section 2.9.1 or 2.9.2 hereof is  unavailable  to an indemnified
party or  insufficient to hold it harmless as contemplated by Sections 2.9.1 and
2.9.2 hereof, then the indemnifying party shall contribute to the amount paid or
payable  by the  indemnified  party as a result  of such  loss,  claim,  damage,
liability or expense in such  proportion as is  appropriate  to reflect not only
the relative  benefits  received by the  indemnifying  party and the indemnified
party, but also the relative fault of the indemnifying party and the indemnified
party, as well as any other relevant equitable considerations.  No Person guilty
of  fraudulent  misrepresentation  (within  the meaning of Section 11 (f) of the
Securities  Act) shall be entitled to  contribution  from any Person who was not
guilty of such fraudulent misrepresentations.

           2.10  Assignment  of  Registration  Rights . The  rights to cause the
Company to register  Registrable  Securities  pursuant to this Article II may be
assigned  by Holder to a  transferee  or  assignee  of  Registrable  Securities;
provided,  however,  that no such  transferee  or assignee  shall be entitled to
registration  rights under Sections 2.2, 2.3 or 2.4 hereof unless it acquires at
least 10% of such  transferring  Holder's  shares of Registrable  Securities (as
adjusted for stock splits and  combinations)  and the Company  shall,  within 20
days after such  transfer,  be  furnished  with  written  notice of the name and
address of such  transferee or assignee and the securities with respect to which
such  registration  rights are being  assigned.  Notwithstanding  the foregoing,
rights to cause the  Company  to  register  securities  may be  assigned  to any
subsidiary,  parent,  general  partner,  limited  partner or other  affiliate of
Holder.

           2.11 Amendment of Registration Rights . Any provision of this Article
II may be amended and the observance  thereof may be waived (either generally or
in a particular instance and either  retroactively or prospectively),  only with
the  written  consent  of  the  Company  and  Holders  of at  least  60%  of the
Registrable Securities. Any amendment or waiver effected in accordance with this
Section 2.11 shall be binding upon each Holder and the Company. By acceptance of
any benefits  under this  Article II,  Holder  hereby  agrees to be bound by the
provisions hereunder.

           2.12 Limitation on Subsequent Registration Rights . After the date of
this  Agreement,  the Company shall not,  without the prior  written  consent of
Holders of a majority of the  Registrable  Securities,  enter into any agreement
with any holder or  prospective  holder of any  securities  of the Company  that
would  permit such holder to require that the Company  register  any  securities
held by such holder.

           2.13      Suspension of Sales under Certain Circumstances.

                     2.13.1    Upon  receipt of any notice from the Company that
dispositions  under  the  then  current  Prospectus  must  be  discontinued  and
suspended,   Holder  will  forthwith  discontinue  and  suspend  disposition  of
Registrable  Securities  pursuant to such Prospectus until (i)Holders is advised
in writing by the Company that a new Registration  Statement  covering the offer
of Registrable Securities has become effective under the Securities Act, or (ii)
Holder receives copies of a supplemented or amended  Prospectus  contemplated by
Section 4(a)  hereof,  or (iii) Holder is advised in writing by the Company that
the use of the Prospectus may be resumed.

<PAGE>

                     2.13.2  If at any time following the date hereof any of the
Company's  shares of Common  Stock are to be sold  pursuant  to an  Underwritten
Offering, then for the period commencing 45 days prior to, and expiring 180 days
after, the effective date of such Underwritten Offering,  Holder will not effect
any public  sale or  distribution  of any  Registrable  Securities  or any other
shares of Common Stock of the Company then owned by Holder,  other than pursuant
to such  Underwritten  Offering (if any  Registrable  Securities are included in
such Underwritten Offering).

           2.14  Information by Holder.  Each Holder of  Registrable  Securities
shall  furnish  the  Company  such  information  regarding  such  Holder and the
distribution  proposed by such Holder as the Company may  reasonably  request in
writing and shall be reasonably  required in connection  with any  registration,
qualification or compliance referred to in this Section 2.

           2.15 Current  Public  Information  . The Company  agrees that it will
file all  reports  required to be filed by it under the  Securities  Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if
it ceases to be  required  to file such  reports,  it will,  upon the request of
Holders  owning  a  majority  of  the  Registrable   Securities  (excluding  any
Registrable Securities that have previously been sold pursuant to a Registration
Statement  hereunder  or Rule 144  under  the  Securities  Act),  make  publicly
available  other  information),  and it will  take  such  further  action as may
reasonably be required, in each case to the extent required from time to time to
enable Holder to sell  Registrable  Securities  without  registration  under the
Securities Act within the limitations of the applicable  exemptions  provided by
(x) Rule 144 under the Securities  Act, as such Rule may be amended from time to
time, or (y) any similar regulation hereinafter adopted by the SEC.

           2.16 No  Inconsistent  Agreements  . The Company  has not  previously
entered into and shall not in the future enter into any  agreement,  arrangement
or understanding  with respect to its securities which is inconsistent  with the
rights granted to Holders in this Agreement.

     III. COVENANTS OF THE COMPANY.

           3.1       Basic Financial Information and Reporting .

                     3.1.1     The  Company will maintain true books and records
of account in which full and correct  entries  will be made of all its  business
transactions pursuant to a system of accounting  established and administered in
accordance with generally accepted accounting  principles  consistently applied,
and will set aside on its books all such proper  accruals  and reserves as shall
be required under generally accepted accounting principles consistently applied.

                     3.1.2   As soon as practicable after the end of each fiscal
year of the  Company,  and in any event within 90 days  thereafter,  the Company
will furnish the Investor a consolidated balance sheet of the Company, as at the
end  of  such  fiscal  year,  and  a  consolidated  statement  of  income  and a
consolidated statement of cash flows of the Company, for such year, all prepared
in accordance with generally accepted accounting principles and setting forth in
each case in comparative  form the figures for the previous  fiscal year, all in
reasonable  detail.  Such financial  statements shall be accompanied by a report
and unqualified  opinion thereon by independent  public  accountants of national
standing  selected by the Company's Board of Directors,  together with a copy of
the auditor's letter to management.

<PAGE>

                     3.1.3    The Company will furnish the Investor (i) at least
30 days prior to the beginning of each fiscal year an annual budget  including a
projected income statement, cash flow statement and balance sheet, and operating
plans for such fiscal year, together with a brief qualitative description of the
Company's  plan by the Chief  Executive  Officer in support of such budget;  and
(ii) within 20 business days after the end of each month,  an unaudited  balance
sheet and  statements of income and cash flows for such month and  year-to-date,
prepared in accordance with generally accepted accounting  principles,  with the
exception  that no notes need be attached to such  statements and year-end audit
adjustments  may not  have  been  made,  but  such  statement  shall  set  forth
applicable budget figures and variances from budget, and such statement shall be
accompanied  by a brief  written  report of the  Chief  Executive  Officer  with
respect to  operations,  problems and  achievements  during the prior period and
setting forth goals for the ensuing month or months as appropriate.

                     3.1.4     Within 20 days after the discovery by the Company
of any default or breach by the Company of any of the terms of this Agreement or
the Stock  Purchase  Agreement  or of a material  adverse  event  affecting  the
operations or finances of the Company, the Company shall provide to the Investor
a statement outlining such default or event and management's proposed response.

                     3.1.5  The Company will furnish the Investor promptly after
transmission or filing, and in any event within 10 days thereafter, any reports,
including communications with stockholders or the financial community,  filed by
the Company or its  officers  or  directors  with the  Securities  and  Exchange
Commission.  3.2 Inspection  Rights . The Investor shall have the right to visit
and inspect any of the properties of the Company or any of its subsidiaries, and
to discuss  the  affairs,  finances  and  accounts  of the Company or any of its
subsidiaries with its officers, all at such reasonable times and as often as may
be  reasonably  requested;  provided,  however,  that the  Company  shall not be
obligated  under this Section 3.2 with respect to a competitor of the Company or
with  respect to  information  which the Board of Directors  determines  in good
faith is confidential and should not, therefore, be disclosed.

           3.3  Confidentiality  of Records . The Investor agrees to use, and to
use its best efforts to insure that its authorized representatives use, the same
degree of care as the Investor uses to protect its own confidential  information
to  keep  confidential  any  information  furnished  to  it  which  the  Company
identifies as being  confidential or proprietary (so long as such information is
not  in  the  public  domain),  except  that  the  Investor  may  disclose  such
proprietary or confidential information to any partner,  subsidiary or parent of
the Investor for the purpose of evaluating its investment in the Company as long
as  such  partner,  subsidiary  or  parent  is  advised  of the  confidentiality
provisions of this Section 3.3.

           3.5  Expense  Reimbursement  . The  Company  shall pay the  directors
$2,500 per month  together with a  reimbursement  for  reasonable  out-of-pocket
expenses  incurred by each director in connection with attending the meetings of
the Board of Directors and any committee thereof.

           3.6 Termination of Covenants . All covenants of the Company contained
in Article III of this  Agreement  shall expire and terminate as to the Investor
after the time of effectiveness of the Company's Initial Offering.

     IV. LIMITATIONS ON ISSUANCES, RIGHTS OF FIRST REFUSAL.

<PAGE>

           4.1  Subsequent  Offerings  . Without the  unanimous  approval of the
Board of  Directors,  the  Company  shall not propose to sell or issue after the
date of this Agreement any Equity  Securities  which shall cause the Investor to
own less than 20% of all of the issued and outstanding  Equity Securities of the
Company, other than the Equity Securities excluded by Section 4.6 hereof. If the
Board of Directors  unanimously  approves such an issuance,  the Investor  shall
have a right of  first  refusal  to  purchase  its pro rata  share of all or any
portion of such Equity Securities,  other than the Equity Securities excluded by
Section 4.6 hereof.  The  Investor's pro rata share is equal to the ratio of the
number of shares of  Registrable  Securities  which the Investor  has  purchased
pursuant to the Stock Purchase  Agreement,  to the total number of shares of the
Company's  Registrable  Securities  purchased  by the  Investor  pursuant to the
Purchase Agreement.

           4.2 Exercise of Rights . If the Company  proposes to issue any Equity
Securities,  it  shall  give  the  Investor  written  notice  of its  intention,
describing the Equity  Securities,  the price and the terms and conditions  upon
which the  Company  proposes  to issue  the same.  The  Investor  shall  have 15
business  days from the giving of such notice to agree to purchase  its pro rata
share of the Equity  Securities  for the price and upon the terms and conditions
specified  in the notice by giving  written  notice to the  Company  and stating
therein the quantity of Equity Securities to be purchased.  Notwithstanding  the
foregoing,  the  Company  shall not be  required  to offer or sell  such  Equity
Securities  to the  Investor  if the  Investor  would cause the Company to be in
violation of applicable federal securities laws by virtue of such offer or sale.

           4.3 Issuance of Equity  Securities to Other Persons . If the Investor
elects not to  purchase  its pro rata share of the Equity  Securities,  then the
Company shall have 60 days  thereafter to sell the Equity  Securities in respect
of which the Investor's rights were not exercised, at a price and upon terms and
conditions  no more  favorable  to the Investor  thereof  than  specified in the
Company's notice to the Investor  pursuant to Section 4.2 hereof. If the Company
has not sold such Equity  Securities  within such 60 days, the Company shall not
thereafter  issue or sell any Equity  Securities,  without  first  offering such
securities to the Investor in the manner provided above.

           4.4  Termination  of  Rights of First  Refusal . The  rights of first
refusal  established by this Article IV shall  terminate upon the closing of the
Company's Initial Offering.

           4.5 Transfer of Rights of First Refusal . The rights of first refusal
of the Investor  under this  Article IV may be  transferred  to any  constituent
partner or affiliate  of the  Investor,  to any  successor in interest to all or
substantially all the assets of the Investor, or to a transferee who acquires at
least 10% of the Investor's shares of Registrable Securities.

           4.6 Excluded  Securities . The rights of first refusal established by
this  Article  IV  shall  have no  application  to any of the  following  Equity
Securities:

                     4.6.1   shares of Common Stock (and/or options, warrants or
other Common Stock purchase rights issued pursuant to such options,  warrants or
other rights) issued or to be issued to employees,  officers or directors of, or
consultants  or  advisors to the  Company or any  subsidiary,  pursuant to stock
purchase or stock  option plans or other  arrangements  that are approved by the
Board of Directors,  up to an aggregate amount equal to 10% of the of all of the
issued and outstanding Equity Securities of the Company;

<PAGE>

                     4.6.2   stock  issued  pursuant to any rights or agreements
outstanding as of the date of this Agreement,  options and warrants  outstanding
as of the date of this  Agreement,  and stock issued pursuant to any such rights
or agreements granted after the date of this Agreement, provided that the rights
of first  refusal  established  by this  Article IV applied  with respect to the
initial sale or grant by the Company of such rights or agreements;

                     4.6.3  any Equity Securities issued for consideration other
than cash pursuant to a merger,  consolidation,  acquisition or similar business
combination;

                     4.6.4  any Equity Securities that are issued by the Company
as part of an Initial Offering; or

                     4.6.5  shares of Common Stock issued in connection with any
stock split, stock dividend or recapitalization by the Company.

     V. MISCELLANEOUS.

           5.1 Governing Law . This Agreement shall be governed by and construed
and  enforced  in  accordance  with the  internal  laws of the State of  Arizona
without  reference  to  principles  of  conflict  of laws.  The  parties to this
Agreement  hereby consent to the  jurisdiction in personam of the Superior Court
of the State of  Arizona,  in and for the  County of  Maricopa  or of the United
States  District Court for the District of Arizona,  in any legal  proceeding to
enforce any obligations  under this Agreement,  and agree that venue in Maricopa
County is not inconvenient.

           5.2  Survival  .  The  representations,  warranties,  covenants,  and
agreements  made herein shall survive any  investigation  made by any Holder and
the  closing of the  transactions  contemplated  hereby.  All  statements  as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company  pursuant  hereto in connection  with the  transactions
contemplated  hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.

           5.3 Successors and Assigns . Except as otherwise  expressly  provided
herein,  the  provisions  hereof  shall  inure to the benefit of, and be binding
upon, the successors,  assigns,  heirs,  executors,  and  administrators  of the
parties  hereto and shall  inure to the  benefit of and be  enforceable  by each
person  who  shall be a holder  of  Registrable  Securities  from  time to time;
provided,  however, that prior to the receipt by the Company of adequate written
notice of the transfer of any  Registrable  Securities  specifying the full name
and address of the transferee,  the Company may deem and treat the person listed
as the holder of such shares in its records as the absolute  owner and holder of
such  shares  for all  purposes,  including  the  payment  of  dividends  or any
redemption price.

           5.4  Separability  . In case any provision of the Agreement  shall be
invalid, illegal, or unenforceable,  the validity,  legality, and enforceability
of the  remaining  provisions  shall  not in any  way be  affected  or  impaired
thereby.

           5.5       Amendment and Waiver .

                     5.5.1   Except  as   otherwise   expressly  provided,  this
Agreement  may be  amended  or  modified  only upon the  written  consent of the
Company and the holders of more than a majority of the Registrable Securities.

<PAGE>

                     5.5.2     Except  as  otherwise  expressly  provided,   the
obligations  of the Company and the rights of Holder under this Agreement may be
waived only with the  written  consent of the holders of more than a majority of
the Registrable Securities.

           5.6 Delays or  Omissions  . It is agreed that no delay or omission to
exercise  any right.  power,  or remedy  accruing  to Holder,  upon any  breach,
default or  noncompliance  of the Company under this Agreement  shall impair any
such right,  power,  or remedy,  nor shall it be construed to be a waiver of any
such breach,  default or noncompliance,  or any acquiescence  therein, or of any
similar breach,  default or noncompliance  thereafter  occurring.  It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
Holder's part of any breach, default or noncompliance under the Agreement or any
waiver on Holder's part of any  provisions or conditions of this  Agreement must
be in writing and shall be effective only to the extent  specifically  set forth
in such writing. All remedies, either under this Agreement, by law, or otherwise
afforded to Holder, shall be cumulative and not alternative.

           5.7 Notices . All notices and other  communications  provided  for or
permitted  hereunder  shall  be made in  writing  by  hand-delivery,  registered
first-class  mail,  confirmed  facsimile  with  copy  by  first-class  mail,  or
air-courier guaranteeing overnight delivery:

           (a)     If to a Holder of Registrable Securities, at the most current
address for such Holder, as it appears on the books of the Company; and

           (b)     If  to  the  Company: OneSource Technologies, Inc., 2329 West
Mescal, Suite 304, Phoenix,  Arizona 85029, Attention:  Chief Executive Officer;
fax (602)  216-9611,  or at such other address as may be designated from time to
time by notice given in accordance with the provisions of this Section 5.7.

          All such  notices  and  other  communications  shall be deemed to have
been  delivered and received (i) in the case of personal  delivery or facsimile,
on the date of such  delivery,  (ii) in the case of  overnight  courier,  on the
Business Day after the date when sent, and (iii) in the case of mailing,  on the
fifth Business Day following such mailing.

           5.8 Attorneys' Fees . In the event that any dispute among the parties
to this  Agreement  should result in litigation,  the  prevailing  party in such
dispute  shall be entitled to recover from the losing party all fees,  costs and
expenses of enforcing any right of such  prevailing  party under or with respect
to this  Agreement,  including  without  limitation,  such  reasonable  fees and
expenses of attorneys and accountants,  which shall include, without limitation,
all fees, costs and expenses of appeals.

           5.9 Titles and Subtitles . The titles of the sections and subsections
of this  Agreement  are for  convenience  of  reference  only  and are not to be
considered in construing this Agreement.

           5.10 Construction . The Section headings  contained in this Agreement
are for  reference  purposes  only and will not affect in any way the meaning or
interpretation  of this Agreement.  All terms used in one number or gender shall
be  construed  to include any other number or gender as the context may require.
Whenever  the  words  "include,"  "includes,"  or  "including"  are used in this
Agreement,   they  shall  be  deemed  to  be  followed  by  the  words  "without
limitation."

           5.11  Entire  Agreement  . This  Agreement,  together  with any other
documents and certificates delivered hereunder and the Stock Purchase Agreement,
state the entire  agreement of the Company and the Investor  with respect to the

<PAGE>

subject   matter   hereof,   merge  all  prior   negotiations,   agreements  and
understandings,  if any, and state in full all  representations,  warranties and
agreements which have induced this Agreement.

           5.12  Counterparts  . This Agreement may be executed in any number of
counterparts,  each of which  shall be an  original,  but all of which  together
shall constitute one instrument.

                 [Remainder of page intentionally left blank.]

<PAGE>

           IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement
as of the date set forth in the first paragraph hereof.

COMPANY:

ONESOURCE TECHNOLOGIES, INC.
a Delaware corporation

By: /s/ Jerry Washburn
--------------------------------------
Jerry Washburn
President and Chief Executive Officer

INVESTOR:

BLACKWATER CAPITAL PARTNERS II, L.P.
  a Delaware Limited Partnership

By:  Blackwater Capital Group II, L.L.C.
           a Delaware limited liability company
Its:  General Partner

By: /s/ Steven R.  Green
----------------------------------------
Steven R. Green
Managing Member

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