Document:

Exhibit 10.6

                      AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and entered
into as of 26th day of February,  1999,  among  AMERICOM  USA, INC. (the "Parent
Corporation"),  RMC Diversified  Associates  International  Ltd. (the "Acquiring
Corporation"),  JIM AND JON TECH (the "Target Corporation");  and Jim Heintz and
Jon  Iverson   ("Principal   Shareholders",   "Shareholders"   or   individually
"Shareholder").

RECITALS:

A.   The Boards of Directors of each of Parent Corporation,  Target Corporation,
     and  Acquiring  Corporation  believe  it is in the best  interests  of each
     Corporation and their respective  shareholders  that Acquiring  Corporation
     acquire  Target   Corporation   through  the  statutory  merger  of  Target
     Corporation  with and into  Acquiring  Corporation  (the  "Merger")  and in
     furtherance thereof, have approved the Merger.

B.   Pursuant to the Merger,  among other  things,  and subject to the terms and
     conditions of this Agreement,  (i) all of the issued and outstanding shares
     of common stock,  of the Target  Corporation  ("Target  Corporation  Common
     Stock") shall be converted into the right to receive shares of Common Stock
     of Parent  Corporation and (ii) all of the issued and outstanding shares of
     preferred stock of Target Corporation shall be canceled.

C.   Target  Corporation,  the Shareholder,  Parent  Corporation,  and Acquiring
     Corporation desire to make certain representations,  warranties,  covenants
     and other agreements in connection with the Merger.

D.   It is  agreed  and  understood  between  the  parties  that  the  Principal
     Shareholders have developed certain  operational  computer software as more
     particularly  described in Schedule "D-1" annexed hereto (the "Technology")
     and are prepared to warrant and represent which warranty and representation
     shall  survive  closing  that  the  Technology   operates  in  a  good  and
     workmanlike fashion in accordance with the parameters set forth in Schedule
     "D-2" hereof and paragraph 3.12 hereof

NOW, THEREFORE, in consideration of the covenants,  promises and representations
set forth herein, and for other good and valuable consideration, intending to be
legally bound hereby, the parties agree as follows:

ARTICLE I - THE MERGER

1.1      The  Merger.  At the  Effective  Time (as  defined in Section  1.2) and
         subject to and upon the terms and  conditions of this Agreement and the
         applicable  provisions  of the  Delaware  General  Corporation  Law, as
         amended (the  "Delaware  GCL") and the California  General  Corporation
         Law, as amended (the "California  GCL"),  Target  Corporation  shall be
         merged with and into  Acquiring  Corporation,  the  separate  corporate
         existence of Target Corporation shall cease, and Acquiring  Corporation
         shall continue as the surviving corporation.  The surviving corporation
         after the Merger is hereinafter sometimes referred to as the "Surviving
         Corporation."

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1.2      Effective Time. Unless this Agreement is earlier terminated pursuant to
         Section 8.1, the closing of the Merger (the "Closing") shall take place
         on the  26th  day of  February,  1999,  at the  offices  of the  Parent
         Corporation 124 S. Halcyon Road,  Arroyo Grande,  California,  at 10:00
         o'clock in the  morning  unless  another  place or time is agreed to in
         writing by Acquiring Corporation and Target Corporation.

         The date upon which the Closing  actually  occurs is herein referred to
         as the "Closing  Date."  Simultaneously  with the Closing,  the parties
         hereto shall cause the Merger to be consummated by filing a Certificate
         of Merger (the "Merger Certificate") with the Secretary of State of the
         State of  California.  The time of acceptance by the Secretary of State
         of the State of  California  of such filing shall be referred to herein
         as the "Effective Time."

1.3      Effect of the Merger.  At the Effective  Time, the effect of the Merger
         shall be as provided in the  applicable  provisions  of the  California
         GCL.  Without  limiting the  generality of the  foregoing,  and subject
         thereto, at the Effective Time, all the property,  rights,  privileges,
         powers and franchises of Target  Corporation and Acquiring  Corporation
         shall vest in the Acquiring Corporation, which subsequent to the merger
         shall be  referred  to as the  "Surviving  Corporation"  and all debts,
         liabilities and duties of Target Corporation and Acquiring  Corporation
         shall   become  the  debts,   liabilities   and  duties  of   Surviving
         Corporation.

1.4      Certificate of Incorporation Bylaws.

(a)      The Certificate of Incorporation of Acquiring Corporation, as in effect
         immediately  prior to the Effective  Date,  shall be the Certificate of
         Incorporation of the Surviving Corporation until thereafter amended.

(b)      The Bylaws of Acquiring Corporation,  as in effect immediately prior to
         the Effective  Time,  shall be the Bylaws of the Surviving  Corporation
         until thereafter amended.

1.5      Directors  and  Officers.   The  directors  of  Acquiring   Corporation
         immediately  prior to the Effective Time shall be the initial directors
         of the  Surviving  Corporation.  The officers of Acquiring  Corporation
         immediately  prior to the  Effective  Time,  with the  addition  of Jon
         Iverson as  President  and Chief  Operating  Officer  and Jim Heintz as
         Chief technical Officer, shall be the initial officers of the Surviving
         Corporation,  each to hold office in accordance  with the Bylaws of the
         Surviving Corporation.

1.6      Effect of Merger on the Capital Stock of Target Corporation.

(a)      Exchange of Target  Corporation  Common Stock. As of the Effective Time
         of the Merger,  each share of Target  Corporation  Common Stock that is
         issued and outstanding  immediately  prior to the Effective Time of the
         Merger  shall,  by virtue of the Merger and  without  any action on the
         part of Acquiring Corporation,  Target Corporation, or the Shareholders
         of the Target  Corporation,  be canceled and extinguished and converted
         into the right to receive their pro rata share of Two Hundred  Thousand
         (200,000)  shares of common  stock,  (the  "Common  Stock") from Parent
         Corporation.  Stock certificates representing same will be delivered to
         the shareholders at the effective time.

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(b)      Fractional  Shares.  No fractional share of Parent  Corporation  Common
         Stock shall be issued in the Merger.  In lieu thereof,  any  fractional
         share shall be rounded up or down to the nearest  whole share of Parent
         Corporation  Common Stock (with any  fraction  greater than or equal to
         .50 being rounded up and any fraction less than .50 rounded down).

(c)      Treasury Stock. Any shares of capital stock of Target  Corporation held
         in  the  treasury  of  Target  Corporation  immediately  prior  to  the
         Effective  Time  shall  be  canceled  and   extinguished   without  any
         conversion  thereof  and no Parent  Corporation  Common  Stock or other
         consideration shall be delivered or deliverable in exchange therefor.

(d)      Stock  Options.  Subject to the  provisions of this  Agreement,  at the
         Effective  Time,  the  Parent  Corporation  shall  grant to each of Jon
         Iverson and Jim Heintz an option to purchase 100,000 shares each of the
         Parent  Corporation's  Common  Stock at an exercise  price of $2.00 per
         share,  and such options  shall be subject to the Parent  Corporation's
         qualified employee stock option plan. These options shall be treated as
         fully vested. The options herein described shall be granted by delivery
         of the Stock Option Agreement attached as Schedule "1.6(d)";

(e)      Subject to the provisions of this Agreement, at the Effective Time, the
         Parent  Corporation  shall  grant to each of Jon Iverson and Jim Heintz
         further  options  to  purchase   200,000  shares  each  of  the  Parent
         Corporation's Common Stock at an exercise price of $2.00 per share, and
         such  options  shall be subject to the Parent  Corporation's  qualified
         employee  stock  option  plan.  The  options  shall vest at the rate of
         100,000  shares each, at the end of each  subsequent  year of completed
         employment.  The options herein  described shall be granted by delivery
         of the Stock Option Agreement attached as Schedule "1.6(e)";

(f)      The  above  options  shall be in  addition  to any  others to which the
         Shareholders   might   hereafter   become  entitled  under  any  Parent
         Corporation  employee  stock  option  plan  in  effect  at  Closing  or
         hereafter.

1.7      No Further  Ownership  Rights in Target  Corporation  Common Stock. All
         shares of Parent Corporation Common Stock issued upon the surrender for
         exchange of shares of Target  Corporation  Common  Stock in  accordance
         with the terms  hereof  (including  any cash paid in  respect  thereof)
         shall be deemed to have been issued in full  satisfaction of all rights
         pertaining to such shares of Target Corporation Common Stock, and there
         shall be no further  registration  of  transfers  on the records of the
         Surviving  Corporation of shares of capital stock of Target Corporation
         that were  outstanding  immediately  prior to the Effective  Time.  If,
         after the Effective Time, any stock  certificates  evidencing shares of
         capital  stock of Target  Corporation  are  presented to the  Surviving
         Corporation  for any reason,  they shall be canceled  and  exchanged as
         provided in this Article I.

1.8      Tax  Treatment  of the Merger.  For federal  income tax  purposes,  the
         parties  shall use  reasonable  best efforts to qualify the Merger as a
         tax-free   reorganization   under  the  "forward   triangular   merger"
         provisions of Section  368(a)(1)(A)  and 368(a)(2)(C) of the Code. Each
         party to this  Agreement  has  consulted  with its own tax  advisors in
         connection with the Merger.

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1.9      Taking of Necessary Action;  Further Action.  If, at any time after the
         Effective  Time,  any such further  action is necessary or desirable to
         carry out the  purposes  of this  Agreement  and to vest the  Surviving
         Corporation  with full  right,  title  and  possession  to all  assets,
         property,   rights,   privileges,   powers  and  franchises  of  Target
         Corporation  and Acquiring  Corporation,  the officers and directors of
         Target  Corporation and Acquiring  Corporation are fully  authorized in
         the name of their  respective  corporations  or otherwise to take,  and
         will take, all such lawful and necessary action.

1.10     Cash  Consideration.  The Parent  Corporation  shall pay to each of the
         Shareholders  at the Effective  Time, a cashier check in the sum of One
         Hundred Thousand Dollars ($100,000).

ARTICLE II - REPRESENTATIONS AND WARRANTIES OF TARGET CORPORATION AND THE
             SHAREHOLDERS

Target Corporation and the Principal Shareholders hereby, jointly and severally,
represent and warrant to Acquiring  Corporation,  Each Shareholder  solely as to
himself and, where applicable,  jointly with the Corporation,  hereby represents
and warrants to Acquiring  Corporation and Parent  Corporation and covenants and
agrees as follows:

2.1      Organization.  The Target  Corporation is a corporation duly organized,
         validly  existing and in good  standing  under the laws of the State of
         California.  The Target Corporation has full power and authority to own
         its assets and to carry on its  business as and where such  business is
         now conducted.  The Target Corporation is duly qualified or licensed to
         do business  and is in good  standing in  California  which is the sole
         jurisdiction  in which the nature of its  business or the  character of
         its properties or assets requires such qualification or license (except
         where any  failure to do so does not have a Material  Adverse  Effect).
         Copies of the Formation  Documents of the Target  Corporation,  and all
         amendments thereto,  heretofore delivered to Acquiring  Corporation are
         true,  accurate and complete as of the date of this  Agreement  and are
         attached as Schedule "2.1".

2.2      Capitalization. The number of shares of authorized capital stock of the
         Target  Corporation,  the par value per share, and the number of shares
         of each class of  capital  stock of the  Target  Corporation  which are
         presently  issued and  outstanding  are as set forth on Schedule "2.1".
         Also set  forth in  Schedule  "2.2" is a list of the  holders  of Stock
         along  with an  indication  of the  number of shares  held by each such
         Person. Each Shareholder is the sole shareholder of each share of Stock
         indicated on Schedule  "2.2" as owned by him, free and clear of any and
         all  Encumbrances.  All outstanding  shares of Stock have been duly and
         validly issued and are fully paid and non-assessable and were issued in
         compliance with all applicable  state and federal  securities and other
         laws. There is no other capital stock of any class authorized or issued
         by the Target Corporation.  There are no outstanding options, warrants,
         calls,  commitments,  agreements  or other  rights  to  subscribe  for,
         purchase  or  otherwise   acquire  any  capital  stock  of  the  Target
         Corporation  or securities  convertible  into or  exchangeable  for any
         capital stock of the Target Corporation to which the Target Corporation
         or each Shareholder is or may be bound.

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2.3      Ability to Carry Out Agreement.  The  consummation of the  transactions
         contemplated  hereby,  including,  but not limited  to, the  execution,
         delivery and  performance  of this  Agreement  and all other  documents
         collateral  hereto  or  thereto,  contemplated  hereby or  thereby,  or
         required to effect the  transactions  contemplated  hereby and thereby,
         does not and will not: (a)  constitute a violation of or default under,
         conflict with or result in a breach of (i) the  Formation  Documents of
         the Target  Corporation,  (ii) any terms of any  Contract  to which the
         Business,  the Target  Corporation  or the  Shareholders  are or may be
         bound or constitute a default  thereunder  (either  immediately or upon
         notice,  lapse of time or both), (iii) any Court Order or (iv) to their
         knowledge, any Regulation;  (b) result in the creation or imposition of
         any Encumbrances other than Permitted  Encumbrances or Liability of any
         nature  whatsoever  which  can be  reasonably  be  expected  to  have a
         Material Adverse Effect, or give to any person any interest or right in
         any of the  Stock,  the  Assets of the  Target  Corporation  and/or the
         Business;  or (c) accelerate the maturity of, or otherwise modify,  any
         Contract of the Target Corporation and/or the Business.

2.4      Validity  of  Agreement  -  Authority.  The  execution,   delivery  and
         performance  of this  Agreement  and all other  documents  required  to
         effect the transactions  contemplated  hereby,  and the consummation of
         the transactions  contemplated  hereby and thereby,  have been duly and
         validly  authorized and approved by all necessary action on the part of
         the  Shareholders  and the Target  Corporation.  This Agreement and any
         other  document or instrument  contemplated  by this  Agreement,  after
         execution and delivery by the Shareholders  and the Target  Corporation
         to  Acquiring   Corporation,   shall   constitute   valid  and  binding
         obligations of the Shareholders and the Target Corporation, enforceable
         in accordance with their respective terms, except as the enforceability
         thereof may be limited by  bankruptcy,  reorganization,  moratorium  or
         similar laws relating to or limiting  creditors' rights generally or by
         equitable principles relating to enforceability. No Consent is required
         with  respect  to  the  Shareholders  or  the  Target   Corporation  in
         connection  with  the  execution,  delivery  and  performance  of  this
         Agreement  or any other  agreement  collateral  hereto or  contemplated
         hereby.

2.5      Permits and  Licenses.  No Permits and Licenses are  necessary  for the
         operation of the Business as conducted and presently  anticipated to be
         conducted by the Target  Corporation.  To their  knowledge,  the Target
         Corporation  is in compliance  with all of the terms and  conditions of
         the  Permits  and  Licenses.  The  transactions  contemplated  by  this
         Agreement  shall  not  conflict  with or  result  in the  modification,
         cancellation or termination of any of the Permits or Licenses.

2.6      Compliance with Regulations.  The Assets, the Business,  and the Target
         Corporation  are in  compliance  with all  Regulations  and neither the
         Shareholders or the Target  Corporation have received written notice of
         any violation of any Regulation(s), the violation of which would have a
         Material Adverse Effect on the Business.  Since  inception,  the Target
         Corporation  has not engaged in any  transaction,  maintained  any bank
         account or used any funds except for  transactions,  bank  accounts and
         funds which have been and are  reflected in their  normally  maintained
         Books and Records.

2.7      Financial  Statements.  The Books and Records of the Target Corporation
         fairly and accurately reflect in all material respects the transactions
         to which  the  Target  Corporation

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         is and was a party or by which its properties are and were affected and
         such  Books and  Records  have been  properly  kept and  maintained  in
         accordance  with GAAP,  and will continue to be so kept and  maintained
         through the Closing  Date.  On the Closing  Date such Books and Records
         will be correct and complete and will fairly and accurately present the
         Target Corporation's financial condition and operations in all material
         respects.

2.8      Title to and Condition of Certain  Fixtures and  Equipment.  The Target
         Corporation has good, valid and marketable title to all of its Fixtures
         and Equipment,  wherever located, and the Assets, free and clear of all
         Encumbrances other than Permitted  Encumbrances.  All such Fixtures and
         Equipment  are,  and shall on the  Closing  Date be, in good  operating
         condition and repair,  reasonable wear and tear excepted,  and adequate
         and   sufficient  for  the  operation  of  the  Business  as  currently
         conducted,  and there are no  material  defects  in such  Fixtures  and
         Equipment  as would have a Material  Adverse  Effect on the use of such
         Fixtures and  Equipment in the  Business.  The only asset of the Target
         Corporation is the technology pursuant to schedule d-1.

2.9      Tax Returns and Taxes.

(a)      The Target  Corporation  has duly and timely filed with the appropriate
         Governmental  Entity all tax and other returns and reports  required to
         be filed,  all of which have been accurately  prepared.  All Taxes due,
         owing and payable, or which may be due, owing and payable,  arising out
         of all  operations of the Target  Corporation  for all periods ended on
         February  28,  1999,  have been fully paid or duly  reserved for by the
         Target Corporation in accordance with GAAP in the Financial Statements,
         including,  without limitation, any and all Taxes due, owing or payable
         with respect to employees,  consultants and independent  contractors of
         the  Target  Corporation.  All  Taxes  arising  from  the  date of this
         Agreement to the Closing Date will be, on the Closing Date,  fully paid
         or reserved in accordance with GAAP.  Adequate provisions have been and
         will through the Closing Date be made by the Target  Corporation in its
         Books  and  Records  for  Taxes not  required  to be paid  prior to the
         respective  due dates  therefor.  The Target  Corporation  has received
         written notice from any Governmental  Entity of any deficiency or other
         adjustment that has not been satisfied.  The Target  Corporation is not
         presently  under audit by the Internal  Revenue Service ("IRS") for any
         Taxes,  has not been the subject of an IRS audit,  or has  received any
         notice of a proposed IRS audit.  There are no agreements,  waivers,  or
         other  arrangements  providing for an extension of time with respect to
         the   assessment  of  any  Taxes  or  deficiency   against  the  Target
         Corporation,  nor are  there  any  Actions,  now  pending  or, to their
         knowledge,  threatened against the Target Corporation in respect of any
         Taxes; and

2.10     Labor  Relations.  The  Target  Corporation  is  not  a  party  to  any
         collective   bargaining  or  union   contract,   nor  are  any  of  the
         Shareholders  or the  Target  Corporation  aware of any  current  union
         organization effort with respect to the Target Corporation's employees.
         The Target  Corporation has not received any notice, of, and there have
         not been, any strikes, slowdowns, work stoppages,  lock-outs or threats
         thereof,  by or  with  respect  to  any  of  the  Target  Corporation's
         employees.

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2.11     Status  of  Contracts.  There  are  no  Contracts  between  the  Target
         Corporation  and third parties as relate to, or are connected  with and
         are  parts  of  the  Business.  The  Contracts  represent  all  of  the
         agreements between the Target Corporation and third parties relating to
         the Target Corporation's conduct of the Business.  All of the foregoing
         Contracts  are  valid,  binding  and in full  force and  effect and the
         Target  Corporation  is not a party to or  otherwise  bound by any oral
         agreement or contract.

2.12     Changes or Events.  None of the  following has occurred with respect to
         the Target Corporation:

(a)      any change in the financial condition,  assets, Liabilities,  business,
         prospects or operations,  other than changes in the regular, normal and
         ordinary  course of business  consistent  with past custom or practice,
         which alone or in the aggregate could have a Material Adverse Effect on
         the Target Corporation or the Business;

(b)      any damage,  destruction or loss, as a result of fire,  storm casualty,
         other  acts of God or theft of a  substantial  amount of  Fixtures  and
         Equipment, whether or not covered by insurance, adversely affecting the
         Target  Corporation  or any  of  their  assets  which  alone  or in the
         aggregate  could be reasonably  be expected to have a Material  Adverse
         Effect on the Target Corporation or the Business;

(c)      any  disposition  of or Encumbrance or agreement to dispose of or place
         an Encumbrance upon any of the Target Corporation's  assets, other than
         dispositions  in the regular,  normal and ordinary  course of business,
         consistent with past custom or practice and Permitted Encumbrances;

(d)      any  transaction  relating  to the Target  Corporation  involving  over
         $2,000  entered  into  by the  Target  Corporation  other  than  in the
         regular,  normal and ordinary  course of business  consistent with past
         custom or practice;

(e)      any  adverse  event of  default,  cancellation  or  termination  of any
         Contract  involving over $2,000 between the Target  Corporation and any
         party thereto;

(f)      any Liability involving over $2,000 incurred by the Target Corporation,
         except  Liabilities  incurred and obligations  under Contracts  entered
         into,  in the  regular,  normal  and  ordinary  course  of  the  Target
         Corporation's business;

(g)      any capital  expenditure or commitment for addition to property,  plant
         or equipment of the Target Corporation involving over $2,000;

(h)      any agreement or commitment by the Target Corporation to do or take any
         of the  actions  referred  to in  paragraphs  (a)  through  (h) of this
         Section 5.12.

2.13     Employees and Employee Benefits.

(a)      There  are  no  (a)  employment,  managerial,  advisory  or  consulting
         agreements  to  which  the  Target  Corporation  and any  employee  are
         parties; (b) confidentiality or other agreements protecting proprietary
         processes,  formulae or information to which the Target

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         Corporation and any employee are parties; (c) other written obligations
         of the Target Corporation to any employee;  (d) Employee Plans. Neither
         the Target Corporation,  any of their respective officers or directors,
         has taken any action  directly or  indirectly  to  obligate  the Target
         Corporation to adopt any additional  Employee Plan.  True,  correct and
         complete copies of all Employee Plans and related documents,  including
         amendments thereto, any related trust agreements, any documents setting
         out the Target  Corporation's  personnel  policies and procedures,  any
         insurance contracts under which benefits are provided,  as currently in
         effect,  and  descriptions  of any such plan that is not written,  have
         been supplied to Acquiring Corporation.  Acquiring Corporation has also
         been provided with a copy of the Summary Plan Description,  if any, for
         each  Employee  Plan,  as well as  copies  of any  other  summaries  or
         descriptions  of any such  Employee  Plans that have been  provided  to
         employees or other beneficiaries.

(b)      The Target  Corporation does not maintain any plans or programs and are
         not parties to any agreement providing post-retirement medical benefits
         (other than  benefits  described in this Section and those  required by
         Law), death benefits or other post retirement  welfare benefits.  There
         are no post-retirement welfare benefits or plans;

2.14     Real Property; Leaseholds.

(a)      The Target  Corporation does not own nor lease any real property of any
         nature whatsoever;

2.15     Insurance.  There are no insurance policies in effect;

2.16     Litigation.  There  is no  Action  or  Court  Order  pending,  to their
         knowledge,  threatened,  affecting,  naming or directly  involving  the
         Shareholders,  the  Target  Corporation,  the  Assets or the  Business.
         Neither  the  Shareholders  nor the  Corporation  know of any  facts or
         circumstances  or other events which have occurred or may reasonably be
         expected to recur that could be reasonably expected to give rise to any
         Action or Court Order.

2.17     Related-Party  Transactions.  There exist no transactions or agreements
         between  the  Target  Corporation  and  any  Affiliate  of  the  Target
         Corporation  involving more than $5,000 in amount,  including,  without
         limitation  all  guarantees  by  the  Target  Corporation,  which  have
         occurred between January 1, 1998 and the date of this Agreement.

2.18     Accounts Receivable.  There are no accounts receivable;

2.19     Relationship  with Customers.  The Target  Corporation has no reason to
         believe that  relationships  with its customers are not good commercial
         working  relationships.  No  customer  of the  Target  Corporation  has
         canceled or otherwise  terminated  or threatened to cancel or otherwise
         terminate, its relationship with the Target Corporation,  or has during
         the last twelve (12) months  decreased  materially,  or  threatened  to
         decrease,  its relationship with the Target Corporation or its usage of
         any of the Target  Corporation's  services or  purchases  of the Target
         Corporation's  products. The Target Corporation has not received notice
         that any  customer  intends to take any of the action in the  preceding
         sentence.

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2.20     Proprietary  Rights.  Schedule "D-1" contains a listing of all material
         Proprietary  Rights of the Target  Corporation.  Except as disclosed in
         Schedule "2.20":

(a)      the  Target  Corporation  owns all  right,  title and  interest  in the
         Proprietary  Rights  described  in  Schedule  D-1  (including,  without
         limitation,  exclusive  rights to use and  license  the same)  free and
         clear of any Encumbrances other than Permitted Encumbrances;

(b)      the Target  Corporation  has not granted  any other  party  rights with
         respect to the Proprietary Rights;

(c)      the Proprietary Rights described in Schedule "D-1" are valid;

(d)      the  Proprietary  Rights  described in Schedule  "D-1",  have been duly
         issued and have not been canceled, abandoned or otherwise terminated;

(e)      the Target  Corporation has not received notice of default under any of
         the Proprietary  Rights and, to their  knowledge,  no other party is in
         default thereunder.

2.21     Non-Infringement  of  Proprietary  Rights.  (i) none of the services or
         products provided by the Target Corporation,  or processes,  equipment,
         software  or  technology  used  by  the  Target  Corporation,   or  the
         trademarks,  trade names,  labels or other marks or copyrights  used by
         the Target  Corporation,  infringe the Proprietary  Rights of any other
         Person,  or require the payment of any  royalty,  license fee, or other
         charge  or fee of any  kind  to any  Person,  and  none  of the  Target
         Corporation,  Shareholders  has received any notice of adverse claim by
         any third party with respect thereto,  (ii) all employees of the Target
         Corporation have executed written agreements protecting the Proprietary
         Rights of the  Target  Corporation,  (iii) the Target  Corporation  has
         license  agreements in force to the extent necessary to permit its full
         use of all of the processes  used by it in its operations in accordance
         with  present and planned  practices;  and (iv) the Target  Corporation
         owns or has the right to use  pursuant to the  license(s)  disclosed on
         Schedule "2.20" all Proprietary Rights used in its business.

2.22     Environmental Requirements.

(a)      neither the Target  Corporation nor any other Person has engaged in or,
         to their knowledge, permitted any operations or activities upon, or any
         use or occupancy  of, any  Leasehold,  or any portion  thereof,  or any
         other  property  now or  previously  owned or  operated  by the  Target
         Corporation,  resulting in the storage, emission,  release,  discharge,
         dumping or disposal of any Hazardous  Materials on, under,  in or about
         any Leasehold or any other property now or previously owned or operated
         by the Target  Corporation,  nor have any Hazardous  Materials migrated
         from any  Leasehold or any other  property now or  previously  owned or
         operated by the Target  Corporation  to, upon,  about or beneath  other
         properties,  nor have any Hazardous Materials migrated or threatened to
         migrate from other  properties to, upon, about or beneath any Leasehold
         or any  other  property  now or  previously  owned or  operated  by the
         Corporation;

                                       9
<PAGE>

(b)      there is not,  nor has  there  been,  constructed,  placed,  deposited,
         stored,  disposed of or located on any Leasehold or any other  property
         now or  previously  owned or  operated  by the Target  Corporation  any
         asbestos or lead paint,  (ii) each  Leasehold and its existing uses and
         activities  and  its  prior  uses  and  activities  and  the  uses  and
         activities of other property now or previously owned or operated by the
         Target  Corporation,  comply  and  have at all  times  complied  in all
         material respects with all Environmental Requirements,  and each of the
         Target  Corporation  has  obtained  and  complied  with all Permits and
         Licenses  necessary under applicable  Environmental  Requirements,  and
         (iii) neither the Target Corporation nor any prior owner or occupant of
         any Leasehold or any other property now or previously owned or operated
         by  the  Target  Corporation  or  has  received  any  notice  or  other
         communication   concerning  any  alleged   violation  of  Environmental
         Requirements,  whether  or not  corrected  to the  satisfaction  of the
         appropriate  Governmental  Entity, or any notice or other communication
         concerning   alleged   liability   for   violation   of   Environmental
         Requirements  in connection  with each  Leasehold or any other property
         now or  previously  owned or  operated by the Target  Corporation,  and
         there  exists no  Action or Court  Order  threatened,  relating  to the
         ownership,  use, maintenance of operation of any Leasehold or any other
         property now or previously owned or operated by the Target  Corporation
         or by any  Person,  arising  from  allege  violation  of  Environmental
         Requirements,  or from the  suspected  presence of Hazardous  Materials
         thereon or potential migration thereto, and there are no existing facts
         or  conditions   which  could  give  rise  to  any  such  violation  or
         liabilities; and

(c)      Neither any  Leasehold nor any of the Assets is (or with the passage of
         time  and/or  giving of notice  would be)  subject  to any  private  or
         governmental   Encumbrances   relating  to  Hazardous  Materials  or  a
         violation of an Environmental Requirement.

2.23     Political  Contributions  and Other Payments.  During the past five (5)
         years,  neither the Target Corporation,  Affiliated  Entities,  nor any
         other  Person  acting on behalf of the Target  Corporation,  Affiliated
         Entities,  has (i)  except for lawful  political  contributions  in the
         regular,  normal and ordinary  course of business  consistent with past
         custom or practice, made any payment to any official, employee or agent
         (domestic or foreign) of any Governmental  Entity to wrongfully  induce
         the recipient or the  recipient's  employer to do business with,  grant
         favorable treatment to, or compromise or forego any claim by or against
         the  Target  Corporation,  or (ii)  made  any  significant  payment  or
         conferred any significant benefit which, the Target Corporation, in the
         exercise of  reasonable  business  judgment,  considers  or  reasonably
         should consider to be improper.

2.24     Occupational  Safety and Health Act. The  Corporation  is in compliance
         with all requirements of the Occupational Safety and Health Act and the
         Americans With  Disabilities  Act,  pertaining to the Corporation,  the
         Assets and the Business.

2.25     Consents.  No Consent is required  to be  obtained,  satisfied  or made
         pursuant to any Regulation, Permit or License or Contract in connection
         with the execution,  delivery and  performance of this Agreement by the
         Target Corporation.

2.26     Disclosure.  No representation  or warranty by the Shareholders  and/or
         the Target Corporation in this Agreement,  nor any statement  contained
         in any certificate,  schedule,

                                       10
<PAGE>

         list or other writing  furnished or to be furnished by the Shareholders
         and/or the Target Corporation to Acquiring Corporation pursuant to this
         Agreement  (a)  contains  or shall  contain any untrue  statement  of a
         material  fact,  or (b) omits or shall  omit to state a  material  fact
         necessary in order to make the statements  contained  herein or therein
         not misleading.

2.27     Year 2000 Compliance.  All software  products and components  designed,
         manufactured,   produced  or  sold  by  or  on  behalf  of  the  Target
         Corporation  are  designed  to be used  prior  to,  during,  and  after
         calendar  year 2000 A.D. and will,  to the extent that other  software,
         hardware,  and other components  properly exchange date data with them,
         operate  during each such time period  without  error  relating to date
         data,  specifically including any error relating to, or the product of,
         date data which  represents or references  different  centuries or more
         than one century and will be otherwise Year 2000 Compliant.

2.28     Investor  Status.  Each  Shareholder is taking  ownership of the Parent
         Corporation  Stock for investment  purposes only and not with a view to
         distribute  same  within  the  meaning  of  the  Securities  Act.  Each
         Shareholder  has been provided with an  opportunity to ask questions of
         management  of  Acquiring   Corporation  as  each  Shareholder   deemed
         appropriate.

ARTICLE III - ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS

In addition to the  representations  and warranties made by the  Shareholders in
Article II hereof, each Shareholder hereby individually represents and warrants,
to Acquiring Corporation as follows:

3.1      Title to the Shares.  The  Shareholder  is and as of the Effective Time
         will be the  sole  legal,  beneficial  and  record  owner of all of the
         issued and  outstanding  shares of capital stock of Target  Corporation
         issued in the name of such Shareholder.

3.2      Authority and Capacity. The Shareholder has full legal right, capacity,
         power and authority to execute and deliver this Agreement and all other
         documents,  instruments,  certificates and agreements executed or to be
         executed by the  Shareholder  pursuant  hereto,  and to consummate  the
         transactions contemplated hereby and thereby.

3.3      Absence of Violation.  The execution,  delivery and  performance by the
         Shareholder  of this  Agreement and all other  documents,  instruments,
         certificates   and   agreements   contemplated   hereby  to  which  the
         Shareholder is a party,  the fulfillment of and the compliance with the
         respective   terms  and   provisions   hereof  and  thereof,   and  the
         consummation of the transactions  contemplated  hereby and thereby,  do
         not and will not: (a) conflict  with,  or violate any provision of, any
         laws having applicability to the Shareholder,  or (b) conflict with, or
         result in any breach of, or constitute a default  under,  any agreement
         to which the Shareholder is a party.

3.4      Restrictions  and  Consents.  There  are no  agreements,  laws or other
         restrictions of any kind to which the Shareholder is a party or subject
         that would prevent or restrict the  execution,  delivery or performance
         of this Agreement by the Shareholder.

                                       11
<PAGE>

3.5      Binding Obligation. This Agreement has been duly executed and delivered
         by the Shareholder and, assuming the due  authorization,  execution and
         delivery by Acquiring Corporation and Target Corporation, constitutes a
         legal, valid and binding obligation of such Shareholder, enforceable in
         accordance with its terms, except as such enforceability may be limited
         by bankruptcy, insolvency, reorganization, moratorium and other similar
         laws of  general  applicability  relating  to or  affecting  creditors'
         rights  generally  and by the  application  of  general  principles  of
         equity.

3.6      No Registration  Under the Securities Act. The Shareholder  understands
         that the shares of Parent  Corporation Common Stock to be issued to the
         Shareholder  under  this  Agreement  have  not  been  and  will  not be
         registered   under  the   Securities  Act  of  1933,  as  amended  (the
         "Securities  Act"),  in  reliance  upon  exemptions  contained  in  the
         Securities Act or  interpretations  thereof,  and cannot be offered for
         sale,  sold or  otherwise  transferred  unless  such  shares  of Parent
         Corporation  Common Stock are so  registered  or qualify for  exemption
         from   registration   under  the   Securities   Act.  The   Shareholder
         acknowledges  and  agrees  that each  certificate  representing  Parent
         Corporation  Common Stock issued  pursuant to this  Agreement,  and any
         shares  issued or  issuable  in  respect  of any such  shares of Parent
         Corporation   Common  Stock  upon  any  stock  split,  stock  dividend,
         recapitalization, or similar event, shall be imprinted with a legend in
         substantially  the following  form (in addition to any legend  required
         under applicable state securities laws):

THE SECURITIES  REPRESENTED BY THIS  CERTIFICATE  HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"),  AND MAY NOT BE
TRANSFERRED OR SOLD OTHER THAN (I) PURSUANT TO AN EFFECTIVE  REGISTRATION  UNDER
THE SECURITIES ACT AND OTHER  APPLICABLE  STATE  SECURITIES LAWS OR AN AVAILABLE
EXEMPTION  FROM  SUCH  REGISTRATION,  AND (II)  UPON  RECEIPT  BY THE  ISSUER OF
EVIDENCE  SATISFACTORY  TO IT OF COMPLIANCE  WITH THE  SECURITIES  ACT AND OTHER
APPLICABLE  STATE  SECURITIES  LAWS.  THE ISSUER SHALL BE ENTITLED TO REQUIRE AN
OPINION OF COUNSEL  SATISFACTORY  TO IT WITH  RESPECT TO  COMPLIANCE  WITH THESE
REQUIREMENTS.

The certificates  evidencing the shares of Parent Corporation Common Stock to be
         issued to the  Shareholder  under  this  Agreement  shall also bear any
         legend  required by the  Commissioner  of  Corporations of the State of
         California  or such as are  required  pursuant  to any state,  local or
         foreign law governing such securities.

3.7      Acquisition for  Investment.  The shares of Parent  Corporation  Common
         Stock being issued to the  Shareholder  pursuant to this  Agreement are
         being  acquired  by the  Shareholder  in  good  faith  solely  for  the
         Shareholder's  own account,  for  investment and not with a view toward
         resale or other distribution  within the meaning of the Securities Act.
         The Shareholder  further represents that the Shareholder has no present
         contract,  undertaking,  agreement  or  arrangement  with any person to
         sell, transfer or grant participation to such person or to grant to any
         third  person with  respect to any share of Parent  Corporation  Common
         Stock.  The shares of Parent  Corporation  Common Stock being issued to
         the  Shareholder  pursuant  to this  Agreement  will not be offered for
         sale,

                                       12
<PAGE>

         sold  or  otherwise  transferred  by  the  Shareholder  without  either
         registration or exemption from registration under the Securities Act.

3.8      Evaluation of Merits and Risks of Investment.  The Shareholder has such
         knowledge and  experience  in financial  and business  matters that the
         Shareholder  is  capable  of  evaluating  the  merits  and risks of the
         Shareholder's  investment  in the shares of Parent  Corporation  Common
         Stock being acquired hereunder. The Shareholder further represents that
         the Shareholder:  (i) has received a copy of Parent  Corporation's Form
         8-k as  submitted  including  audit  to  the  Securities  and  Exchange
         Commission  (the  "Commission")  on the 18th of February 1999; (ii) has
         received all the  information  that the  Shareholder has requested from
         Acquiring  Corporation  and  Target  Corporation  that the  Shareholder
         considers  necessary or appropriate for deciding  whether to accept the
         Parent  Corporation  Common  Stock  being  issued  to  the  Shareholder
         pursuant to this Agreement;  (iii) has the ability to bear the economic
         risks of the Shareholder's  prospective  investment;  and (iv) is able,
         without materially impairing the Shareholder's  financial condition, to
         hold the Parent  Corporation  Common Stock for an indefinite  period of
         time and to suffer complete loss on the Shareholder's  investment.  The
         Shareholder  confirms that Acquiring  Corporation has made available to
         the Shareholder and its  representatives  and agents the opportunity to
         ask  questions of the officers  and  management  employees of Acquiring
         Corporation  about the  business and  financial  condition of Acquiring
         Corporation as the Shareholder has requested.

3.9      Forward Looking Information/Risk  Factors. The Shareholder acknowledges
         and agrees that any oral or written forward-looking  statements made by
         or on behalf of Acquiring  Corporation  in  connection  with the Merger
         were made in the  context  of and shall  have been  deemed to have been
         accompanied by the risk factors set forth in Corporation's  Form 8-k as
         submitted  including  audit to the Securities  and Exchange  Commission
         (the  "Commission")  on the  18th of  February  1999;  The  Shareholder
         acknowledges  that actual  results could differ  materially  from those
         projected in or implied by any forward-looking statement.

3.10     Transfer  Limitations.  The  Shareholder  further  agrees  that  unless
         transferred  in  compliance  with  Rule  144   promulgated   under  the
         Securities Act ("Rule 144") promulgated under the Securities Act, prior
         to any  proposed  transfer  of any of the shares of Parent  Corporation
         Common Stock, unless there is in effect a registration  statement under
         the  Securities  Act covering the proposed  transfer,  the  Shareholder
         shall give written notice to Parent  Corporation  of the  Shareholder's
         intention to effect such transfer.  Each such notice shall describe the
         manner and circumstances of the proposed transfer in sufficient detail,
         and shall, if Parent  Corporation so requests,  shall be accompanied by
         either (a) a written opinion of legal counsel who shall be satisfactory
         to Parent Corporation, addressed to Parent Corporation and satisfactory
         in form and substance to Parent  Corporation's  counsel,  to the effect
         that the proposed  transfer of Parent  Corporation  Common Stock may be
         effected  without  registration  under the Securities Act, or (b) a "No
         Action"  letter from the  Commission to the effect that the transfer of
         such   securities   without   registration   will  not   result   in  a
         recommendation by the staff of the Commission that action be taken with
         respect thereto, whereupon the holder of such Parent Corporation Common
         Stock shall be entitled to transfer  such shares of Parent

                                       13
<PAGE>

         Corporation  Common  Stock in  accordance  with the terms of the notice
         delivered  by  the  holder  to  Parent  Corporation.  Each  certificate
         evidencing the shares of Parent Corporation Common Stock transferred as
         above provided shall bear the appropriate  restrictive legend set forth
         in Section 3.6 above,  except that such certificate shall not bear such
         restrictive  legend if in the opinion of counsel for Parent Corporation
         such legend is not required in order to establish  compliance  with any
         provisions of the Securities Act.

3.11     Rule 144  Limitations.  The Shareholder is familiar with the provisions
         of Rule 144,  which in substance  permits the limited  public resale of
         "restricted  securities"  acquired,  directly  or  indirectly  from the
         issuer  thereof (or from an  affiliate  of such issuer) in a non-public
         offering  subject  to  the  satisfaction  of  certain  conditions.  The
         Shareholder further understands that in the event all of the applicable
         requirements of Rule 144 are not satisfied, registration under the 1933
         Act or compliance  with a registration  exemption  would be required to
         sell the shares of Parent Corporation Common Stock received from Parent
         Corporation hereunder.  With a view to making available the benefits of
         certain rules and regulations of the  Commission,  which may permit the
         sale  to the  public  without  registration  of the  shares  of  Parent
         Corporation  Common Stock being issued to the  Shareholder  pursuant to
         this Agreement,  Parent  Corporation  agrees, for a period of two years
         following the Closing Date, to use reasonably diligent efforts to:

(a)      make  and  keep  public  information  available,  as  those  terms  are
         understood  and defined in Rule 144,  at all times after the  effective
         date  that  Acquiring  Corporation  becomes  subject  to the  reporting
         requirements  of the  Securities  Exchange Act of 1934, as amended (the
         "Exchange Act");

(b)      file with the  Commission  in a timely  manner  all  reports  and other
         documents  required of Acquiring  Corporation  under the Securities Act
         and the Exchange Act; and

(c)      so  long  as  any  of  the  Shareholders  owns  any  shares  of  Parent
         Corporation  Common Stock being issued pursuant to this  Agreement,  to
         furnish to the Shareholder  forthwith upon request a written  statement
         by  Acquiring  Corporation  as to its  compliance  with  the  reporting
         requirements of Rule 144, a copy of the most recent annual or quarterly
         report of Acquiring Corporation and such other reports and documents of
         Acquiring  Corporation  and other  information  in the possession of or
         reasonably  obtainable by Acquiring  Corporation as the Shareholder may
         reasonably  request in availing itself of any rule or regulation of the
         Commission  allowing the  Shareholder to sell any such shares of Parent
         Corporation Common Stock without registration.

(d)      that the  Technology  is fit for the purposes for which it was intended
         as set out in Schedule "D-2" and the Principal  Shareholders  agree and
         acknowledge  that the Parent and Acquiring  Corporations are relying on
         the  representations  and  warranties  as to the  effectiveness  of the
         Technology as set forth in Schedule "D-2" hereof for the  determination
         of the purchase  price of the Target  Corporation  and matters  related
         thereto.

(e)      The  target  Corporation  has only  operated  under one name and is not
         known by any other.

                                       14
<PAGE>

ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUIRING CORPORATION

Parent and Acquiring  Corporations  represents and warrant to Target Corporation
and the Shareholders as follows:

4.1      Organization and Qualification.  Acquiring Corporation is a corporation
         duly organized, validly existing and in good standing under the laws of
         the State of California. Acquiring Corporation have the requisite power
         and authority to own, lease and operate its assets and  properties,  to
         carry on its business as now being  conducted  and to perform the terms
         of this Agreement and the transactions  contemplated hereby.  Acquiring
         Corporation is duly  qualified to conduct its business,  and is in good
         standing,  in each  jurisdiction  where the ownership or leasing of its
         properties  or the  nature of its  activities  in  connection  with the
         conduct of its business makes such qualification necessary.

4.2      Authority.  The execution  and delivery of this  Agreement by Acquiring
         and Parent  Corporation  and the  consummation  by Acquiring and Parent
         Corporation of the transactions  contemplated hereby have been duly and
         validly  authorized  by all  necessary  corporate  action  and no other
         corporate  proceedings on the part of Acquiring and Parent  Corporation
         are  necessary  to  authorize  this  Agreement  or  to  consummate  the
         transactions contemplated hereby. This Agreement has been duly executed
         and delivered by Acquiring and Parent Corporation and, assuming the due
         authorization,  execution  and delivery by Target  Corporation  and the
         Shareholders,  constitutes  a legal,  valid and binding  obligation  of
         Acquiring and Parent  Corporation,  enforceable in accordance  with its
         terms,  except as such  enforceability  may be limited  by  bankruptcy,
         insolvency,  reorganization,  moratorium  and  other  similar  laws  of
         general  applicability  relating  to  or  affecting  creditors'  rights
         generally and by the application of general principles of equity.

4.3      No Conflict; Required Filings and Consents.

(a)      The execution and delivery of this  Agreement by Acquiring  Corporation
         do  not,  and  the  performance  by  Acquiring   Corporation  of  their
         obligations under this Agreement will not, (i) conflict with or violate
         the certificate of  incorporation  or bylaws of Acquiring  Corporation,
         (ii)  conflict  with  or  violate  any  law   applicable  to  Acquiring
         Corporation  or their  assets and  properties,  or (iii)  result in any
         breach of or  constitute  a default  under  any note,  bond,  mortgage,
         indenture,  contract,  agreement,  lease, license, permit, franchise or
         other  instrument  or obligation to which  Acquiring  Corporation  is a
         party or by which  Acquiring  Corporation is bound,  or by which any of
         their properties or assets is subject

(b)      The execution and delivery of this  Agreement by Acquiring  Corporation
         does  not,  and  the   performance   of  this  Agreement  by  Acquiring
         Corporation will not, require any consent,  approval,  authorization or
         permit of, or filing with or notification to, any government entity.

4.4      Brokers  and  Finders.  Acquiring  Corporation  has  not  retained  any
         investment banker, broker or finder in connection with the transactions
         contemplated by this Agreement.

                                       15
<PAGE>

4.5      Issuance of Parent  Corporation Common Stock. The shares and options of
         Parent   Corporation   Common  Stock  issued  to  the  Shareholders  in
         connection  with this  Agreement,  when issued,  sold and  delivered in
         accordance with the terms and for the  consideration  expressed in this
         Agreement,  shall  be  duly  and  validly  issued  (including,  without
         limitation,  issued in  compliance  with  applicable  federal and state
         securities laws), fully paid and non-assessable.

ARTICLE V - CONDUCT PRIOR TO THE EFFECTIVE TIME

5.1      Affirmative  Covenants  of  Target  Corporation  and the  Shareholders.
         Target Corporation and the Shareholders hereby covenant and agree that,
         prior to the Effective Time, unless otherwise expressly contemplated by
         this  Agreement or  consented  to in writing by Acquiring  Corporation,
         Target  Corporation  shall (i)  operate  its  business in the usual and
         ordinary  course  consistent with past practices and in accordance with
         applicable  laws;  (ii)  preserve  intact  its  business  organization,
         maintain its rights and franchises,  use its best efforts to retain the
         services  of  its   officers  and  key   employees   and  maintain  its
         relationship with its suppliers, contractors,  distributors,  customers
         and others having  business  relationships  with it; (iii) maintain and
         keep its  properties  and assets in as good repair and  condition as at
         present,  ordinary wear and tear excepted;  and (iv) keep in full force
         and effect insurance comparable in amount and scope of coverage to that
         currently   maintained.   Target   Corporation  shall  promptly  notify
         Acquiring  Corporation  of any event or  occurrence or emergency not in
         the ordinary course of business of Target Corporation, and any material
         event involving Target Corporation.

5.2      Negative Covenants of Target  Corporation and the Shareholders.  Except
         as expressly  contemplated by this Agreement or otherwise  consented to
         in writing by  Acquiring  Corporation,  from the date hereof  until the
         Effective  Time,  Target  Corporation  shall not, and the  Shareholders
         shall cause Target Corporation not to, do any of the following:

(a)      enter into any commitment or transaction  not in the ordinary course of
         business or any commitment;

(b)      enter into any  agreement or issue any purchase  order,  in either case
         involving   payment  by  Target   Corporation   of  more  than  $10,000
         individually or $25,000 in the aggregate;

(c)      enter into any  arrangement  with any person or entity to: (i) transfer
         to such  person or entity or any other  person or entity  any rights to
         the  intellectual  property  of Target  Corporation;  (ii)  acquire any
         rights to the  intellectual  property  of such  person or entity or any
         other  person  or  entity;  or  (iii)  modify  in  any  way  any of the
         intellectual property of Target Corporation;

(d)      enter into or amend any agreements pursuant to which any other party is
         granted marketing,  distribution or similar rights of any type or scope
         with respect to any products of Target Corporation;

(e)      amend or otherwise modify (or agree to do so), or violate the terms of,
         any of the agreements set forth or described in the Disclosure Letter;

                                       16

<PAGE>

(f)      commence any litigation;

(g)      grant  any loans to others or  purchase  debt  securities  of others or
         amend  the  terms of any  outstanding  loan  agreement,  except  in the
         ordinary course of business and consistent with past practices;

(h)      grant any severance or  termination  pay (i) to any director or officer
         or (ii) to any other employee except payments made pursuant to standard
         written agreements outstanding on the date hereof;

(i)      adopt or amend any employee  benefit plan, or enter into any employment
         contract, pay or agree to pay any special bonus or special remuneration
         to any director or employee,  or increase the salaries or wage rates of
         its  employees,   except  in  connection  with  annual  pay  adjustment
         consistent  with past practices  which  increases in the aggregate have
         been  approved by  Acquiring  Corporation  in writing and which for the
         Shareholders have been approved by Acquiring Corporation in writing;

(j)      revalue any of its assets,  including without  limitation  writing down
         the value of  inventory  or writing  off notes or  accounts  receivable
         other than in the ordinary course of business;

(k)      enter into any strategic  alliance or joint  marketing  arrangement  or
         agreement, or any agreement to perform services (including research and
         development services);

(l)      (i) increase the compensation payable to or to become payable to any of
         its directors,  officers or employees,  except for increases in salary,
         wages or bonuses payable or to become payable in the ordinary course of
         business and consistent with past practice; (ii) grant any severance or
         termination pay to, or enter into or modify any employment or severance
         agreement with, any of its directors,  officers or employees;  or (iii)
         adopt or amend any employee benefit plan or arrangement,  except as may
         be required by applicable law;

(m)      declare,  set  aside  or  pay  any  dividend  on,  or  make  any  other
         distribution in respect of, any of its capital stock;

(n)      (i) redeem,  repurchase or otherwise reacquire any share of its capital
         stock or any securities or obligations convertible into or exchangeable
         for any  share  of its  capital  stock,  or any  options,  warrants  or
         conversion  or other rights to acquire any shares of its capital  stock
         or any such securities or obligations;  (ii) effect any  reorganization
         or  recapitalization;  or (iii) split, combine or reclassify any of its
         capital  stock or issue or  authorize  or propose  the  issuance of any
         other  securities  in respect of, in lieu of, or in  substitution  for,
         shares of its capital stock;

(o)      (i) issue,  deliver,  award, grant or sell, or authorize or propose the
         issuance,  delivery,  award,  grant or sale (including the grant of any
         encumbrances)  of,  any  shares  of  any  class  of its  capital  stock
         (including  shares held in treasury) or other  equity  securities,  any
         securities or obligations  directly or indirectly  convertible  into or
         exercisable  or  exchangeable  for  any  such  shares,  or any  rights,
         warrants or options to acquire,  any such shares or  securities  or any
         rights,  warrants or options directly or indirectly to acquire any

                                       17

<PAGE>

         such shares or securities;  or (ii) amend or otherwise modify the terms
         of any such securities,  obligations,  rights, warrants or options in a
         manner inconsistent with the provisions of this Agreement or the effect
         of which  shall be to make such terms  more  favorable  to the  holders
         thereof;

(p)      acquire  or agree to  acquire,  by merging or  consolidating  with,  by
         purchasing  an equity  interest in or a portion of the assets of, or by
         any  other  manner,  any  business  or  any  corporation,  partnership,
         association  or other business  organization  or division  thereof,  or
         otherwise  acquire or agree to acquire  any assets of any other  person
         (other  than the  purchase  of  inventory  in the  ordinary  course  of
         business and consistent with past practice),  or make or commit to make
         any  capital  expenditures  other  than  capital  expenditures  in  the
         ordinary  course  of  business  consistent  with past  practice  and in
         amounts which are set forth and described in Target  Corporation's 1998
         capital budget,  a true and complete copy of which has been provided to
         Acquiring Corporation;

(q)      sell, lease, exchange,  mortgage, pledge, transfer or otherwise dispose
         of, or agree to sell, lease, exchange,  mortgage,  pledge,  transfer or
         otherwise  dispose  of, any of its assets  except for  dispositions  of
         inventory in the ordinary  course of business and consistent  with past
         practice;

(r)      propose or adopt any  amendment  to its  Articles of  Incorporation  or
         Bylaws;

(s)      (i) change any of its  methods  of  accounting  in effect at January 1,
         1997, or (ii) make or rescind any express or deemed  election  relating
         to taxes,  settle or compromise any claim,  action,  suit,  litigation,
         proceeding,  arbitration,  investigation, audit or controversy relating
         to  taxes,  or  change  any of  its  methods  of  reporting  income  or
         deductions  for federal  income tax purposes from those employed in the
         preparation  of the federal  income tax  returns  for the taxable  year
         ending December 31, 1997,  except,  in the case of clause (i) or clause
         (ii),  as may be  required  by law  or  generally  accepted  accounting
         principles, consistently applied;

(t)      prepay,  before the scheduled  maturity  thereof,  any of its long-term
         debt,  or incur any  obligation  for  borrowed  money,  whether  or not
         evidenced by a note, bond, debenture or similar instrument,  other than
         trade payables  incurred in the ordinary course of business  consistent
         with past practices;

(u)      enter into or modify in any material respect any agreement which, if in
         effect as of the date hereof,  would have been required to be disclosed
         in the Disclosure Letter;

(v)      take any action that would or could reasonably be expected to result in
         any of its  representations  and warranties set forth in this Agreement
         being  untrue or in any of the  conditions  to the  Merger set forth in
         Article VIII not being satisfied; or

(w)      agree in writing or otherwise to do any of the foregoing.

                                       18
<PAGE>

ARTICLE VI - ADDITIONAL AGREEMENTS

6.1      Sale of  Shares.  The  parties  hereto  acknowledge  and agree that the
         shares of Parent  Corporation Common Stock issuable in the Merger shall
         constitute "restricted securities" within the meaning of the Securities
         Act. The certificates for the shares of Parent Corporation Common Stock
         to be issued in the Merger shall bear  appropriate  legends to identify
         such privately  placed shares as being  restricted under the Securities
         Act,  to  comply  with  applicable   state   securities  laws  and,  if
         applicable, to notice the restrictions on transfer of such shares.

6.2      Consents and Approvals; Filings and Notices. Target Corporation and the
         Shareholders  shall use  reasonable  efforts to as promptly as possible
         make all filings  with,  provide all notices to and obtain all consents
         and  approvals  from third  parties  required  to be obtained by Target
         Corporation in connection with the transactions contemplated hereunder,
         including,  without  limitation,  all  filings  with,  notices  to  and
         consents and approvals from government entities and other persons.

6.3      Access and  Information.  From the date hereof to the  Effective  Time,
         Target  Corporation  shall  afford  to  Acquiring  Corporation  and its
         officers,   employees,   accountants,   consultants,   legal   counsel,
         representatives  of current and  prospective  sources of financing  and
         other representatives of Acquiring Corporation full and complete access
         during  normal  business  hours  to  the  properties,  books,  records,
         documents,  instruments,  reports, contracts, facilities, premises, and
         equipment relating to Target  Corporation and its properties,  save and
         except the Technology, and to the employees of Target Corporation,  and
         an  opportunity  to review  and copy such  books,  records,  documents,
         instruments,  reports,  contracts  and  other  materials  as  Acquiring
         Corporation may request.

6.4      Confidentiality.  Each party shall hold in confidence all documents and
         information  concerning  the  other  and its  business  and  properties
         (except that either party may disclose such  documents and  information
         to any government entity reviewing the transactions contemplated hereby
         or as  required  in  either  party's  judgment  pursuant  to any  legal
         requirement or in furtherance of the transactions contemplated herein),
         and if the transaction  contemplated  hereby should not be consummated,
         such  confidence  shall  be  maintained,  and all  such  documents  and
         information  (in whatever  form) and copies  thereof shall  immediately
         thereafter be destroyed, or returned to the party originally furnishing
         same.

6.5      Expenses.  Whether  or not the  Merger  is  consummated,  all  fees and
         expenses  incurred in  connection  with the Merger  including,  without
         limitation, all legal, accounting,  financial advisory,  consulting and
         all other fees and expenses of third parties  ("Third Party  Expenses")
         incurred by a party in connection with the negotiation and effectuation
         of the terms and  conditions  of this  Agreement  and the  transactions
         contemplated  hereby,  shall be the obligation of the respective  party
         incurring such fees and expenses.

6.6      Further Action;  Reasonable Best Efforts. Each of the parties shall use
         reasonable best efforts to take, or cause to be taken,  all appropriate
         action,  and do, or cause to be done, all things  necessary,  proper or
         advisable  under  applicable  laws or otherwise to consummate

                                       19
<PAGE>

         and make effective the  transactions  contemplated by this Agreement as
         promptly  as  practicable,  including,  without  limitation,  using its
         reasonable  best  efforts to obtain all  licenses,  permits,  consents,
         approvals,  authorizations,  qualifications  and  orders of  government
         entities and parties to contracts with Target Corporation and Acquiring
         Corporation as are necessary for the transactions contemplated herein.

6.7      Public  Announcements.  No announcement  with respect to this agreement
         will be made by any party  hereto  without  the prior  approval  of the
         other parties.  The foregoing will not apply to any announcement by any
         party  required  in order to  comply  with  laws  pertaining  to timely
         disclosure,  provided  that such party  consults with the other parties
         before making any such announcement.

6.8      Solicitation.  During  the  term  of  this  Agreement,  neither  Target
         Corporation,  any  Shareholder  nor any of its affiliates or any person
         acting on behalf  of such  party  shall  (a)  directly  or  indirectly,
         through a  representative  or  otherwise,  solicit or entertain  offers
         from, or negotiate with or in any manner encourage,  discuss, accept or
         consider  any  proposal of any other  person  relating to any  proposed
         merger,  consolidation,  sale or acquisition of Target Corporation, the
         assets or any capital stock of Target  Corporation,  whether  directly,
         indirectly, through merger, purchase, consolidation or otherwise or (b)
         furnish or cause to be furnished any nonpublic  information  concerning
         Target Corporation to any person.  Target Corporation shall immediately
         notify  Acquiring  Corporation  regarding  any contact  between  Target
         Corporation  or its  representatives  and any  other  person  or entity
         regarding  any such offer or proposal or any related  inquiry and shall
         state the name of such other  person or entity and the  material  terms
         and conditions of any such offer, including the offering price.

6.9      Notification of Certain Matters.  Target  Corporation shall give prompt
         notice to Acquiring  Corporation,  and Acquiring Corporation shall give
         prompt  notice  to  Target  Corporation,   of  (i)  the  occurrence  or
         non-occurrence  of any event, the occurrence or non-occurrence of which
         is likely to cause any representation or warranty of Target Corporation
         or the Shareholders and Acquiring Corporation,  respectively, contained
         in this  Agreement  to be  untrue  or  inaccurate  at or  prior  to the
         Effective Time and (ii) any failure of Target  Corporation or Acquiring
         Corporation,  as the  case  may  be,  to  comply  with or  satisfy  any
         covenant, condition or agreement to be complied with or satisfied by it
         hereunder;  provided, however, that the delivery of any notice pursuant
         to this  Section 6.9 shall not limit or  otherwise  affect any remedies
         available to the party receiving such notice.

6.10     Blue Sky Laws.  Parent  Corporation  shall  take  such  steps as may be
         necessary  to  comply  with  the  securities  and  blue sky laws of all
         jurisdictions  which  are  applicable  to the  issuance  of the  Parent
         Corporation Common Stock pursuant hereto.  Target Corporation shall use
         its best efforts to assist  Parent  Corporation  as may be necessary to
         comply with the securities and blue sky laws of all jurisdictions which
         are  applicable in connection  with the issuance of Parent  Corporation
         Common Stock pursuant hereto.

6.11     Shareholder Approval. As promptly as practicable after the execution of
         this Agreement,  Target Corporation shall submit this Agreement and the
         transactions  contemplated  hereby

                                       20
<PAGE>

         to its  shareholders  for  approval  and  adoption  as  provided by the
         California GCL and Target  Corporation's  Articles of Incorporation and
         Bylaws.  Each of the Shareholders agrees to vote in favor of the Merger
         and to use  reasonable  best  efforts to enable the Closing to occur as
         promptly   as   practicable.   The   materials   submitted   to  Target
         Corporation's  shareholders  shall be subject to review and approval by
         Acquiring   Corporation  and  include   information   regarding  Target
         Corporation,  the  terms  of the  Merger  and  this  Agreement  and the
         unanimous   recommendation   of  the  Board  of   Directors  of  Target
         Corporation  in  favor of the  Merger  and  this  Agreement.  Acquiring
         Corporation  shall  cooperate  with  Target  Corporation  to the extent
         reasonably necessary to accomplish the foregoing, and shall provide all
         information  regarding Acquiring  Corporation or the Merger required by
         Target Corporation in connection therewith.

6.12     Filing with  California  Secretary of State.  Each of the parties shall
         use  reasonable  best  efforts to take,  or to cause to be taken,  such
         actions as may be necessary to  facilitate  the filing,  as promptly as
         practicable after the Closing Date, of the Merger  Certificate with the
         Secretary of State of the State of California  in  accordance  with the
         relevant  provisions of the California GCL. Such actions shall include,
         but shall not be limited to, actions required to obtain a Tax Clearance
         Certificate from the Franchise Tax Board of the State of California.

6.13     Tax Returns.  Acquiring Corporation shall prepare all federal and state
         income  tax  returns  of  Target  Corporation  to be  filed  by  Target
         Corporation  for taxable  periods  ending on or prior to the  Effective
         Time and the  shareholders of Target  Corporation have paid or will pay
         all income and withholding  taxes  attributable to them with respect to
         the  income of  Target  Corporation  for such  periods,  including  any
         withholding associated with the receipt of shares of Target Corporation
         Common  Stock prior to the Merger.  Each of the  parties  hereto  shall
         report the Merger as a tax-free  reorganization under the provisions of
         Sections  368(a)(1)(A)  368(a)(2)(C)  of the  Code and  shall  make all
         requisite  filings  associated   therewith,   including  the  statement
         required  under  Treasury   Regulations  Section  1.368-3.   After  the
         Effective  Time,  Acquiring  Corporation,  on the  one  hand,  and  the
         Shareholders,  on the other hand,  will make available to the other, as
         reasonably requested, all information, records or documents relating to
         the liability for taxes of Target Corporation for all periods ending on
         or prior to the  Effective  Time and will  preserve  such  information,
         records or documents until the expiration of any applicable  statute of
         limitations or extensions thereof.

ARTICLE VII - CONDITIONS PRECEDENT TO ACQUIRING CORPORATION'S OBLIGATIONS ON THE
              CLOSING DATE

Each and every  obligation of Acquiring  Corporation to be performed on or after
the Closing Date shall be subject to the satisfaction,  prior to or concurrently
with the performance of such obligation, of the following conditions precedent:

7.1      Representations and Warranties. The representations and warranties made
         by the  Shareholder  and the  Target  Corporation  in Article V hereof,
         shall each be true, correct and accurate,  in all material respects on,
         as of, and with respect to, the Closing Date, with

                                       21
<PAGE>

         the same  force and  effect as though  they had been made or given
         on, as of, and with respect to the Closing Date.

7.2      No Changes.  From the date of execution  hereof until the Closing Date,
         the  Business  shall  have  been  conducted  in  accordance   with  the
         requirements of Article VIII hereof,  the Target Corporation shall not,
         subsequent  to the date hereof,  have  suffered  any  material  loss or
         damage to its financial condition, business, properties or assets.

7.3      Compliance with Obligations. The Shareholder and the Target Corporation
         shall  have  performed  and  complied  with  all  of  their  respective
         obligations  under this Agreement which are to be performed or complied
         with by them prior to or on the Closing Date, as the case may be.

7.4      Consents.

(a)      The  Shareholder  shall have  obtained  all  necessary  Consents to the
         transactions  contemplated  by  this  Agreement  pursuant  to  (i)  all
         applicable  Regulations  or (ii) the terms of any Contract to which the
         Target Corporation is a party or by which it is bound.

(b)      To the extent that  consummation of the transactions  specified in this
         Agreement might  constitute a breach or violate any Contract absent the
         Consent of another Person which has not been obtained,  the Shareholder
         shall use her best good  faith  efforts  to  obtain  any such  required
         Consent as promptly as possible after the Closing.  If any such Consent
         shall not be obtained the Shareholder,  to the maximum extent permitted
         by  law  and  the  instrument  or  document,  shall  act  as  Acquiring
         Corporation's  agent in order to obtain for it the benefits  thereunder
         and shall  cooperate,  to the maximum  extent  permitted by law and the
         instrument  or  document,  with  Acquiring  Corporation  in  any  other
         reasonable arrangement designed to provide such benefits exclusively to
         Acquiring Corporation.

7.5      Title;   Lien  Search  Report  and   Release(s)  of  Liens.   Acquiring
         Corporation shall have received a lien search report, dated on or about
         the  Closing  Date,  issued by a  reputable  third  party  search  firm
         selected by the  Shareholder  and acceptable to Acquiring  Corporation,
         reflecting that no Encumbrances  other than Permitted  Encumbrances are
         outstanding as against the Target Corporation, the Stock, the Assets or
         the  Business,   and  Acquiring  Corporation  shall  have  additionally
         received,  in the form suitable for recording,  any and all instruments
         necessary  or  required  in order to remove of record any  Encumbrances
         other than Permitted  Encumbrances affecting any of the Assets in favor
         of any party,  and the  Shareholder  shall have arranged for the filing
         thereof,  including  payment of any  applicable  fees or other charges,
         with the proper local and state authorities in each jurisdiction  where
         any of the  Assets is  located  in a manner  sufficient  to remove  and
         release all such liens, encumbrances and/or security interests.

7.6      Good Standing/Subsistence Certificate. Acquiring Corporation shall have
         received  a  good  standing/subsistence   certificate  for  the  Target
         Corporation dated not more than ten (10) days prior to the Closing Date
         issued by the Secretary of State of the State of California.

                                       22
<PAGE>

7.7      Satisfactory   Investigation.    Acquiring   Corporation   shall   have
         satisfactorily completed its investigation of the business,  assets and
         financial  condition of the Target  Corporation in connection  with the
         transactions  contemplated  hereby and shall have been  satisfied  with
         such result.  Acquiring Corporation shall have satisfactorily completed
         its investigation of any event or condition arising or discovered after
         the date of this Agreement which could reasonably be expected to result
         in a failure of any of Acquiring Corporation's  conditions hereunder to
         be fulfilled.

7.8      Resignations  of Directors and Officers.  Acquiring  Corporation  shall
         have received  resignations duly executed by all directors and officers
         of the Target Corporation which shall be dated the Closing Date.

7.9      Transfer Documents.  Acquiring Corporation shall have received good and
         sufficient  instruments  and documents of  conveyance  and transfer all
         dated the Closing Date, in form and substance  reasonably  satisfactory
         to Acquiring  Corporation  and its counsel,  as shall be necessary  and
         effective  to convey,  transfer  and  assign to, and vest in  Acquiring
         Corporation all of the Shareholder's  right,  title and interest in and
         to the Stock,  consisting of good, valid and marketable title, free and
         clear of all Encumbrances.

7.10     Agreements,  Etc.  Acquiring  Corporation shall have taken and received
         possession of all of the agreements,  contracts,  commitments,  leases,
         plans, bids, quotations,  proposals, licenses, permits, authorizations,
         instruments,  books of account,  computer  programs  and  software  and
         licenses  thereto,  all  machine  readable  data files  relating to the
         Business as of the  Effective  Time and hard copies  relating  thereto,
         manuals and  guidebooks,  customer and supplier  lists,  sales records,
         files,  correspondence  and other documents,  books,  records,  papers,
         files and data  belonging to the Target  Corporation  which are part of
         the  Assets or relate to the  Business;  and  simultaneously  with such
         delivery,  all such steps will be taken as may be  required  to put the
         Acquiring Corporation in actual possession and operating control of the
         Assets.

7.11     Other Documents,  Etc.  Acquiring  Corporation  shall have received all
         other documents,  instruments and other things required to be delivered
         pursuant to this Agreement  including,  without limitation,  all of the
         items required by Article VII hereof.

7.12     Results of Due Diligence and Legal Analysis.  The Acquiring Corporation
         shall have conducted its legal and accounting analysis of issues deemed
         relevant by the Acquiring Corporation and the Acquiring Corporation has
         been  satisfied  with the results and  information  obtained  from such
         legal and accounting analysis.

7.13     Other  Conditions.  If any of the  conditions  precedent  to  Acquiring
         Corporation's  obligations  hereunder  shall not be satisfied as of the
         Closing  Date,  Acquiring  Corporation  may,  in  addition to its other
         rights and remedies,  (i) terminate this Agreement,  or (ii) waive such
         default  and  proceed  with  performance  of this  Agreement.  Any such
         termination   or  waiver  shall  be  without   prejudice  to  Acquiring
         Corporation's other rights and remedies arising from the default.

                                       23
<PAGE>

7.14     No  Injunctions  or Restraints;  Illegality.  No temporary  restraining
         order, preliminary or permanent injunction or other order issued by any
         court of competent jurisdiction or other legal restraint or prohibition
         preventing the consummation of the Merger shall be in effect, nor shall
         any  proceeding  brought by an  administrative  agency or commission or
         other governmental  authority or instrumentality,  domestic or foreign,
         seeking any of the foregoing be pending;  nor shall there be any action
         taken,  or any statute,  rule,  regulation or order  enacted,  entered,
         enforced  or  deemed   applicable  to  the  Merger,   which  makes  the
         consummation of the Merger illegal.

7.15     Legal Opinions.  Acquiring  Corporation  shall have received an opinion
         from Kim Mistretta, counsel to Target Corporation and the Shareholders,
         in form reasonably  satisfactory to Acquiring Corporation to the effect
         set forth in Schedule  "7.15" as to the ownership of the  Technology in
         Target  Corporation  and all other  matters  relating to the  corporate
         status of the Target Corporation.

ARTICLE VIIA - CONDITIONS PRECEDENT TO TARGET CORPORATION'S OBLIGATIONS ON THE
               CLOSING DATE

7A.1     Target Corporation and Shareholders shall have received an opinion from
         Groom  and  Cave,   counsel  to  Parent   Corporation   and   Acquiring
         Corporation,  in form reasonably satisfactory to Target Corporation and
         Shareholders in form as set forth on Schedule 7A.1, as follows:

(a)      Neither  the  execution   and  delivery  of  this   Agreement  nor  the
         consummation of the transactions, nor issuance of the stock or options,
         contemplated  hereby will (i) violate any  provision  of the  Articles,
         Bylaws, or other internal corporate  documents or resolutions of Parent
         or  Acquiring  Corporation  (ii)  violate,  or be in  conflict  with or
         constitute a default under, any agreement or commitment to which Parent
         or  Acquiring  Corporation  is a party or by which  Parent or Acquiring
         Corporation  is  bound,  or (iii)  violate  any  statute  or law or any
         judgment,   decree,   order,   regulation  or  rule  of  any  court  or
         governmental authority,  including,  without limitation, the SEC or any
         security exchange.

(b)      Except  for the  consents  set  forth in  Section  4.5  herein,  (i) no
         consent,  approval  or  authorization  of,  or  declaration,  filing or
         registration with, any governmental or regulatory authority and (ii) no
         consent of any other person,  including,  without limitation,  consents
         from shareholders, parties to loans, contracts, or other agreements, is
         required in connection with the execution,  delivery and performance of
         this  Agreement,  or the  issuance  of the shares or options for shares
         contemplated hereby.

ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER

8.1      Termination.  Except as provided in Section 8.2 below,  this  Agreement
         may be  terminated  and the Merger  abandoned  at any time prior to the
         Effective Time:

(a)      by  mutual  written   consent  of  Acquiring   Corporation  and  Target
         Corporation;

(b)      by either party if that party is not then in breach of its  obligations
         under this  Agreement and if other either party shall have breached any
         of their representations, warranties,

                                       24
<PAGE>

         covenants  or  agreements  contained  in this  Agreement,  or any  such
         representation  or warranty shall have become untrue,  in any such case
         such that the conditions precedent to the obligation of either party to
         close,  will not be  satisfied  and such  breach has not been  promptly
         cured  within ten (10) days  following  receipt  by the other  party of
         written notice of such breach;

(c)      by  either  Acquiring  Corporation  or  Target  Corporation  if (i) any
         decree,  permanent injunction,  judgment,  order or other action by any
         court of competent  jurisdiction or any government entity preventing or
         prohibiting  consummation  of the Merger  shall have  become  final and
         nonappealable;  or (ii) there shall be any statute, rule, regulation or
         order enacted, promulgated or issued or deemed applicable to the Merger
         by any  government  entity that would make  consummation  of the Merger
         illegal;

(d)      by Acquiring  Corporation  if there shall be any action  taken,  or any
         statute,  rule,  regulation or order enacted,  promulgated or issued or
         deemed applicable to the Merger by any government entity,  which would:
         (i)  prohibit  Acquiring  Corporation's  ownership  or operation of any
         portion of the business of Target  Corporation or (ii) compel Acquiring
         Corporation or Target Corporation to dispose of or hold separate all or
         a portion of the business or assets of Target  Corporation or Acquiring
         Corporation as a result of the Merger;

(e)      by either party if the  Effective  Time has not occurred on or prior to
         March 15,  1999  (unless  such date  shall be  extended  by the  mutual
         written consent of the parties); or

(f)      by Acquiring  Corporation if an event having a Material  Adverse Effect
         on  Target  Corporation  shall  have  occurred  after  the date of this
         Agreement.

Where action is taken to terminate this Agreement  pursuant to this Section 8.1,
it  shall be  sufficient  for  such  action  to be  authorized  by the  Board of
Directors (as applicable) of the party taking such action.

8.2      Effect of  Termination.  If this  Agreement is  terminated  pursuant to
         Section 8.1, this Agreement shall forthwith become void and there shall
         be no liability or obligation  on the part of any party hereto,  except
         that the Target  Corporation  shall be required to forthwith  repay any
         and all monies  advanced  pursuant to the loan agreement  together with
         interest accrued thereon as hereinafter set forth.

8.3      Amendment. This Agreement may not be amended except by an instrument in
         writing signed by the parties hereto.

8.4      Waiver.  At any time prior to the Effective  Time,  the parties may (a)
         extend the time for the  performance of any of the obligations or other
         acts  of  the  other  party,   (b)  waive  any   inaccuracies   in  the
         representations  and  warranties  contained in this Agreement or in any
         document  delivered pursuant to this Agreement and (c) waive compliance
         by the other party with any of the  agreements or conditions  contained
         in this Agreement.  Any such extension or waiver shall be valid only if
         set forth in an instrument in writing signed on behalf of such party.

                                       25
<PAGE>

ARTICLE IX - SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION; REMEDIES

9.1      Survival  of  Representations.  All of  Target  Corporation's  and  the
         Shareholders'  representations  and warranties  made herein or pursuant
         hereto shall be deemed made on and as of the  Effective  Time as though
         such  representations  and warranties were made on and as of such date,
         and all such representations and warranties shall survive the Effective
         Time and any investigation,  audit or inspection at any time made by or
         on  behalf  of any party  hereto,  as  follows:  (a)  unless  otherwise
         specified  below,  representations  and warranties  shall survive for a
         period of three years after the Effective Time; (b) representations and
         warranties  with respect to taxes shall survive until the expiration of
         the  applicable  statute  of  limitations;   and  (c)  representations,
         warranties  and covenants for matters  relating to title to the capital
         stock of Target  Corporation shall continue in full force and effect in
         perpetuity.  Notwithstanding  anything  herein  to  the  contrary,  any
         representation  or  warranty  which is the  subject of a claim which is
         asserted  in  writing  reasonably  and  in  good  faith  prior  to  the
         expiration of the applicable  period set forth above shall survive with
         respect to such claim or dispute until the final resolution thereof.

9.2      Agreement of  Shareholders  to Indemnify.  The  Principal  Shareholders
         hereby jointly and severally,  and each of the Shareholders  other than
         the Principal  Shareholders  hereby  individually,  agree to indemnify,
         defend  and  hold  harmless  Acquiring  Corporation  and its  officers,
         directors,  employees,  agents and representatives  (collectively,  the
         "Indemnified  Persons") from and against and in respect of all demands,
         losses,  claims,  actions  or causes of action,  assessments,  damages,
         liabilities,   costs  and  expenses,   including,  without  limitation,
         interest,  penalties and reasonable  attorneys' fees and disbursements,
         excluding  any  lost  profits,   lost  revenue  or  opportunity   costs
         (collectively,  "Losses")  resulting from,  imposed upon or incurred by
         the  Indemnified  Persons,  directly  or  indirectly,  by  reason of or
         resulting from any misrepresentation or breach of any representation or
         warranty,  given or made by the  Shareholders or Target  Corporation in
         this Agreement or in any document,  certificate or agreement  furnished
         by or on behalf of any such party pursuant to this Agreement;

(a)      notwithstanding   the   foregoing,   nothing   herein  shall  limit  an
         Indemnified  Person's  remedies  in the  event of fraud or  intentional
         deception on the part of Target  Corporation  or any  Shareholder  with
         respect  to  any  of  the  obligations  of  Target  Corporation  or the
         Shareholders under this Agreement.

9.3      Notice of Losses.

(a)      If an Indemnified  Person believes that it has suffered or is likely to
         suffer any Losses against which it is indemnified  pursuant hereto,  it
         shall  notify the  Shareholders  promptly  in writing  describing  such
         Losses, the amount thereof,  if known, and the method of computation of
         such  Losses,  all  with  reasonable  particularity  and  containing  a
         reference to the  provisions of this Agreement in respect of which such
         Losses  have  occurred.  If any  action  at law or  suit in  equity  is
         instituted  by or  against  a third  party  with  respect  to which any
         Indemnified  Person intends to claim any liability or expense as Losses
         under

                                       26
<PAGE>

         this Article IX, any such Indemnified  Person shall promptly notify the
         Shareholders  of such action or suit.  The  failure of any  Indemnified
         Person  to give  notice  as  provided  herein  shall  not  relieve  any
         Shareholder of his respective  obligations under this Article IX unless
         such failure results in actual detriment to such Shareholder,  and only
         to the extent of such detriment.

(b)      In  calculating  any Losses (i) there shall be no reduction for any tax
         benefits  with  respect  to any  Losses;  and  (ii)  there  shall be no
         increase for taxes  imposed upon the receipt of any  indemnity  payment
         with respect to any Losses.

(c)      The amount to which an Indemnity  shall be entitled  under this Article
         IX shall be determined (i) by written agreement between the Indemnified
         Person and the Shareholders;  or (ii) if the Indemnified Person and the
         Shareholders  are  unable to agree as to any claim for  indemnification
         hereunder  within  sixty  (60)  days,  such  claim may be  referred  to
         arbitration  by  either  party in  accordance  with the  provisions  of
         Section 9.6 hereof.

9.4      Third  Party  Claims.  If a third  party  asserts a Claim  against  any
         Indemnified  Person,  the Indemnified Person shall promptly give notice
         of such Claim in accordance  with Section 9.3 above.  The  Shareholders
         shall be entitled to assume the  defense of such Claim,  including  the
         employment  of  counsel  reasonably  satisfactory  to  the  Indemnified
         Person;  provided,  however,  that,  in the event that the  Indemnified
         Person  reasonably  determines  in good  faith  that  such  Indemnified
         Person's  interests with respect to such Claim cannot  appropriately be
         represented by the Shareholders, such Indemnified Person shall have the
         right to assume  control of the  defense of such Claim and to have such
         Indemnified  Person's  reasonable  expenses  reimbursed  promptly  with
         respect to such Claim. In addition, in the event that the Shareholders,
         within a reasonable time after notice of any such Claim, fail to defend
         any Indemnified Person, such Indemnified Person (upon further notice to
         the Shareholders) shall have the right to undertake the defense of such
         Claim for the account of the  Shareholders and to have such Indemnified
         Person's  reasonable  expenses reimbursed promptly with respect to such
         Claim.  Regardless  of which  party is  controlling  the defense of any
         Claim, no settlement of such Claim may be agreed to without the written
         consent of each of the Indemnified  Person,  which consent shall not be
         unreasonably withheld. The controlling party shall deliver, or cause to
         be  delivered,  to the  other  parties  copies  of all  correspondence,
         pleadings,   motions,  briefs,  appeals  or  other  written  statements
         relating to or  submitted  in  connection  with the defense of any such
         Claim,  and timely  notices of any  hearing or other  court  proceeding
         relating to such Claim.

9.5      No  Recourse  Against  Target  Corporation.   The  Shareholders  hereby
         irrevocably  waive  any  and  all  right  to  recourse  against  Target
         Corporation  with  respect  to any  misrepresentation  or breach of any
         representation,   warranty   or   indemnity,   given  or  made  by  the
         Shareholders or Target  Corporation in this Agreement and any document,
         certificate and agreement  entered into or delivered  pursuant  hereto.
         The   Shareholders   shall  not  be  entitled  to  contribution   from,
         subrogation to or recovery  against Target  Corporation with respect to
         any liability of the Shareholders or Target  Corporation that may arise
         under or pursuant to this  Agreement or the  transactions  contemplated
         hereby.

                                       27
<PAGE>

9.6      Binding Mediation/Arbitration.

(a)      None of the  parties  shall  institute  an  arbitration  proceeding  to
         resolve a dispute between the parties hereunder before the parties have
         sought to resolve the dispute through direct negotiation with the other
         parties.  If the dispute is not resolved  within  fifteen (15) Business
         Days after a demand for direct  negotiation,  the parties shall attempt
         to resolve the dispute through mediation  conducted in San Luis Obispo,
         California.  If the parties do not promptly  agree on a mediator,  then
         any of the parties may notify the American Arbitration Association,  to
         initiate selection of a mediator from the commercial dispute resolution
         panel.  The fees and expenses of the mediator  shall be paid equally by
         the parties.  If the mediator is unable to  facilitate a settlement  of
         the dispute  within a reasonable  period of time,  as determined by the
         mediator,  the mediator shall issue a written  statement to the parties
         to that  effect  and the  aggrieved  party(ies)  may then  seek  relief
         through arbitration, which shall be binding, before a single arbitrator
         pursuant  to  the   Commercial   Arbitration   Rules  of  the  American
         Arbitration  Association (the "Association").  The place of arbitration
         shall be San Luis Obispo,  California.  Arbitration may be commenced at
         any time by any party  seeking  arbitration  by  written  notice to the
         other party(ies) by first class mail,  postage prepaid.  The arbitrator
         shall be selected by the joint agreement of the parties, but if they do
         not so agree within  fifteen (15)  Business  Days after the date of the
         notice  referred to above,  the selection shall be made pursuant to the
         rules from the panels of  arbitrators  maintained by such  Association.
         The arbitrator shall render his decision within one hundred eight (180)
         days of  appointment.  Any award  rendered by the  arbitrator  shall be
         final,  conclusive  and binding upon the parties hereto and there shall
         be no right of appeal  therefrom.  Judgment upon the award  rendered by
         the arbitrator may be entered by any court having jurisdiction thereof.
         Each  party  shall  pay its own  costs  and  expenses  of  arbitration,
         including   attorneys'  fees  and  expenses  of  the  arbitrator.   The
         arbitrator  shall not be  permitted  to award  punitive or similar type
         damages under any circumstances.

ARTICLE X - GENERAL PROVISIONS

10.1     Notices.  All notices and other  communications  hereunder  shall be in
         writing  and  shall be  deemed  given  if  delivered  personally  or by
         commercial  messenger or courier  service,  or mailed by  registered or
         certified mail (return  receipt  requested) or sent via facsimile (with
         acknowledgment  of  complete   transmission)  to  the  parties  at  the
         following  addresses  (or at such other address for a party as shall be
         specified by like notice):

(a)      if to Acquiring Corporation to:
with a copy to:

                  Mr. Robert M. Cezar,
                  President
                  Americom USA, Inc.
                  124 South Halcyon Road
                  Arroyo Grande, CA 93420
                  Telephone:  (805) 542-6700
                  Telefax:  (805) 473-4976

                                       28
<PAGE>

                  With a copy to:

                    Tim Hopkins                     and to Jayson B. Schwarz
                    Groom and Cave                  Schwarz, Gillen
                                                    2040 Yonge St., Ste. 220,
                                                    Toronto, Ontario,
                                                    Canada, M4S 1Z9
                    Telephone:  (408) 286-3300      Telephone - (416) 486-2040
                    Telefax:  (408) 286-3423           Telefax - (416) 486-3325

(b)      if to Target Corporation or the Shareholders, to:

                    Jim & Jon Tech          Jim Heintz          Jon Iverson
                    687 Islay St. Unit 5,   277 El Portal Dr.   9825 El Enchanto
                    San Luis Obispo, CA     Pismo Beach, CA     Atascadero, CA
                    93401                   93449               93422

                  With a copy to:

                    Kim Mistretta
                    1101 Marsh St. Suite C,
                    San Luis Obispo, CA 93401

10.2     Remuneration.  Jon Iverson  shall  receive an annual salary of $96,000,
         until such time as Parent  Corporation shall achieve its first month of
         profitability  and  then  his  annual  salary  shall  be  increased  to
         $120,000.  Upon the Parent Corporation achieving its first full quarter
         of  profitability  his annual salary shall be increased to $144,000 and
         he shall be entitled to the same incentive  plans that are  established
         from time to time for key  employees  of the  Parent  Corporation.  The
         terms of his  employment  in all other  respects  shall be  governed in
         accordance  with  the  generally   accepted  practices  of  the  Parent
         Corporation  and he  shall  be  treated  parri  passu  with  all  other
         employees as relates to profit sharing.

10.3     Remuneration.  Jim Heintz  shall  receive an annual  salary of $96,000,
         until such time as Parent  Corporation shall achieve its first month of
         profitability  and  then  his  annual  salary  shall  be  increased  to
         $120,000.  Upon the Parent Corporation achieving its first full quarter
         of  profitability  his annual salary shall be increased to $144,000 and
         he shall be entitled to the same incentive  plans that are  established
         from time to time for key  employees  of the  Parent  Corporation.  The
         terms of his  employment  in all other  respects  shall be  governed in
         accordance  with  the  generally   accepted  practices  of  the  Parent
         Corporation  and he  shall  be  treated  parri  passu  with  all  other
         employees as relates to profit sharing.

10.4     Headings.  The headings  contained in this  Agreement are for reference
         purposes  only  and  shall  not  affect  in  any  way  the  meaning  or
         interpretation of this Agreement.

                                       29
<PAGE>

10.5     Severability.  If any  term or other  provision  of this  Agreement  is
         invalid,  illegal or incapable of being  enforced by any rule of law or
         public  policy,  all other  conditions and provisions of this Agreement
         shall  nevertheless  remain  in full  force  and  effect so long as the
         economic or legal substance of the transactions  contemplated hereby is
         not affected in any manner  materially  adverse to any party. Upon such
         determination  that any term or other provision is invalid,  illegal or
         incapable of being enforced, the parties hereto shall negotiate in good
         faith to modify this  Agreement so as to effect the original  intent of
         the parties as closely as possible in an  acceptable  manner to the end
         that  transactions  contemplated  hereby  are  fulfilled  to the extent
         possible.

10.6     Entire  Agreement.  This  Agreement  (together  with the Exhibits,  the
         Disclosure  Letter and the other documents  delivered  pursuant hereto)
         constitutes the entire agreement of the parties and supersede all prior
         agreements  and  undertakings,  both  written  and  oral,  between  the
         parties, or any of them, with respect to the subject matter hereof and,
         except as  otherwise  expressly  provided  herein,  are not intended to
         confer upon any other person any rights or remedies hereunder.

10.7     Specific Performance.  The transactions  contemplated by this Agreement
         are unique.  Accordingly,  each of the parties  acknowledges and agrees
         that,  in addition to all other  remedies to which it may be  entitled,
         each  of the  parties  hereto  is  entitled  to a  decree  of  specific
         performance, provided such party is not in material default hereunder.

10.8     Assignment.  Neither this Agreement nor any of the rights, interests or
         obligations  hereunder  shall be assigned by any of the parties  hereto
         (whether by operation of law or  otherwise)  without the prior  written
         consent of the other party.  Subject to the  preceding  sentence,  this
         Agreement  shall  be  binding  upon,  inure  to the  benefit  of and be
         enforceable by the parties and their respective successors and assigns.

10.9     Third Party  Beneficiaries.  This  Agreement  shall be binding upon and
         inure solely to the benefit of each party  hereto,  and nothing in this
         Agreement,  express or implied, is intended to or shall confer upon any
         other  person  any right,  benefit  or remedy of any nature  whatsoever
         under or by reason of this Agreement.

10.10    Governing  Law. This  Agreement  shall be governed by, and construed in
         accordance  with, the laws of the State of Delaware,  regardless of the
         laws  that  might  otherwise  govern  under  applicable  principles  of
         conflicts of law.

10.11    Counterparts.  This  Agreement  may be executed and delivered in one or
         more  counterparts,  and by the  different  parties  hereto in separate
         counterparts, each of which when executed and delivered shall be deemed
         to be an original but all of which taken together shall  constitute one
         and the same agreement.

10.12    Further Assurances.  From and after the Closing Date, each of Acquiring
         Corporation  and the  Shareholders,  at any time and from  time to time
         shall make,  execute and  deliver,  or cause to be made,  executed  and
         delivered,  such instruments,  agreements,  consents and assurances and
         take or  cause  to be  taken  all such  actions  as may  reasonably  be
         requested  by any  party to  effect  the  purpose  and  intent  of this
         Agreement.

                                       30
<PAGE>

10.13    Interpretation.  The words "include,  "includes" and  "including"  when
         used  herein  shall be deemed in each case to be  followed by the words
         "without  limitation." The table of contents and headings  contained in
         this Agreement are for reference  purposes only and shall not affect in
         any way the meaning or interpretation of this Agreement.

10.14    Other  Remedies.  Except  as  otherwise  provided  herein,  any and all
         remedies  herein  expressly  conferred  upon a  party  will  be  deemed
         cumulative with and not exclusive of any other remedy conferred hereby,
         or by law or equity upon such party, and the exercise by a party of any
         one remedy will not preclude the exercise of any other remedy.

10.15    Rules of  Construction.  The parties  hereto  agree that they have been
         represented  by counsel  during the  negotiation  and execution of this
         Agreement and, therefore, waive the application of any law, regulation,
         holding  or rule  of  construction  providing  that  ambiguities  in an
         agreement  or  other  document  will be  construed  against  the  party
         drafting such agreement or document.

                                       31
<PAGE>

IN  WITNESS  WHEREOF,   Acquiring   Corporation,   Target  Corporation  and  the
Shareholders  have caused this  Agreement to be signed by their duly  authorized
respective officers, all as of the date first written above.

AMERICOM USA, INC., a Delaware Corporation

By   /s/ David Loomis
  ----------------------------------------------

Name:  David Loomis

Title:  President

RMC DIVERSIFIED ASSOCIATES INTERNATIONAL LTD., a California Corporation

By   /s/ Robert Cezar
  ----------------------------------------------

Name:  Robert Cezar

Title:  President

JIM AND JON TECH., a California Corporation

By   /s/ Jim Heintz
  ----------------------------------------------

Name:  Jim Heintz

Title:  President

/s/ Gary Hogue                                               /s/ Jim Heintz
---------------------------------------------                -------------------
Witness                                                      JIM HEINTZ

/s/ Gary Hogue                                               /s/ Jon Iverson
---------------------------------------------                -------------------
Witness                                                      JON IVERSON

                                       32

<PAGE>

                                Table of Contents

                                                                           Page
                                                                           ----
I.   ARTICLE I - THE MERGER...................................................1

         1.1    The Merger....................................................1

         1.2    Effective Time................................................2

         1.3    Effect of the Merger..........................................2

         1.4    Certificate of Incorporation Bylaws...........................2

         1.5    Directors and Officers........................................2

         1.6    Effect of Merger on the Capital Stock of Target
                Corporation...................................................2

         1.7    No Further Ownership Rights in Target Corporation
                Common Stock..................................................3

         1.8    Tax Treatment of the Merger...................................3

         1.9    Taking of Necessary Action; Further Action....................4

         1.10   Cash Consideration............................................4

II.      ARTICLE II - REPRESENTATIONS AND WARRANTIES OF TARGET CORPORATION
                      AND THE SHAREHOLDERS....................................4

         2.1    Organization...................................................4

         2.2    Capitalization.................................................4

         2.3    Ability to Carry Out Agreement.................................5

         2.4    Validity of Agreement - Authority..............................5

         2.5    Permits and Licenses...........................................5

         2.6    Compliance with Regulations....................................5

         2.7    Financial Statements...........................................5

         2.8    Title to and Condition of Certain Fixtures and Equipment.......6

         2.9    Tax Returns and Taxes..........................................6

         2.10   Labor Relations................................................6

         2.11   Status of Contracts............................................7

         2.12   Changes or Events..............................................7

         2.13   Employees and Employee Benefits................................7

         2.14   Real Property: Leaseholds......................................8

         2.15   Insurance......................................................8

         2.16   Litigation.....................................................8

         2.17   Related-Party Transactions.....................................8

         2.18   Accounts Receivable............................................8

         2.19   Relationship with Customers....................................8

         2.20   Proprietary Rights.............................................9

         2.21   Non-Infringement of Proprietary Rights.........................9

                                       i

<PAGE>

                               Table of Contents
                                  (continued)

                                                                           Page
                                                                           ----
         2.22   Environmental Requirements.....................................9

         2.23   Political Contributions and Other Payments....................10

         2.24   Occupational Safety and Health Act............................10

         2.25   Consents......................................................10

         2.26   Disclosure....................................................10

         2.27   Year 2000 Compliance..........................................11

         2.28   Investor Status...............................................11

III.     ARTICLE III - ADDITIONAL REPRESENTATIONS AND WARRANTIES
                       OF THE SHAREHOLDERS....................................11

         3.1    Title to the Shams............................................11

         3.2    Authority and Capacity........................................11

         3.3    Absence of Violation..........................................11

         3.4    Restrictions and Consents.....................................11

         3.5    Binding Obligation............................................12

         3.6    No Registration Under the Securities Act......................12

         3.7    Acquisition for Investment....................................12

         3.8    Evaluation of Merits and Risks of Investment..................13

         3.9    Forward Looking Information/Risk Factors......................13

         3.10   Transfer Limitations..........................................13

         3.11   Rule 144 Limitations..........................................14

IV.      ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF PARENT AND
                      ACQUIRING CORPORATION..................................15

         4.1    Organization and Qualification................................15

         4.2    Authority.....................................................15

         4.3    No Conflict; Required Filings and Consents....................15

         4.4    Brokers and Finders...........................................15

         4.5    Issuance of Parent Corporation Common Stock...................16

V.       ARTICLE V - CONDUCT PRIOR TO THE EFFECTIVE TIME......................16

         5.1    Affirmative Covenants of Target Corporation and the
                Shareholders..................................................16

         5.2    Negative Covenants of Target Corporation and the
                Shareholders..................................................16

VI.      ARTICLE VI - ADDITIONAL AGREEMENTS...................................19

         6.1    Sale of Shares................................................19

         6.2    Consents and Approvals; Filings and Notices...................19

                                       ii

<PAGE>

                               Table of Contents
                                  (continued)

                                                                           Page
                                                                           ----
         6.3    Access and Information........................................19

         6.4    Confidentiality...............................................19

         6.5    Expenses......................................................19

         6.6    Further Action; Reasonable Best Efforts.......................19

         6.7    Public Announcements..........................................20

         6.8    Solicitation..................................................20

         6.9    Notification of Certain Matters...............................20

         6.10   Blue Sky Laws.................................................20

         6.11   Shareholder Approval..........................................20

         6.12   Filing with California Secretary of State.....................21

         6.13   Tax Returns...................................................21

VII.     ARTICLE VII - CONDITIONS PRECEDENT TO ACQUIRING CORPORATION'S
                       OBLIGATIONS ON THE CLOSING DATE........................21

         7.1    Representations and Warranties................................21

         7.2    No Changes....................................................22

         7.3    Compliance with Obligations...................................22

         7.4    Consents......................................................22

         7.5    Title; Lien Search Report and Release(s) of Liens.............22

         7.6    Good Standing/Subsistence Certificate.........................22

         7.7    Satisfactory Investigation....................................23

         7.8    Resignations of Directors and Officers........................23

         7.9    Transfer Documents............................................23

         7.10   Agreements; Etc...............................................23

         7.11   Other Documents, Etc..........................................23

         7.12   Results of Due Diligence and Legal Analysis...................23

         7.13   Other Conditions..............................................23

         7.14   No Injunctions or Restraints; Illegality......................24

         7.15   Legal Opinions................................................24

VIII.    ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER.....................24

         8.1    Termination...................................................24

         8.2    Effect of Termination.........................................25

         8.3    Amendment.....................................................25

         8.4    Waiver........................................................25

                                      iii
<PAGE>

                               Table of Contents
                                  (continued)

                                                                           Page
                                                                           ----
IX.      ARTICLE IX - SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION;
                      REMEDIES...............................................26

         9.1    Survival of Representations..................................26

         9.2    Agreement of Shareholders to Indemnify.......................26

         9.3    Notice of Losses.............................................26

         9.4    Third Party Claims...........................................27

         9.5    No Recourse Against Target Corporation.......................27

         9.6    Binding Mediation/Arbitration................................28

X.       ARTICLE X - GENERAL PROVISIONS......................................28

         10.1   Notices......................................................28

         10.2   Remuneration.................................................29

         10.3   Remuneration.................................................29

         10.4   Headings.....................................................29

         10.5   Severability.................................................30

         10.6   Entire Agreement.............................................30

         10.7   Specific Performance.........................................30

         10.8   Assignment...................................................30

         10.9   Third Party Beneficiaries....................................30

         10.10  Governing Law................................................30

         10.11  Counterparts.................................................30

         10.12  Further Assurances...........................................30

         10.13  Interpretation...............................................31

         10.14  Other Remedies...............................................31

         10.15  Rules of Construction........................................31

                                       ivExhibit 10.7

                   Internet Services and Co-Location Agreement

Please read this Internet Services and Co-Location  Agreement (this "Agreement")
carefully before signing, since by signing this Agreement, you consent to all of
its  terms  and  conditions.  This  Agreement  is made by and  between  AboveNet
Communications, Inc. ("AboveNet") and Customer. This Agreement is effective upon
AboveNet's acceptance as indicated by its signature below on the date below (the
"Effective  Date").  This Agreement may be executed in two or more counterparts,
each of which  will be  deemed  an  original,  but all of which  together  shall
constitute one and the same instrument.

Customer Signature /s/ Jim Heintz                 Customer ID#_________________
                   ----------------------

(print name) Jim Heintz                           Contract No.  C______________
             ----------------------------

Title C T O                                       Effective Date___/____/_____
     ------------------------------------

Date  4/7/99                                      AboveNet Signature
    --------------------------------------

Company Name  DAI                                 (print name)_________________
              ----------------------------

Address  124 S. Halcyon
         ---------------------------------
          Arroyo Grande, CA  93420

Phone  (805) 542-6793
       -----------------------------------

Fax  (805) 473-4022
     -------------------------------------

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

Thank you for choosing AboveNet to provide your Internet  co-location  services.
As  used in  this  Agreement,  the  term  "you"  and  "Customer"  refers  to the
above-named  corporation,  partnership or other business entity that enters into
this  Agreement,  and "Service"  means the  transmission of data to and from the
Internet  through the network of routers,  switches and  communication  channels
owned and controlled by AboveNet  ("Network") together with co-location services
including 24x7  connectivity to the Internet and  Co-location  Space, as further
defined in this  Agreement  and in your Order for  AboveNet  Services  Form (the
"Order  Form").  The initial Order Form is attached to this Agreement as Exhibit
A.  AboveNet  and  Customer may enter into  subsequent  Order  Forms,  which may
supercede or complement  prior Order Forms. As used in this Agreement,  the term
"Customer  Equipment"  refers  to any  and  all  computer  equipment,  software,
networking  hardware  or  other  materials  placed  by or  for  Customer  in the
Co-location Space, other than AboveNet Equipment.
AboveNet will begin  installation,  initiation and Service after it receives and
accepts:  (1) your  Order  Form;  (2) a copy of this  Agreement  signed  by your
authorized  representative  and (3)  payment of amounts  due under  Section  1.1
below, detailed on your Order Form.
--------------------------------------------------------------------------------

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1.    Service Fees And Billing.  Customer  agrees to pay the Service  Activation
      Charges,  Monthly Service Fees, and other fees indicated on the Order Form
      (collectively, "Service Fees").

      1.1   Activation  Charges.  AboveNet  will bill  Customer  for all Service
            Activation  Charges  and  first  and last  month  Service  Fees (the
            "Activation  Charges") upon AboveNet's  acceptance of this Agreement
            and  the  Order  Form.  AboveNet  will  not  commence  installation,
            initiation  and  Service  unless  and until it either  has  received
            payment in full of all Activation Charges or has agreed, at its sole
            option, to extend credit to Customer.

      1.2   Recurring  Fees.  AboveNet will begin billing for recurring  Service
            Fees on the date that is the earlier of: (a) the  Installation  Date
            specified in the Order Form;  and (b) the date that Customer  places
            Customer Equipment in AboveNet's premises. If, however,  Customer is
            unable  to use the  Services  commencing  on the  Installation  Date
            solely  as  a  result  of  delays  caused  by  AboveNet,   then  the
            Installation  Date specified in the Order Form shall be extended one
            day for each day of delay caused by AboveNet.  On or about the first
            day of each month,  AboveNet will bill Customer for Network services
            provided during the previous month, and for co-location  services to
            be provided  in the current  month.  Recurring  Service  Fees do not
            include   monthly   telephone   company  charges  which  are  billed
            separately by the local telephone company(s).

      1.3   Payment.  All Fees and charges will be due, in U.S. dollars,  within
            twenty (20) days of the date of each AboveNet invoice. Late payments
            will accrue interest at a rate of one and one-half  percent (1 1/2%)
            per month, or the highest rate allowed by applicable law,  whichever
            is lower. If in its judgment AboveNet determines that Customer lacks
            financial resources,  AboveNet may, upon written notice to Customer,
            modify the payment terms to secure  Customer's  payment  obligations
            before providing Services.

      1.4   Taxes.  All payments  required by this  Agreement  are  exclusive of
            applicable taxes and shipping  charges.  Customer will be liable for
            and will pay in full all such  amounts,  other than  taxes  based on
            AboveNet' net income.

2.    Co-Location.

      2.1   Installation.  AboveNet  grants  you the right to  operate  Customer
            Equipment at the Co-location Space, as specified on your Order Form.
            The  Co-location  Space is provided on an "AS-IS"  basis and you may
            use the  Co-location  Space only for the purposes of maintaining and
            operating  Customer  Equipment as necessary to support  local access
            communications  facilities  and  links  to  AboveNet  and  to  third
            parties. Customer will install Customer Equipment in the Co-location
            Space after obtaining the appropriate authorization from AboveNet to
            access  AboveNet  premises.  Customer  will  remove  and  be  solely
            responsible for all packaging for Customer Equipment.

                                  Page 2 of 14

<PAGE>

      2.2   Access. You may access the Co-location Space only in accordance with
            the    AboveNet    Co-Location    Access    Policies    located   at
            HTTP://WWW.ABOVE.NET/HTML/SECURITY.HTML,  as  updated  from  time to
            time.  Customer may not provide or make available to any third party
            any  portion  of the  Co-location  Space  without  AboveNet's  prior
            written  consent,  which  consent  AboveNet may withhold in its sole
            discretion.

      2.3   Removal of Customer  Equipment.  Customer will provide AboveNet with
            written  notification  two (2) days before Customer wishes to remove
            any  Customer  Equipment.  Before  authorizing  the  removal  of any
            Customer  Equipment,  AboveNet's  accounting  department will verify
            that  Customer  has no  payments  due  to  AboveNet.  Once  AboveNet
            authorizes removal of Customer Equipment,  Customer will remove such
            Customer  Equipment,   and  will  be  solely  responsible  to  bring
            appropriate  packaging and moving materials.  Should Customer use an
            agent or other third party (for example,  but without limitation,  a
            common  carrier  such  as  U.P.S.)  to  remove  Customer  Equipment,
            Customer will be solely  responsible for the acts of such party, and
            any damages caused by such party to Customer Equipment or otherwise.
            At  Customer's  option,  AboveNet  will remove and package  Customer
            Equipment,  and place such Customer  Equipment in a designated  area
            for pick-up,  on the  condition  that Customer  either  provides all
            packaging  needed or pays  AboveNet to package  Customer  Equipment.
            Customer  may  thereafter   remove   Customer   Equipment  from  the
            designated  area,  or may  arrange  for a carrier to remove and ship
            such equipment with any necessary insurance to be paid by Customer.

3.    Security.  AboveNet does not guarantee security of Customer Equipment, the
      Co-Location  Space or of the Network.  AboveNet requires that you and your
      employees  comply with all Co-Location  Security  Procedures,  as modified
      from time to time,  in order to maximize  the  security of the Network and
      AboveNet premises.  AboveNet's current Co-Location Security Procedures are
      located at  http://www.above.net/html/security.html.  In  particular,  you
      must  establish a password with  AboveNet for purposes of  requesting  any
      support  services  with  respect to  Customer  Equipment  or your  Network
      connection,  either by telephone or email.  Information detailing password
      requirements    is    available    on    the    World    Wide    Web    at
      HTTP://WWW.ABOVE.NET/HTML/AUG.HTML.   Only   individuals   whom  you  have
      identified  as "Customer  Representatives"  in writing to AboveNet will be
      permitted  to enter the  Co-location  Space,  to request  Services on your
      behalf,  or to request  any  support  services  with  respect to  Customer
      Equipment  or your Network  connection,  either by telephone or email (for
      example,  but  without  limitation,  instructing  AboveNet  to  modify  or
      reconfigure its Services or to remove Customer Equipment). For good cause,
      AboveNet  may suspend the right of any  Customer  Representative  or other
      person  to visit the  AboveNet  premises  and/or  the  Co-location  Space.
      AboveNet   will   assist  in  Network   security   breach   detection   or
      identification,  but shall not be liable  for any  inability,  failure  or
      mistake in doing so.

4.    Local and Long Distance  Carriers.  AboveNet will provide  Customer with a
      list  of  approved  third  party  carriers  for  data  communications  and
      telecommunications.  Customer is  responsible  for  ordering all local and
      long-distance  lines from such third

                                  Page 3 of 14

<PAGE>

      party  carriers  and ordering any and all  necessary  cross-connects  from
      AboveNet.  AboveNet Service Fees for such  cross-connects are as indicated
      on the Order Form.  The carriers  will install such circuits in Customer's
      name.  Customer will be solely  responsible  for such circuits and for all
      payments due to the carriers.  Customer  will notify the carrier  directly
      when Customer wishes to terminate or modify such circuit.

5.    Domain  Information  and  Registration  Application.  If Customer  has not
      registered  the domain name that it wishes to use,  Customer  may complete
      the  applicable  sections of the Order Form to request  registration  or a
      change in domain name.

6.    Other  Networks;  Approval  and Usage.  Services  include  the  ability to
      transmit data beyond AboveNet's  Network,  through other networks,  public
      and private.  Use of or presence on other networks may require approval of
      the respective  network  authorities and will be subject to any acceptable
      usage  policies  such  networks  may  establish.  Customer  will  not hold
      AboveNet  responsible  for,  and  AboveNet  will not be liable  for,  such
      approval or for  violation of such  policies.  Customer  understands  that
      AboveNet  does not own or control other  networks  outside of its Network,
      and  AboveNet  is  not   responsible   or  liable  for   performance   (or
      non-performance)  within such  networks or within  interconnection  points
      between the Service and other networks that are operated by third parties.

7.    Resale.  Customer may resell the Service after receiving  AboveNet's prior
      written approval as to the nature and scope of such resale as set forth in
      Section  2.2.  Should  Customer  resell any  portion of the Service to any
      other party, Customer assumes all liabilities arising out of or related to
      such third party sites and  communications.  Customer agrees to enter into
      written  agreements  with any and all  parties  to which  it  resells  any
      portion of the Services with terms and  conditions at least as restrictive
      and as protective of AboveNet's rights as the terms and conditions of this
      Agreement,  including, without limitation, Sections 2.3, 3, 6, 8, 9.6-9.8,
      10, 11, 12, 14 and 16, and naming AboveNet as a third party beneficiary.

8.    Acceptable Use  Guidelines.  Customer must at all times conform its use of
      the Service to AboveNet's  Acceptable Use Guidelines and Anti-SPAM Policy,
      as AboveNet may update such  Guidelines  and Policy from time to time. The
      current  version of AboveNet's  Acceptable  Use Guidelines can be found at
      HTTP://WWW.ABOVE.NET/HTML/AUG.HTML. AboveNet's Anti-SPAM Policy is located
      at  HTTP://WWW.ABOVE.NET/HTML/ANTI-SPAM.HTML.  If  AboveNet is informed by
      government authorities or other parties of inappropriate or illegal use of
      AboveNet's  facilities (including but not limited to the Network) or other
      networks accessed through AboveNet,  or AboveNet  otherwise learns of such
      use or has reason to believe such use may be occurring, then Customer will
      cooperate  in  any  resulting  investigation  by  AboveNet  or  government
      authorities. Any government determinations will be binding on Customer. If
      Customer fails to cooperate with any such  investigation or determination,
      or fails to immediately  rectify any illegal use, AboveNet may immediately
      suspend Customer's Service. Further, upon notice to Customer, AboveNet may
      modify or suspend  Customer's  Service as necessary to comply with any law
      or regulation as reasonably determined by AboveNet. This includes,

                                  Page 4 of 14

<PAGE>

      without limitation,  any use contrary to the Digital Millennium  Copyright
      Act of 1998, 17 U.S.C. 512.

9.    Limited  Service Level  Warranty.  AboveNet  warrants that it will use its
      commercially  reasonable  efforts  to  minimize  Excess  Packet  Loss  and
      Latency,  and to  avoid  Downtime,  and that  AboveNet  will  provide  the
      following remedies to Customer:  (Excess Packet Loss, Latency and Downtime
      are defined below)

      9.1   Packet Loss and Latency.  AboveNet does not proactively  monitor the
            packet loss or transmission latency of specific customers.  AboveNet
            does,  however,  proactively  monitor the aggregate  packet loss and
            transmission  latency  within  its LAN and WAN.  In the  event  that
            AboveNet  discovers  (either  from its own  efforts  or after  being
            notified by Customer) that Customer is  experiencing  packet loss in
            excess of five percent (5%) ("Excess  Packet Loss") or  transmission
            latency  in  excess of 120  milliseconds  round-trip  time  based on
            AboveNet's  measurements  ("Latency") between any two routers within
            the continental  United States portion of the Network on average for
            each hour, and Customer  notifies AboveNet (or AboveNet has notified
            Customer),  then  AboveNet  will  use  its  commercially  reasonable
            actions to determine the source of the Excess Packet Loss or Latency
            and correct the problem.

      9.2   Remedy for Failure.  If either Excess Packet Loss or Latency  occurs
            and it  stems  from a source  within  the  Network  and not from the
            Customer or beyond the Network, and if AboveNet fails to correct the
            Excess  Packet  Loss  or  Latency   after  using  its   commercially
            reasonable  efforts for a period of twenty four (24) hours after the
            onset of such  Excess  Packet Loss or Latency,  then  AboveNet  will
            credit Customer's  account the pro-rata Bandwidth Fees (as set forth
            in the applicable  Order Form) for the  continuous  duration of such
            Excess  Packet Loss or Latency;  provided that all such credits will
            not exceed an aggregate  maximum  credit of Bandwidth Fees otherwise
            due from Customer for one (1) calendar month for failures in any one
            (1) calendar month.

      9.3   Inability to Access the Internet  (Downtime).  AboveNet will use its
            commercially  reasonable  efforts to avoid Downtime for 99.9% of the
            hours as an average  calculated over each calendar year. If Customer
            is unable to transmit  and receive  information  from the Network to
            other portions of the Internet  because  AboveNet  failed to provide
            Network  access  Services   ("Downtime")  for  more  than  four  (4)
            continuous hours,  then AboveNet will credit Customer's  account the
            pro-rata  Bandwidth Fees (as set forth in the applicable Order Form)
            for the  continuous  duration of such Excess Packet Loss or Latency;
            provided that all such credits will not exceed an aggregate  maximum
            credit of Bandwidth  Fees  otherwise  due from  Customer for one (1)
            calendar  month for  failures  in any one (1)  calendar  month.  For
            purposes of the  foregoing,  "unable to transmit and receive"  shall
            mean sustained packet loss in excess of fifty percent (50%) based on
            AboveNet' measurements.

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<PAGE>

      9.4   Year 2000.  AboveNet  hereby  incorporates  its Year 2000 Compliance
            Disclosure  found at  HTTP://WWW.ABOVE.NET/HTML/Y2K.HTML  into  this
            Agreement.  If Customer  experiences any Excess Packet Loss, Latency
            or Downtime due to AboveNet's  failure to be Year 2000 compliant (as
            defined in the Year 2000 Compliance Disclosure),  Customer will have
            the remedies set forth in this  Section 9, and the  limitations  set
            forth in this  Section 9,  Section  11 and the Year 2000  Compliance
            Disclosure.  The Year 2000  Compliance  Disclosure,  as incorporated
            into  this  Agreement,   is  provided  as  a  "Year  2000  Readiness
            Disclosure"  as defined in the Year 2000  Information  and Readiness
            Disclosure Act of 1998 (Public Law 105-271,  112 Stat. 2386) enacted
            on October 19, 1998.

      9.5   Customer Must Request  Credit.  Customer must notify AboveNet within
            three (3) business days from the time Customer  becomes  eligible to
            receive a credit  under  this  Section  9 to  receive  such  credit.
            Failure to comply  with this  requirement  will  forfeit  Customer's
            right to receive a credit.

      9.6   Limitation on Remedies.  If Customer is entitled to multiple credits
            under this Section 9, such credits shall not be cumulative  beyond a
            total of credits for one (1) calendar month of Bandwidth Fees in any
            one (1)  calendar  month in any  event.  AboveNet  will not  apply a
            credit under  Section 9.2 for any Excess  Packet Loss or Latency for
            which  Customer  received a credit under Section 9.3.  AboveNet will
            only  apply a credit to the month in which  the  incident  occurred.
            Further,  AboveNet  will not apply a credit  for any period in which
            Customer  received any bandwidth  Services free of charge.  Sections
            9.2 and 9.3 above state Customer's sole and exclusive remedy for any
            failure by AboveNet to provide  Services or adequate Service levels,
            including  but not  limited to any  outages  or Network  congestion.
            AboveNet's  blocking of data  communications in contravention of its
            Anti-SPAM Policy or Acceptable Use Guidelines shall not be deemed to
            be a failure of AboveNet to provide  adequate  Service  levels under
            this Agreement.

      9.7   No Other Warranty.  Except for the express  warranty set out in this
            Section 9 above,  the Services are provided on an "AS IS" basis, and
            Customer's use of the Services is at its own risk. AboveNet does not
            make,  and hereby  disclaims,  any and all other express and implied
            warranties,   including,   but  not   limited  to,   warranties   of
            merchantability,  fitness for a particular purpose, non-infringement
            and title,  and any  warranties  arising  from a course of  dealing,
            usage,  or  trade  practice.  AboveNet  does  not  warrant  that the
            Services will be uninterrupted, error-free, or completely secure.

      9.8   Disclaimer of Third Party Actions and Control. AboveNet does not and
            cannot  control  the flow of data to or from the  Network  and other
            portions  of the  Internet.  Such flow  depends in large part on the
            performance  of Internet  services  provided or  controlled by third
            parties.  At times,  actions  or  inactions  caused  by these  third
            parties  can  produce   situations  in  which  AboveNet   customers'
            connections to the Internet (or portions thereof) may be impaired or
            disrupted.   Although  AboveNet  will  use  commercially  reasonable
            efforts  to take  actions it

                                  Page 6 of 14

<PAGE>

            deems  appropriate to remedy and avoid such events,  AboveNet cannot
            guarantee that they will not occur. Accordingly,  AboveNet disclaims
            any and all liability resulting from or related to such events.

10.   Insurance.  Customer will keep in full force and effect during the term of
      this Agreement:  (i) business loss and interruption insurance in an amount
      not less than that necessary to compensate  Customer and its customers for
      complete  failure  of  Service;   (ii)  comprehensive   general  liability
      insurance  in an  amount  not  less  than  one  (1)  million  dollars  per
      occurrence  for  bodily  injury  and  property  damage;   (ii)  employer's
      liability insurance in an amount not less than one (1) million dollars per
      occurrence;  and (iii)  workers'  compensation  insurance in an amount not
      less than that  required by applicable  law.  Customer also agrees that it
      will be  solely  responsible  for  ensuring  that  its  agents  (including
      contractors and subcontractors) maintain other insurance at levels no less
      than those  required by applicable law and customary in Customer's and its
      agents' industries. Prior to installation of any Customer Equipment in the
      Co-location  Space or otherwise as AboveNet  may  request,  Customer  will
      furnish AboveNet with certificates of insurance which evidence the minimum
      levels of  insurance  set forth above.  Customer  agrees that prior to the
      installation  of  any  Customer  Equipment  at  AboveNet  premises  or the
      Co-location Space,  Customer will cause its insurance  provider(s) to name
      both AboveNet and the AboveNet landlord  indicated on the applicable Order
      Form as additional insured and notify AboveNet in writing of the effective
      date of such  coverage.  Customer  agrees that Customer and its agents and
      representatives  shall not  pursue  any claims  against  AboveNet  for any
      liability AboveNet may have under or relating to this Agreement unless and
      until Customer or Customer's employee,  as applicable,  first makes claims
      against Customer's  insurance  provider(s) and such insurance  provider(s)
      finally  resolve(s) such claims.  Any inability by Customer to furnish the
      proof the  insurance  required  under this Section 10 or failure to obtain
      such insurance  shall be a material  breach of this Section 10 and of this
      Agreement.

11.   Limitations of Liability.

      11.1  Personal Injury. Each Customer  Representative and any other persons
            visiting  AboveNet  facilities  does so at his or her own  risk  and
            AboveNet shall not be liable for any harm to such persons  resulting
            from any cause other than  AboveNet's  gross  negligence  or willful
            misconduct  resulting in personal injury to such persons during such
            a visit.

      11.2  Damage  to  Customer  Business.  Except  as  expressly  set forth in
            Section 9 including  the limited  remedy and other  limitations  set
            forth  under  Section  9, in no event  will  AboveNet  be  liable to
            Customer,  any Customer  Representative,  or any third party for any
            claims arising out of or related to Customer's business,  Customer's
            customers  or  clients,  Customer  Representative's   activities  at
            AboveNet  or  otherwise,  or for any  lost  revenue,  lost  profits,
            replacement   goods,   loss  of  technology,   rights  or  services,
            incidental,  punitive,  indirect or consequential  damages,

                                  Page 7 of 14

<PAGE>

            loss of data,  or  interruption  or loss of use of Service or of any
            Customer's  business,  even if  advised of the  possibility  of such
            damages,   whether  under  theory  of  contract,   tort   (including
            negligence), strict liability or otherwise.

      11.3  Damage to Customer Equipment.  AboveNet assumes no liability for any
            damage to, or loss of, any  Customer  Equipment  resulting  from any
            cause other than AboveNet's gross negligence or willful  misconduct.
            To the extent  AboveNet is liable for any damage to, or loss of, the
            Customer  Equipment for any reason,  such  liability will be limited
            solely  to the  then-current  value of the  Customer  Equipment  and
            further  subject to the  limitations  set forth in this Section 11.3
            and in Section  11.4 below.  In no event will  AboveNet be liable to
            Customer,  any Customer  Representative,  or any third party for any
            claims arising out of or related to Customer  Equipment for any lost
            revenue, lost profits, replacement goods, loss of technology, rights
            or  services,   incidental,   punitive,  indirect  or  consequential
            damages,  loss  of  data,  or  interruption  or  loss  of use of any
            Customer  Equipment,  even if  advised  of the  possibility  of such
            damages,   whether  under  theory  of  contract,   tort   (including
            negligence), strict liability or otherwise.

      11.4  Maximum Liability.  Notwithstanding anything to the contrary in this
            Agreement,   AboveNet's  maximum  aggregate  liability  to  Customer
            related to or in connection  with this  Agreement will be limited to
            the total  amount paid by Customer  to  AboveNet  hereunder  for the
            Twelve (12) month period prior to the event or events giving rise to
            such liability.

12.   Defense of third party claims and Indemnification.

      12.1  Defense.  Customer will defend  AboveNet,  its directors,  officers,
            employees,  affiliates  and  customers  (collectively,  the "Covered
            Entities")  from and against any and all claims,  actions or demands
            brought by or against  AboveNet  and/or any of the Covered  Entities
            alleging:   (a)  with  respect  to  the  Customer's  business:   (i)
            infringement  or  misappropriation  of  any  intellectual   property
            rights; (ii) defamation, libel, slander, obscenity,  pornography, or
            violation of the rights of privacy or publicity;  or (iii) spamming,
            or any other offensive, harassing or illegal conduct or violation of
            the Acceptable Use Guidelines or Anti-Spam Policy; (b) any damage or
            destruction  to  the  Co-location   Space,  the  Network,   AboveNet
            premises, AboveNet Equipment or to any other AboveNet customer which
            damage is caused by or  otherwise  results from acts or omissions by
            Customer,  Customer  Representative(s) or Customer's designees;  (c)
            any personal  injury or property  damage to any  Customer  employee,
            Customer  Representative  or other Customer  designee arising out of
            such individual's  activities  related to the Services,  unless such
            injury  or  property  damage is caused  solely by  AboveNet's  gross
            negligence or willful  misconduct;  or (d) any other damage  arising
            from the Customer  Equipment or Customer's  business  (collectively,
            the "Covered Claims").

      12.2  Indemnification.  Customer  hereby agrees to indemnify  AboveNet and
            each Covered  Entity from and against all damages,  costs,  and fees
            awarded  in  favor of  third  parties  in each  Covered  Claim,  and
            Customer will indemnify and hold

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            harmless  AboveNet and each Covered  Entity from and against any and
            all claims,  demands,  liabilities,  losses,  damages,  expenses and
            costs (including reasonable attorneys fees) (collectively, "Losses")
            suffered by AboveNet  and each Covered  Entity  which Losses  result
            from or arise out of a Covered Claim.

      12.3  Notification.  Customer will provide  AboveNet  with prompt  written
            notice of each Covered Claim of which Customer  becomes aware,  and,
            at AboveNet's sole option,  AboveNet may elect to participate in the
            defense and  settlement  of any Covered  Claim,  provided  that such
            participation  shall not relieve  Customer of any of its obligations
            under this Section 12.

13.   Reliance  on  Disclaimer,   Liability   Limitations  and   Indemnification
      Obligations.  Customer  acknowledges  that AboveNet has set its prices and
      entered  into  this  Agreement  in  reliance  upon  the   limitations  and
      exclusions of liability,  the  disclaimers  of warranties  and damages and
      Customer's indemnity  obligations set forth herein, and that the same form
      an essential basis of the bargain  between the parties.  The parties agree
      that the limitations and exclusions of liability and disclaimers specified
      in this  Agreement  will survive and apply even if this Agreement is found
      to have failed of their essential purpose.

14.   Confidential Information. Each party acknowledges that it will have access
      to certain  confidential  information  of the other party  concerning  the
      other  party's  business,  plans,  customers,  technology,  and  products,
      including  the  terms  and  conditions  of this  Agreement  ("Confidential
      Information").  Confidential  Information will include, but not be limited
      to, each party's proprietary software and customer information. Each party
      agrees that it will not use in any way, for its own account or the account
      of any third party, except as expressly  permitted by this Agreement,  nor
      disclose to any third party  (except as required by law or to that party's
      attorneys, accountants and other advisors as reasonably necessary), any of
      the  other  party's  Confidential  Information  and will  take  reasonable
      precautions   to  protect  the   confidentiality   of  such   information.
      Information will not be deemed Confidential  Information hereunder if such
      information: (i) is known to the receiving party prior to receipt from the
      disclosing  party  directly  or  indirectly  from a source  other than one
      having an obligation of  confidentiality  to the  disclosing  party;  (ii)
      becomes known (independently of disclosure by the disclosing party) to the
      receiving party directly or indirectly from a source other than one having
      an obligation of  confidentiality  to the disclosing party;  (iii) becomes
      publicly known or otherwise  ceases to be secret or  confidential,  except
      through  a  breach  of this  Agreement  by the  receiving  party;  (iv) is
      independently  developed by the receiving  party; or (v) is required to be
      released by law or regulation,  provided that the receiving  party provide
      prompt written notice to the disclosing  party of such impending  release,
      and the  releasing  party  cooperate  fully with the  disclosing  party to
      minimize such release.

15.   Term. This Agreement will be effective beginning on the Effective Date and
      ending at the end of the last "Term"  specified in any Order Form accepted
      by AboveNet, unless terminated as provided in Section 16 below. Use of any
      Service  after the Term  specified  on the Order  Form  under  which  such
      Service was provided will constitute  Customer's

                                  Page 9 of 14

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      acceptance of AboveNet's then current standard Agreement and the fee rates
      then in effect, but be terminable by AboveNet upon notice.

16.   Termination.

      16.1  Nonpayment.  After  fifteen  (15) days of  non-payment  from the due
            date, or such longer period as AboveNet's Billing Terms & Conditions
            may provide,  AboveNet may disable  Service.  To re-enable  Service,
            AboveNet will require a reconnection  fee. After thirty (30) days of
            nonpayment from the AboveNet invoice due date, or such longer period
            as AboveNet's  Billing Terms & Conditions may provide,  AboveNet may
            terminate  the  Service  permanently.  Termination  does not  remove
            Customer's   obligations   under  this   Agreement,   including  the
            obligation to pay all fees for Service until  termination or due for
            a committed, initial Term.

      16.2  Unacceptable Use; Bankruptcy.  AboveNet may terminate this Agreement
            upon written  notice to Customer for violation of the Acceptable Use
            Guidelines or Anti-Spam Policy or if Customer becomes the subject of
            a  voluntary  petition in  bankruptcy  or any  voluntary  proceeding
            relating to insolvency,  receivership,  liquidation,  or composition
            for  the  benefit  of   creditors  or  becomes  the  subject  of  an
            involuntary  petition in  bankruptcy or any  involuntary  proceeding
            relating to insolvency,  receivership,  liquidation,  or composition
            for the benefit of creditors,  if such petition or proceeding is not
            dismissed within sixty (60) days of filing.

      16.3  For Cause.  Either party may terminate  this  Agreement if the other
            party  materially  breaches any term or condition of this  Agreement
            and fails to cure such breach  within thirty (30) days after receipt
            of written notice of the same,  except in the case of failure to pay
            fees which  failure is subject to Section  16.1 above or for failure
            to comply with  AboveNet's  Acceptable  Use  Guidelines or Anti-SPAM
            Policy as set forth in Section 16.2.

      16.4  No Liability  for  Termination.  Neither party will be liable to the
            other  for  any  termination  or  expiration  of this  Agreement  in
            accordance with its terms.  However,  expiration or termination will
            not extinguish claims or liability  (including,  without limitation,
            for payments due) arising prior to such expiration or termination.

      16.5  Effect of  Termination.  Upon the  effective  date of  expiration or
            termination of this Agreement:  (a) AboveNet will immediately  cease
            providing  the  Services;  (b) any and all  payment  obligations  of
            Customer under this Agreement will become due immediately, including
            but not limited to  Recurring  Service  Fees  through the end of the
            term  indicated on the Order Form adjusted for the net present value
            of the prospective payments;  (c) within thirty (30) days after such
            expiration or termination,  each party will return all  Confidential
            Information  of the  other  party in its  possession  at the time of
            expiration or termination  and will not make or retain any copies of
            such Confidential  Information except as required to comply with any
            applicable legal or accounting record keeping  requirement;  and (d)
            Customer will remove from AboveNet's premises all Customer

                                  Page 10 of 14

<PAGE>

            Equipment and any of its other property on AboveNet  premises within
            ten  (10)  days of  AboveNet's  request  (and  only  after  Customer
            receives authorization from AboveNet as provided in Section 2.3) and
            return the Co-location Space to AboveNet in the same condition as it
            was prior to  Customer's  installation.  If Customer does not remove
            such property (or cannot  remove such  property  because of payments
            due to AboveNet) within such ten (10) day period,  then AboveNet may
            move any and all such  property to storage and charge  Customer  for
            the cost of such  removal  and  storage,  without  being  liable for
            related  damages.  If  Customer  does  not  pay all  amounts  due to
            AboveNet and remove such property from AboveNet  premises or storage
            within  thirty  (30) days of such  AboveNet  request,  AboveNet  may
            liquidate  the  property in any  reasonable  manner,  without  being
            liable for related damages.

      16.6  Survival.  The following  provisions  will survive any expiration or
            termination  of the  Agreement:  Sections  1.3,  1.4,  2 (until  all
            Customer Equipment is removed from the Co-location  Space), 3, 4, 6,
            8, 9.5-9.8, 10-13, 14 (for a period of three (3) years),  16.4-16.6,
            and 17.

17.   Miscellaneous Provisions.

      17.1  Force Majeure. Except for the obligation to pay money, neither party
            will be liable  for any  failure or delay in its  performance  under
            this  Agreement,  or for credits  under  Section 9, due to any cause
            beyond its reasonable  control,  including acts of war, acts of God,
            earthquake,  flood,  embargo,  riot,  sabotage,  labor  shortage  or
            dispute,  governmental act or failure of the Internet, provided that
            the delayed  party:  (a) gives the other party prompt notice of such
            cause,  and (b) uses its  reasonable  commercial  efforts to correct
            promptly such failure or delay in performance.

      17.2  No Lease. This Agreement is a services agreement and is not intended
            to and will not constitute a lease of any real or personal property.
            In particular,  Customer  acknowledges  and agrees that Customer has
            not been granted any real property interest in the Co-location Space
            or other AboveNet  premises,  and Customer has no rights as a tenant
            or  otherwise  under  any real  property  or  landlord/tenant  laws,
            regulations, or ordinances.

      17.3  Marketing.  Customer  agrees that  AboveNet may refer to Customer by
            trade  name  and  trademark,  and may  briefly  describe  Customer's
            Business in AboveNet's  marketing  materials and web site.  Customer
            hereby grants  AboveNet a limited  license to use any Customer trade
            names and trademarks solely in connection with the rights granted to
            AboveNet pursuant to this Section 17.3. All goodwill associated with
            Customer's  trade name and trademarks will inure solely to Customer.
            Customer may display the slogan "Powered by AboveNet"  together with
            the AboveNet logo, or any other  AboveNet  trademark or service mark
            or logo, on Customer's web sites or marketing  literature only after
            obtaining  AboveNet's written approval on a case-by-case  basis, and
            provided that Customer  abide by the AboveNet  trademark  guidelines
            and such other  guidelines  as

                                  Page 11 of 14

<PAGE>

            AboveNet  may  provide  Customer.   All  goodwill   associated  with
            AboveNet's  trade  name,  trademarks,  slogans  and logos will inure
            solely to AboveNet.

      17.4  Government  Regulations.   Customer  will  not  export,   re-export,
            transfer,  or make available,  whether  directly or indirectly,  any
            regulated  item  or  information  to  anyone   outside-the  U.S.  in
            connection  with this  Agreement  without first  complying  with all
            export control laws and regulations which may be imposed by the U.S.
            Government and any country or  organization  of nations within whose
            jurisdiction Customer operates or does business.

      17.5  Assignment.  Neither  party may assign its  rights or  delegate  its
            duties under this  Agreement  either in whole or in part without the
            prior  written  consent of the other  party,  except to a party that
            acquires  substantially  all of the  assigning  party's  assets or a
            majority of its stock as part of a corporate  merger or acquisition.
            Any attempted  assignment or delegation without such consent will be
            void.  This  Agreement  will bind and inure to the  benefit  of each
            party's successors and permitted assigns.

      17.6  Notices.  Any notice or  communication  required or  permitted to be
            given  hereunder  may be  delivered  personally,  deposited  with an
            overnight  courier,  sent  by  confirmed  facsimile,  or  mailed  by
            registered or certified  mail,  return  receipt  requested,  postage
            prepaid,  in each case to the address of the  receiving  party first
            indicated  above,  or at such  other  address  as  either  party may
            provide to the other by written  notice.  Such notice will be deemed
            to have been given as of the date it is delivered,  or five (5) days
            after mailed or sent, whichever is earlier.

      17.7  Relationship  of Parties.  AboveNet  and  Customer  are  independent
            contractors  and this Agreement will not establish any  relationship
            of  partnership,  joint  venture,  employment,  franchise  or agency
            between  AboveNet and Customer.  Neither  AboveNet nor Customer will
            have the power to bind the other or incur obligations on the other's
            behalf  without  the  other's  prior  written  consent,   except  as
            otherwise expressly provided herein.

      17.8  Choice of Law and  Arbitration.  This  Agreement will be governed by
            and  construed  in  accordance   with  the  laws  of  the  State  of
            California,  excluding its conflict of laws  principles.  Each party
            agrees to submit any and all disputes concerning this Agreement,  if
            not resolved between the parties,  to binding  arbitration under one
            (1) neutral, independent and impartial arbitrator in accordance with
            the  Commercial  Rules  of  the  American  Arbitration   Association
            ("AAA");  provided,  however, the arbitrator may not vary, modify or
            disregard any of the provisions  contained in this Section 17.8. The
            decision  and any award  resulting  from such  arbitration  shall be
            final and binding.  The place of  arbitration  will be at AboveNet's
            offices.  The arbitrator is not empowered to award damages in excess
            of compensatory damages and each party hereby irrevocably waives any
            right to recover such  damages with respect to any dispute  resolved
            by  arbitration.  Both parties  shall  equally share the fees of the
            arbitrator.  The language of arbitration will be English;  provided,
            however  that an  interpreter  may be provided

                                  Page 12 of 14

<PAGE>

            for any  witness  that  requires an  interpreter.  The costs of such
            interpretation   will  be  borne  by  the   party   requesting   the
            interpreter. Any final decision or award from arbitration under this
            Section 17.8 will be in writing and  reasoned.  The  arbitrator  may
            award  attorney's fees to the prevailing  party as determined by the
            arbitrator  with wide  discretion  considering  both (i) which party
            bettered its position  most by the outcome of the  Arbitration,  and
            (ii) that the parties  intended  that all  limitations  on liability
            would be enforced by the  arbitrator.  Except for attorney's fees as
            the arbitrator may award as provided in the previous sentence,  each
            will  bear  their own costs and  expenses  that are  reasonable  and
            necessary for  participating in arbitration under this Section 17.8.
            As part of any  arbitration  conducted under this Section 17.8, each
            party may:  (i)  request  from the other party  documents  and other
            materials  relevant  to the dispute and likely to bear on the issues
            in such dispute, (ii) conduct no more than five (5) oral depositions
            each of  which  will be  limited  to a  maximum  of  seven  hours in
            testimony, and (iii) propound to the other party no more than thirty
            (30) written interrogatories,  answers to which the other party will
            give under oath. All the dispute resolution proceedings contemplated
            in  this  Section  17.8  will  be as  confidential  and  private  as
            permitted  by law.  The parties  will not  disclose  the  existence,
            content or results of any  proceedings  conducted in accordance with
            this Section 17.8, and materials  submitted in connection  with such
            proceedings will not be admissible in any other proceeding, provided
            however,  that this  confidentiality  provision  will not  prevent a
            petition to vacate or enforce an  arbitration  award,  and shall not
            bar disclosures required by law. The parties agree that any decision
            or award resulting from  proceedings in accordance with this Section
            17.8 shall have no preclusive  effect in any other matter  involving
            third parties.  All  applicable  statutes of limitation and defenses
            based upon the passage of time will be tolled  while the  procedures
            specified in this  Section  17.8 are pending.  The parties will take
            such  action,  if any,  required to  effectuate  such  tolling.  The
            arbitration  shall be governed by the United States  Arbitration Act
            and  judgement  upon the award  rendered  by the  arbitrator  may be
            entered by any court having jurisdiction.

      17.9  Changes Prior to Execution. Customer represents and warrants that it
            made no changes to this Agreement  prior to providing this Agreement
            to AboveNet for its  acceptance  and  execution,  and that  AboveNet
            alone  incorporated  any and all  changes  negotiated  between,  and
            accepted by,  Customer and AboveNet  into this  Agreement or into an
            addendum executed by both parties.

      17.10 Entire Agreement.  This Agreement,  together with the Order Form and
            AboveNet  policies  referred  to in this  Agreement  represents  the
            complete  agreement and understanding of the parties with respect to
            the subject  matter herein,  and  supersedes any other  agreement or
            understanding,  written or oral. This Agreement may be modified only
            through a written  instrument  signed by both parties.  Both parties
            represent  and  warrant  that  they have  full  corporate  power and
            authority to execute and deliver this Agreement and to perform their
            obligations under this Agreement and that the person whose signature
            appears  above is duly  authorized  to enter into this  Agreement on
            behalf of the respective  party.  Should any terms of this Agreement
            be declared  void or  unenforceable  by any  arbitrator

                                  Page 13 of 14

<PAGE>

            or court of  competent  jurisdiction,  such terms will be amended to
            achieve  as  nearly  as  possible  the same  economic  effect as the
            original  terms and the remainder of this  Agreement  will remain in
            full force and  effect.  If a  conflict  arises  between  Customer's
            purchase order terms and this  Agreement,  this Agreement shall take
            precedence.  In the case of international,  federal,  state or local
            government  orders,  Customer's  purchase  order  must  contain  the
            following language:  "Notwithstanding any provisions to the contrary
            on the face of this  purchase  order,  attachments  to this purchase
            order, or on the reverse side of this purchase order,  this purchase
            order  is being  used for  administrative  purposes  only,  and this
            purchase  order is placed under and subject  solely to the terms and
            conditions  of  the  AboveNet  Network  Agreement  executed  between
            Customer and AboveNet."

End of AboveNet Internet Services Agreement

                                  Page 14 of 14

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