Document:

REGISTRATION RIGHTS AGREEMENT

     THIS REGISTRATION  RIGHTS AGREEMENT (this  "Agreement") is made and entered
into as of May 1, 2000,  among  Cedar  Avenue LLC (the  "Purchaser"),  a limited
liability  Company  organized  under  the laws of the  Cayman  Islands,  THOMSON
KERNAGHAN  &  CO.  LIMITED  (the  "Placement   Agent,"),   an  Ontario  (Canada)
corporation,  and  WAVETECH  INTERNATIONAL,   INC.  (the  "Company"),  a  Nevada
corporation.

     This  Agreement  is  made  with  reference  to  the  following   facts  and
circumstances:

     A. The  Purchaser  and the Company have entered into a Securities  Purchase
Agreement dated May 1, 2000 (the "Securities  Purchase  Agreement).  Capitalized
terms used but not defined in this Agreement shall have the meanings ascribed to
them in the  Securities  Purchase  Agreement.  The term "Holder"  shall mean the
Company,  the Transfer Agent,  any assignee or transferee of a Warrant,  and any
other owner of Registrable Securities.

     B. It is a condition to the consummation of the  transactions  contemplated
by the  Securities  Purchase  Agreement  that the parties hereto enter into this
Agreement.

     NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I

                     REGISTRATION OF REGISTRABLE SECURITIES

     Section 1.01.  REGISTRABLE  SECURITIES.  As used in this Agreement the term
"Registrable  Securities"  means the Conversion  Shares and the Warrant  Shares;
PROVIDED,  HOWEVER,  that with respect to any particular  Registrable  Security,
such security  shall cease to be a Registrable  Security when, as of the date of
determination,  (i) it has been effectively  registered under the Securities Act
of 1933,  as amended (the  "Securities  Act") and disposed of pursuant  thereto,
(ii)  registration  under  the  Securities  Act is no  longer  required  for the
immediate public  distribution of such security as a result of the provisions of
Rule 144(k)  promulgated  under the Securities Act, or (iii) it has ceased to be
outstanding.  In  the  event  of  any  merger,  reorganization,   consolidation,
recapitalization  or other change in corporate  structure  affecting  the Common
Stock,  the term  "Registrable  Securities"  shall also  include any  securities
issued or issuable in exchange for the Conversion Shares or the Warrant Shares.

     Section 1.02. REGISTRATION RIGHTS.

     (a) The Company  shall,  at its at the sole expense  (except as provided in
Section  1.02(c)  hereof),  prepare and file with the  Securities  and  Exchange
Commission ("the SEC"),  within forty-five (45) days after the Subscription Date
(the "Registration  Deadline"),  a registration  statement on Form S-3 under the
Securities Act (the "Registration  Statement"),  providing for a public offering
to be made on a continuous  basis pursuant to Rule 415 under the Securities Act,
relating to the offer and sale of all Registrable Securities.  The Company shall
use its best efforts to cause the Registration  Statement to become effective as
soon as practical  after its filing and in any event  within one hundred  twenty
(120)  days  from the  Subscription  Date or  within  five (5)  days  after  the
Company's  receipt of a "no review" letter from the SEC (whichever occurs first,
the "Effectiveness  Deadline").  The number of shares of Common Stock designated
in the  Registration  Statement  to be  registered  shall be two hundred  (200%)

                                      -1-
<PAGE>
percent of the number of shares that would be  required  if all the  Registrable
Securities  were  issued  on the  day  before  the  filing  of the  Registration
Statement.

     (b) The  Company  shall  use its  best  efforts  to keep  the  Registration
Statement  continuously  effective,  and shall file in a timely  manner all post
effective  amendments and supplements thereto, in order to permit the prospectus
forming part thereof to be useable by the Holders  until the earliest of (i) the
date that all of the  Registrable  Securities  have been  sold  pursuant  to the
Registration Statement,  (ii) the date the Holders receive an opinion of counsel
that all of the  Registrable  Securities may be sold under the provisions of SEC
Rule 144(k), or (iii) five and one half years after the Subscription Date.

     (c)  The  Company  shall  pay all  fees,  disbursements  and  out-of-pocket
expenses and costs incurred by it in connection with the preparation, filing and
maintaining the current status of the Registration  Statement under this Article
I, and in complying with  applicable  securities  and Blue Sky laws  (including,
without limitation,  all reasonable attorneys' fees). Each Holder shall bear the
cost of underwriting discounts, if any, applicable to the Registrable Securities
being  registered  and the fees and expenses of its counsel.  The Company  shall
qualify any of the securities for sale in such states as the Holders  reasonably
designate.  However,  the Company  shall not be required to qualify in any state
that will require an escrow or other restriction  relating to the Company or the
sellers.  The Company at its expense  will supply the Holders with copies of the
Registration  Statement and  prospectus or offering  circular  included tin this
Agreement,  all exhibits,  amendments and supplements thereto, and other related
documents in such quantities the Holders may reasonably request.

     (d) As used in this Agreement,  the term  "Registration  Default Day" shall
mean:  (i) If the  Company  has not  filed  the  Registration  Statement  by the
Registration  Deadline,  then each day  thereafter  until the Company  files the
Registration  Statement;  (ii)  if the SEC has  not  declared  the  Registration
Statement  effective by the  Effectiveness  Deadline,  then each day  thereafter
until the SEC declares the Registration Statement effective; and (iii) each day,
from the effective date of the  Registration  Statement  until the date that the
Company is no longer required to keep the Registration Statement effective, that
the Registration  Statement is not effective and current.  For each Registration
Default Day, the Company shall pay each Holder, on demand, an amount equal to 2%
per month of the product of the number of  Registrable  Securities  then held by
such Holder multiplied by the price paid or payable to the Company for each such
Registrable  Security.  The Company shall pay Liquidated Damages to each Holder,
at the Company's option, either (i) in cash, or (ii) in Registrable  Securities,
the number of which shall be determined by multiplying  the amount of Liquidated
Damages  by the Bid Price on the date of the  Company's  election  to be paid in
Registrable  Securities.  If the  Company  elects to pay  Liquidated  Damages in
Registrable  Securities,  then it shall promptly file an amendment  (including a
post-effective  amendment,  to the extent the SEC rules permit, if necessary) to
the  Registration   Statement   registering  the  resale  of  those  Registrable
Securities.  The  parties  hereto  agree  that it  would  be  difficult,  if not
impossible  to  accurately  fix the amount of damages that  Holders  would incur
because of the occurrence of Registration  Default Days, and that the Liquidated
Damages  are a fair,  reasonable  and  equitable  under the  circumstances.  The
payment of Liquidated Damages shall not relieve the Company from its obligations
to register the Registrable  Securities pursuant to this Section. The provisions
of  this  paragraph  shall  not  prevent  any  Holder  from  obtaining  specific
performance of the Company's obligations under Section 1.02.

     Section  1.03.  INCIDENTAL  REGISTRATION.  If,  at any time  following  the
Effective Time, The Company proposes to file a Registration Statement other than

                                      -2-
<PAGE>
the  Shelf  Registration  Statement  (an  "Incidental  Registration")  under the
Securities  Act with  respect  to an  offering  of Common  Stock (i) for its own
account (other than a  Registration  Statement on Form S-4 or S-8 (or any filing
on any  substitute  form that may be adopted by the Commission for a transaction
for which Form S-4 or S-8 is  currently  available))  or (ii) the account of any
holder of Common Stock,  the Company shall give written  notice of such proposed
filing  (including  the  proposed  date  thereof)  to the  Holders  as  soon  as
practicable,  but in any  event  not less than 10 days  before  the  anticipated
filing date and such notice shall offer each Holder the  opportunity to register
such number of  Registrable  Securities as such Holder shall  request.  Upon the
written  direction of any such Holder (which  direction shall specify the number
of  Registrable  Securities  intended to be disposed  of by any  Holder),  given
within 10 days following the receipt by the Holders of any such written  notice,
The Company  shall use its  reasonable  best  efforts to cause to be  registered
under the Securities Act all of the Registrable Securities that each such Holder
has  requested to be  registered;  PROVIDED,  that, if The Company does not file
such registration statement by the proposed filing date, the Company shall again
comply  with the notice  provisions  of this  Section  1.03 prior to filing such
registration statement.  Notwithstanding  anything contained herein, if the lead
underwriter  of an offering  involving an Incidental  Registration  notifies The
Company that the inclusion of such  Registrable  Securities would (i) materially
and adversely  affect the price of the Common Stock to be offered or (ii) result
in a  greater  amount  of Common  Stock  being  offered  than the  market  could
reasonably absorb, then the number of Registrable Securities to be registered by
Holders  shall  be  reduced  to  the  extent  that,  in the  lead  underwriter's
reasonable  judgment,  neither of the effects in the  foregoing  clauses (i) and
(ii) would  result  from the  number of shares of Common  Stock  proposed  to be
issued by The Company.  Any  reduction  in the amount of a Holder's  Registrable
Securities to be included in an Incidental  Registration  shall be made on a pro
rata basis  with other  holders of  registration  rights  participating  in such
Incidental Registration.

     Section  1.04.   UNDERWRITING   REQUIREMENTS.   In   connection   with  any
underwritten  offering,  the Company shall not be required under Section 1.02 of
this Agreement to include shares of Registrable  Securities in such underwritten
offering unless the holder of such shares of Registrable  Securities accepts the
terms of the underwriting of such offering that have been reasonably agreed upon
between the Company and the underwriters selected by the Company.

     Section  1.05.  REGISTRATION  PROCEDURES.  If and  whenever  the Company is
required by any of the provisions of this  Agreement to effect the  registration
of any of the Registrable Securities under the Securities Act, the Company shall
(except as otherwise provided in this Agreement), as expeditiously as possible:

     (a) prepare and file with the SEC such  amendments  and  supplements to the
Registration Statement and the prospectus used in connection therewith as may be
necessary to keep such registration  statement  effective and to comply with the
provisions of the Securities  Act with respect to the sale or other  disposition
of all securities covered by such registration  statement whenever the Holder of
such securities shall desire to sell or otherwise dispose of the same (including
prospectus supplements with respect to the sales of securities from time to time
in connection  with a registration  statement  pursuant to Rule 415  promulgated
under the Securities Act);

     (b) furnish to each Holder such  numbers of copies of a summary  prospectus
or other  prospectus,  including a  preliminary  prospectus  or any amendment or
supplement  to any  prospectus,  in  conformity  with  the  requirements  of the
Securities Act, and such other documents,  as such Holder may reasonably request
in order to facilitate  the public sale or other  disposition  of the securities
owned by such Holder;

                                      -3-
<PAGE>
     (c) use its best effort to register and qualify the  securities  covered by
the Registration  Statement under such other securities or blue sky laws of such
jurisdictions as the Holder shall reasonably  request,  and do any and all other
acts and things  which may be  necessary  or  advisable to enable each Holder to
consummate  the public sale or other  disposition  in such  jurisdiction  of the
securities owned by such Holder,  except that the Company shall not for any such
purpose be required to qualify to do  business as a foreign  corporation  in any
jurisdiction  win  this  Agreement  it is not so  qualified  or to file tin this
Agreement any general consent to service of process;

     (d) use its best efforts to list such securities on the Principal Market;

     (e) enter into and perform its obligations under an underwriting agreement,
if the offering is an underwritten  offering,  in usual and customary form, with
the managing underwriter or underwriters of such underwritten offering;

     (f)  notify  each  Holder  at  any  time  when  a  prospectus  relating  to
Registrable  Securities covered by the Registration  Statement is required to be
delivered  under the Securities  Act, of the occurrence of any event of which it
has knowledge as a result of which the prospectus  included in the  Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a  material  fact  required  to be stated tin this  Agreement  or
necessary to make the  statements tin this Agreement not misleading in the light
of the circumstances then existing.

     Section  1.06.   INFORMATION  BY  HOLDER.   Each  Holder  included  in  any
registration  shall  furnished to the Company such  information  regarding  such
Holder and the  distribution  proposed by such Holder as the Company may request
in  writing  and as shall  be  required  in  connection  with any  registration,
qualification or compliance referred to in this Agreement.

     Section 1.07.  TRANSFER OF REGISTRATION  RIGHTS. Any holder of a Warrant or
Registrable   Securities  may  transfer  its  rights  under  this  Agreement  in
connection with any transfer of such Warrant or Registrable  Securities effected
in compliance with applicable law.

     Section 1.08. PUBLIC  INFORMATION.  The Company covenants to make available
"adequate current public information"  concerning the Company within the meaning
of  Rule  144(c)  under  the  Securities  Act so long as any  Holder  holds  any
Registrable Securities.

                                   ARTICLE II

                                 INDEMNIFICATION

     Section 2.01. INDEMNIFICATION; CONTRIBUTION.

     (a) INDEMNIFICATION BY THE COMPANY. The Company shall, and it hereby agrees
to,  indemnify  and hold  harmless  each Holder,  such  Holder's  directors  and
officers,  each person, if any, who controls, is subject to control of or who is
in common  control  with such  Holder  (an  "Affiliate"),  and each  person  who
participates  as a  placement  or sales agent or as an  underwriter  (within the
meaning  of  the  Securities  Act)  in  any  offering  or  sale  of  Registrable
Securities,  against any losses,  claims,  damages or liabilities  ("Losses") to
which such Holder,  Affiliate,  agent or  underwriter  may become  subject under
Securities  Act or otherwise,  insofar as such Losses (or actions or proceedings
in  respect  thereof)  arise out of or are based  upon an  untrue  statement  or
alleged  untrue  statement  of a material  fact  contained  in any  registration
statement or prospectus  contained therein or arise out of or are based upon any
omission or alleged  omission to state  therein a material  fact  required to be

                                      -4-
<PAGE>
stated therein or necessary to make the statements  therein not misleading,  and
the Company  shall,  and it hereby agrees to,  reimburse such Holder or any such
Affiliate,  agent or underwriter for any legal or other  out-of-pocket  expenses
reasonably  incurred by them (but not in excess of expenses  incurred in respect
of one counsel for all of them  unless  there is an actual  conflict of interest
between any indemnified parties, which indemnified parties may be represented by
separate counsel) in connection with investigating or defending any such action,
proceeding or claim;  PROVIDED,  HOWEVER, that the indemnity agreement contained
in this Section  2.01(a)  shall not apply to amounts paid in  settlement  of any
such Loss or action if such  settlement  is effected  without the consent of the
Company which consent shall not be  unreasonably  withheld;  PROVIDED,  FURTHER,
that the Company  shall not be liable to any such person in any such case to the
extent  that any such Loss or  expense  arises out of or is based upon an untrue
statement or alleged  untrue  statement or omission or alleged  omission made in
such registration  statement or prospectus  contained therein,  in reliance upon
and in  conformity  with  written  information  furnished to the Company by such
Holder or any Affiliate,  agent,  underwriter or  representative  of such Holder
expressly for use therein,  or by such Holder's  failure to furnish the Company,
upon request,  with the information  with respect to such Holder,  such Holder's
directors and officers,  or any agent,  underwriter  or  representative  of such
Holder, or such Holder's intended method of distribution, that is the subject of
the untrue  statement or omission or if the Company  shall sustain the burden of
proving that such Holder, such Holder's directors and officers, or such agent or
underwriter  sold securities to the person alleging such Loss without sending or
giving,  at or prior to the  written  confirmation  of such sale,  a copy of the
applicable  prospectus  (excluding  any  documents   incorporated  by  reference
therein)  or of the  applicable  prospectus,  as then  amended  or  supplemented
(excluding any documents  incorporated by reference  therein) if the Company had
previously furnished copies thereof to such Holder or such agent or underwriter,
and such prospectus  corrected such untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement.

     (b) INDEMNIFICATION BY HOLDERS. Each Holder participating in a registration
pursuant to this Agreement  shall  severally and not jointly  indemnify and hold
harmless the Company,  each of its directors and officers,  each person, if any,
who  controls  the Company  within the meaning of the  Securities  Act, and each
agent and any  underwriter for the Company (within the meaning of the Securities
Act)  against  any Losses,  joint or  several,  to which the Company or any such
director, officer,  controlling person, agent or underwriter may become subject,
under the Securities Act or otherwise, insofar as such Losses (or proceedings in
respect  thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such  registration  statement
on the effective date thereof  (including  any  prospectus  filed under Rule 424
under the Securities Act or any amendments or supplements  thereto) or arise out
of or are  based  upon the  omission  or  alleged  omission  to state  therein a
material fact required to be stated  therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such  untrue  statement  or alleged  untrue  statement  or  omission  or alleged
omission was made in such registration statement or prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with written information
furnished by or on behalf of such Holder  expressly for use in  connection  with
such  registration  statement  or  prospectus,  or by such  Holder's  failure to
furnish the Company,  upon request,  with the  information  with respect to such
Holder,  such  Holder's  directors and officers,  or any agent,  underwriter  or
representative of such Holder, or such Holder's intended method of distribution,
that is the subject of the untrue  statement or omission;  and such Holder shall
reimburse any legal or other expenses  reasonably incurred by the Company or any
such director,  officer,  controlling  person,  agent or underwriter (but not in
excess of  expenses  incurred  in respect of one  counsel for all of them unless
there is an actual conflict of interest between any indemnified  parties,  which
indemnified  parties may be represented by separate  counsel) in connection with

                                      -5-
<PAGE>
investigating or defending any such Loss or action; PROVIDED,  HOWEVER, that the
indemnity agreement contained in this Section 2.01(b) shall not apply to amounts
paid in  settlement  of any such Loss or action if such  settlement  is effected
without  the  consent  of the Holder  which  consent  shall not be  unreasonably
withheld.

     (c) NOTICE OF CLAIMS.  Promptly after receipt by an indemnified party under
subsection (a) or (b) above of written notice of the  commencement of any action
or  proceeding  for which  indemnification  under  subsection  (a) or (b) may be
requested,  such indemnified  party shall,  without regard to whether a claim in
respect  thereof is to be made  against an  indemnifying  party  pursuant to the
indemnification  provisions of, or as contemplated by, this Section 2.01, notify
such  indemnifying  party in  writing  of the  commencement  of such  action  or
proceeding;  but the  omission  so to notify the  indemnifying  party  shall not
relieve  it from any  liability  which it may have to any  indemnified  party in
respect  of  such  action  or  proceeding  on  account  of  the  indemnification
provisions  of or  contemplated  by Section  2.01(a) or Section  2.01(b)  hereof
unless the indemnifying  party was materially  prejudiced by such failure of the
indemnified  party to give such  notice,  and in no event  shall  such  omission
relieve  the  indemnifying  party from any other  liability  it may have to such
indemnified  party.  In case any such  action  or  proceeding  shall be  brought
against any indemnified  party and it shall notify an indemnifying  party of the
commencement  thereof,  such indemnifying party shall be entitled to participate
therein  and,  to the extent  that it shall  determine,  jointly  with any other
indemnifying  party  similarly  notified,  to assume the defense  thereof,  with
counsel  reasonably  satisfactory to such indemnified  party,  and, after notice
from the  indemnifying  party to such  indemnified  party of its  election so to
assume the defense thereof,  such indemnifying party shall not be liable to such
indemnified party for any legal or any other expenses  subsequently  incurred by
such  indemnified  party,  in  connection  with the defense  thereof  other than
reasonable  costs of  investigation  (unless such  indemnified  party reasonably
objects to such  assumption on the grounds that there may be defenses  available
to it which are different from or in addition to the defenses  available to such
indemnifying party, in which event the indemnified party shall have the right to
control its defense and shall be  reimbursed by the  indemnifying  party for the
expenses  incurred  in  connection  with  retaining  separate  counsel).  If the
indemnifying party is not entitled to, or elects not to, assume the defense of a
claim,  it will not be  obligated  to pay the fees and expenses of more than one
counsel (in addition to local counsel) for each  indemnified  party with respect
to such claim. The  indemnifying  party will not be subject to any liability for
any settlement made without its consent, which consent shall not be unreasonably
withheld or delayed. No indemnifying party will consent to entry of any judgment
or  enter  into  any  settlement   agreement   which  does  not  include  as  an
unconditional  term  thereof  the giving by the  claimant or  plaintiff  to such
indemnified  party of a release  from all  liability in respect of such claim or
litigation.

     (d) CONTRIBUTION.  Each Holder participating in a registration  pursuant to
this   Agreement   and  the  Company   agree  that  if,  for  any  reason,   the
indemnification  provisions  contemplated  by Section 2.01(a) or Section 2.01(b)
hereof are  unavailable to or are  insufficient  to hold harmless an indemnified
party in respect of any Losses (or actions or  proceedings  in respect  thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses (or actions
or  proceedings  in respect  thereof) in such  proportion as is  appropriate  to
reflect the relative fault of, and benefits derived by, the  indemnifying  party
and  the   indemnified   party,   as  well  as  any  other  relevant   equitable
considerations.  The relative fault of such  indemnifying  party and indemnified
party shall be  determined  by  reference  to, among other  things,  whether the
untrue or alleged  untrue  statement  of a material  fact or omission or alleged
omission  to state a material  fact  relates  to  information  supplied  by such
indemnifying  party or by such  indemnified  party,  and the  parties'  relative
intent,  knowledge,  access to information and opportunity to correct or prevent
such  statement or omission.  The parties hereto agree that it would not be just

                                      -6-
<PAGE>
and equitable if  contribution  pursuant to this Section 2.01(d) were determined
(i)  by pro  rata  allocation  (even  if  the  Holder  or  any  agents  for,  or
underwriters of, the Registrable Securities, or all of them, were treated as one
entity for such purpose);  or (ii) by any other method of allocation  which does
not take  account of the  equitable  considerations  referred to in this Section
2.01(d).  The amount paid or payable by an indemnified  party as a result of the
Losses (or actions or proceedings in respect thereof) referred to above shall be
deemed to include  (subject  to the  limitations  set forth in  Section  2.01(c)
hereof)  any  legal  or  other  fees or  expenses  reasonably  incurred  by such
indemnified party in connection with investigating or defending any such action,
proceeding or claim.  No person guilty of fraudulent  misrepresentation  (within
the  meaning of  Section  11(f) of the  Securities  Act)  shall be  entitled  to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.

     (e) BENEFICIARIES OF INDEMNIFICATION.  The obligations of the Company under
this Section 2.01 shall be in addition to any  liability  that it may  otherwise
have and shall  extend,  upon the same terms and  conditions,  to each  officer,
director,  partner  and  member  of  each  Holder  requesting  or  joining  in a
registration  pursuant to this  Agreement and each agent and  underwriter of the
Registrable  Securities and each person, if any, who controls such Holder or any
such agent or  underwriter  within the meaning of the  Securities  Act;  and the
obligations of such Holder and any agents or  underwriters  contemplated by this
Section  2.01 shall be in  addition  to any  liability  that such  Holder or its
respective  agent or underwriter  may otherwise have and shall extend,  upon the
same  terms  and  conditions,  to  each  officer  and  director  of the  Company
(including  any  person  who,  with his  consent,  is named in any  Registration
Statement as about to become a director of the  Company) and to each person,  if
any, who controls the Company within the meaning of the Securities Act.

                                   ARTICLE III

                               GENERAL PROVISIONS

     Section 3.01. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or by commercial
delivery  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 THE COMPANY:
              Wavetech International Inc.
              5210 East Williams Circle, Suite 200
              Tucson, Arizona 85711
              Attention: Gerald I. Quinn, President
              Facsimile No. (520) 750-9194

            WITH A COPY THAT DOES NOT CONSTITUTE NOTICE TO:
              Squire, Sanders & Dempsey L.L.P.
              40 North Central, Suite 2700
              Phoenix, Arizona 85004
              Attention: Gregory R. Hall
              Facsimile No. (602) 253-8129

                                      -7-
<PAGE>
     (b)  IF TO THE INVESTOR:
              Cedar Avenue LLC
              Corporate Center
              Windward One, West Bay Road
              PO Box 31106 SMB
              Grand Cayman, Cayman Islands
              Attention:  David Sims
              Facsimile No. (284) 494-4771

            WITH A COPY THAT DOES NOT CONSTITUTE NOTICE TO:
              John M. Mann
              Attorney at Law
              1330 Post Oak Boulevard, Suite 2800
              Houston, Texas 77056-3060
              Facsimile No. (713) 622-7185

     (c)  IF TO THE PLACEMENT AGENT:
              Thomson Kernaghan & Col Limited
              365 Bay Street, Tenth Floor
              Toronto, Ontario M5H 2V2, Canada
              Attention: Ms. Michelle McKinnon
              Facsimile No. (416) 367-8055

            WITH A COPY THAT DOES NOT CONSTITUTE NOTICE TO:
              John M. Mann
              Attorney at Law
              1330 Post Oak Boulevard, Suite 2800
              Houston, Texas 77056-3060
              Facsimile No. (713) 622-7185

     Section  3.02,  AMENDMENT.  This  Agreement  may not be amended or modified
except (a) by an instrument  in writing  signed by, or on behalf of, the parties
hereto or (b) by a waiver in accordance with Section 3.05 of this Agreement.

     Section 3.03.  WAIVER.  Any party to this Agreement may as to it (a) extend
the time for the performance of any obligations or other acts of any other party
hereto or (b) waive  compliance  with any  agreements  or  conditions  contained
herein.  Any such  extension  or waiver  shall be valid  only if set forth in an
instrument in writing signed by the party to be bound thereby. Any waiver of any
term or condition shall not be construed as a waiver of any subsequent breach or
a subsequent  waiver of the same term or condition,  or as a waiver of any other
term or condition, of this Agreement.  The failure of any party to assert any of
its rights hereunder shall not constitute a waiver of any of such rights.

     Section   3.04.   SURVIVAL.    The   several    indemnities,    agreements,
representations, warranties and each other provision set forth in this Agreement
and made pursuant hereto shall remain in full force and effect regardless of any
investigation  (or statement as to the results  thereof) made by or on behalf of
any party,  any director or officer of such party, or any controlling  person of
any  of the  foregoing,  and  shall  survive  the  transfer  of any  Registrable
Securities  by  the  Stockholder,   and  the  indemnification  and  contribution
provisions  set forth in Section 2.01 hereof shall survive  termination  of this
Agreement. Section 3.05. COUNTERPARTS.  This Agreement may be executed in one or
more  counterparts,  all of which shall be considered one and the same agreement
and shall become  effective  when one or more  counterparts  have been signed by
each of the parties and delivered to the other party,  it being  understood that
all parties need not sign the same counterpart.

                                      -8-
<PAGE>
     Section 3.06. ENTIRE AGREEMENT;  ASSIGNMENT.  This Agreement, the schedules
and  Exhibits  hereto,  together  with  the  other  Transaction  Documents:  (a)
constitute  the entire  agreement  among the parties with respect to the subject
matter  hereof and  supersede  all prior  agreements  and  understandings,  both
written and oral,  among the parties with respect to the subject  matter hereof;
and (b)  shall  not be  assigned  by  operation  of law or  otherwise  except as
otherwise specifically provided.

     Section  3.07.  SEVERABILITY.  In the  event  that  any  provision  of this
Agreement  or the  application  thereof,  becomes or is  declared  by a court of
competent  jurisdiction to be illegal,  void or unenforceable,  the remainder of
this Agreement will continue 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. The parties further agree to negotiate
in good faith to replace such void or unenforceable  provision of this Agreement
with a  valid  and  enforceable  provision  that  will  achieve,  to the  extent
possible,   the  economic,   business  and  other   purposes  of  such  void  or
unenforceable provision.

     Section 3.08.  CHOICE OF LAW; VENUE;  JURISDICTION.  This Agreement and the
other  Transaction  Documents shall be construed and enforced in accordance with
the laws of the State of  Arizona,  except  for (i)  matters  arising  under the
federal  securities  laws,  which shall be construed  and enforced in accordance
with those laws,  (ii) matters  relating to the  Company's  organization,  which
shall be governed by the laws of the  jurisdictions  of its  incorporation,  and
(iii) if any provision of this  Agreement or any other  Transaction  Document is
unenforceable  under Arizona law but is enforceable  under the laws of the State
of New York, then New York law shall govern the  construction and enforcement of
that  provision.  Any  controversy  or claim  arising out of or relating to this
Agreement or any other  Transaction  Document  (whether in contract or tort,  or
both, or at law or in equity) shall be determined by binding  arbitration in the
Borough  of  Manhattan,  City of New York,  in  accordance  with the  Commercial
Arbitration Rules (the "Rules") of the American Bar Association,  before a panel
of three arbitrators, one appointed by each of the Investor and the Company, and
the third chosen by the two so appointed.  If the two arbitrators  chosen by the
parties cannot agree on a third,  then the third shall be selected in accordance
with the Rules.  The prevailing  party in any  arbitration  proceeding  shall be
awarded reasonable  attorneys fees and costs of the proceeding.  The arbitration
award  shall be final,  and may be  entered  in any court  having  jurisdiction.
Nothing in this paragraph  shall preclude  either party from applying to a court
for temporary  equitable relief,  when appropriate,  pending and subject to such
temporary  orders and permanent award as the arbitrator or arbitrators may make.
The parties  hereby consent to the exclusive  jurisdiction  of the United States
District Court for the Southern District of New York for that purpose.

     Section  3.08.  SPECIFIC   PERFORMANCE.   The  parties  hereto  agree  that
irreparable  damage would occur in the event that any of the  provisions of this
Agreement  were not performed in accordance  with their  specific  terms or were
otherwise breached.  It is accordingly agreed that the parties shall be entitled
to an injunction or  injunctions  to prevent  breaches of this  Agreement and to
enforce  specifically the terms and provisions hereof in any court of the United
States or any state  having  jurisdiction,  this being in  addition to any other
remedy to which they are entitled at law or in equity.

                                      -9-
<PAGE>
     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed  as of the  date  first  written  above by  their  respective  officers
thereunto duly authorized or in their individual capacities, as applicable.

WAVETECH INTERNATIONAL, INC.

By /s/ Gerald I. Quinn
  ---------------------------------
  Gerald I. Quinn, President

Date Signed  May 1, 2000
           ------------------------

CEDAR AVENUE LLC
By Navigator Management Ltd., Director

By /s/ David Sims
  ---------------------------------
  David Sims, Director

Date Signed  April 28, 2000
           ------------------------

THOMSON KERNAGHAN & CO. LIMITED

By /s/ Michelle McKinnon
  ---------------------------------
  Michelle McKinnon

Date Signed  May 11, 2000
           ------------------------

                                      -10-SECURITIES PURCHASE AGREEMENT
                                     BETWEEN
                                CEDAR AVENUE LLC
                                       And
                          Wavetech International, Inc.
                             Dated as of May 1, 2000

     This  SECURITIES  PURCHASE  AGREEMENT,   dated  as  of  May  1,  2000  (the
"Agreement"),   is  made  and  entered  into  between   CEDAR  AVENUE  LLC  (the
"Investor"),  a limited  liability company organized and existing under the laws
of the Cayman Islands, and WAVETECH INTERNATIONAL, INC., a corporation organized
and existing under the laws of the State of Nevada (the "Company").

     This  Agreement  is  made  with  reference  to  the  following   facts  and
circumstances:

     A. The Company  proposes that, upon the terms and subject to the conditions
contained  herein,  the Company  shall sell to the Investor  1,000 shares of the
Company's Series B Convertible  Preferred Stock (the "Preferred Shares") for the
aggregate purchase price of $5,000,000.

     B. The  Company  proposes  to issue to the  Investor a warrant to  purchase
160,000 shares of Common Stock (the "Investor's Warrant").

     C. The Company  proposes to issue to Thomson  Kernaghan & Co.  Limited (the
"Placement  Agent"),  for services  rendered,  a Warrant to purchase $350,000 of
Common Stock (the "Placement Agent's Warrant").

     D. The proposed investments will be made in reliance upon the provisions of
Section 4(2) of the United States Securities Act of 1933, as amended, Regulation
D promulgated  by the Securities and Exchange  Commission  thereunder,  and upon
such other exemption from the registration requirements of the Securities Act as
may be available  with respect to any or all of the  investments in Common Stock
to be made hereunder.

     NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS

     Section  1.1 "BID PRICE"  shall mean the closing bid price (as  reported by
Bloomberg L.P.) of the Common Stock on the Principal Market.

     Section  1.2.  "BUSINESS  DAY" shall  mean a day other  than a Saturday  or
Sunday that national banks in Phoenix, Arizona are open for business..

     Section  1.3   "CERTIFICATE  OF  DESIGNATION"   shall  mean  the  Company's
certificate  of  designation  of the  rights  and  preferences  of the  Series B
Convertible Preferred Stock, substantially in the form set forth in Exhibit A to
this Agreement.

     Section 1.4  "CLOSING"  shall mean the closing of the sale of the Preferred
Shares and the Warrants.

     Section 1.5 "CLOSING DATE" shall mean May 1, 2000, or such other day as the
Investor and the Company shall agree in writing to the Closing Day.

                                       1
<PAGE>
     Section 1.6 "COMMON STOCK" shall mean the Company's common stock, par value
$.001 per share.

     Section 1.7 "CONVERSION  SHARES" shall mean the shares of Common Stock into
which the Preferred Shares are convertible.

     Section 1.8 "DAMAGES" shall mean any loss, claim, damage, liability,  costs
and expenses  (including,  without  limitation,  reasonable  attorney's fees and
disbursements and costs and expenses of expert witnesses and investigation).

     Section  1.9  "DISCLOSURE  SCHEDULE"  shall  mean the  disclosure  schedule
attached as Exhibit B to this Agreement.

     Section 1.10 "EFFECTIVE DATE" shall mean the date on which the SEC declares
the Registration Statement to be effective.

     Section  1.11  "ESCROW  AGENT"  shall  mean  John M.  Mann,  Esq.,  or such
successor  escrow agent as the Investor and the Company may appoint  pursuant to
the Escrow Agreement.

     Section 1.12 "ESCROW  AGREEMENT" shall me the Escrow Agreement  between the
Investor and the Company in the form of Exhibit F to this Agreement.

     Section 1.13 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.

     Section 1.14  "EXERCISE  PRICE" shall mean the purchase  price per share of
Common Stock for which a Warrant may be exercised.

     Section 1.15 "LEGEND" shall mean the legend specified in Section 8.1.

     Section 1.16 "MARKET PRICE" on any given date shall mean the average of the
three lowest  closing Bid Prices (as  reported by Bloomberg  L.P.) of the Common
Stock preceding that date.

     Section  1.17  "MATERIAL  ADVERSE  EFFECT"  shall  mean any  effect  on the
business,  operations,  properties,  prospects  or  financial  condition  of the
Company  that is  material  and  adverse to the Company  ,its  subsidiaries  and
affiliates,  taken as a whole,  or that would  prohibit or materially  interfere
with the ability of the Company to enter into and perform any of its obligations
under the Transaction Documents.

     Section  1.18 "NASD"  shall mean the  National  Association  of  Securities
Dealers, Inc.

     Section  1.19  "OUTSTANDING"  when used with  reference to shares of Common
Stock or other equity securities (collectively the "Shares"), shall mean, at any
date as of which the number of such Shares is to be  determined,  all issued and
outstanding  Shares,  and shall  include all such Shares  issuable in respect of
outstanding scrip or any certificates  representing fractional interests in such
Shares;  PROVIDED,  HOWEVER,  that "Outstanding"  shall not mean any such Shares
then directly or indirectly owned or held by or for the account of the Company.

     Section  1.20  "PERSON"  shall  mean  an  individual,   a  corporation,   a
partnership, an association, a trust or other entity or organization,  including
a government or political subdivision, agency or instrumentality thereof.

                                       2
<PAGE>
     Section  1.21  "PREFERRED  SHARES"  shall  mean the  Series  B  Convertible
Preferred Stock,  $0.001 par value, of the Company,  which shall have the rights
and preferences set forth in the Certificate of Designation.

     Section 1.22 "PREFERRED SHARES  INVESTMENT  AMOUNT" shall mean Five Million
($5,000,000) Dollars.

     Section 1.23  "PRINCIPAL  MARKET"  shall mean the OTC Bulletin  Board,  the
Nasdaq Small Cap Market, the Nasdaq National Market, the American Stock Exchange
or the New York Stock Exchange,  whichever is at the time the principal  trading
exchange or market for the Common Stock.

     Section 1.24  "PURCHASE  PRICE" shall mean,  with respect to the  Preferred
Shares,  an amount equal to the  "Liquidation  Value" of each share set forth in
the Certificate of Designation attached hereto as Exhibit A.

     Section 1.25 "REGISTRABLE SECURITIES" shall mean the Conversion Shares, the
Warrant Shares, and additional shares of Common Stock issued pursuant to Section
2.3, (i) in respect of which the  Registration  Statement  has not been declared
effective by the SEC,  (ii) which have not been sold under  circumstances  under
which all of the  applicable  conditions  of Rule 144 (or any similar  provision
then in force) under the  Securities  Act ("Rule 144") are met, (iii) which have
not been  otherwise  transferred  to holders who may trade such  shares  without
restriction under the Securities Act as evidenced by unrestricted and unlegended
evidence of ownership,  or (iv) the sales of which, in the opinion of counsel to
the Company,  are not eligible for sale  pursuant to Rule 144(k) (or any similar
provision then in effect) under the Securities Act.

     Section  1.26  "REGISTRATION  RIGHTS  AGREEMENT"  shall mean the  agreement
regarding  the  filing  of the  Registration  Statement  for the  resale  of the
Registrable Securities, entered into between the Company and the Investor on the
Subscription Date annexed hereto as Exhibit E.

     Section 1.27 "REGISTRATION  STATEMENT" shall mean a registration  statement
on Form S-3 (if use of such form is then  available  to the Company  pursuant to
the rules of the SEC and, if not, on such other form  promulgated by the SEC for
which the Company then  qualifies  and which  counsel for the Company shall deem
appropriate, and which form shall be available for the resale of the Registrable
Securities to be registered thereunder in accordance with the provisions of this
Agreement, the Registration Rights Agreement, and the Warrants and in accordance
with  the  intended  method  of  distribution  of  such  securities),   for  the
registration of the resale by the Investor of the Registrable  Securities  under
the Securities Act.

     Section 1.28 "REGULATION D" means Regulation D of the SEC promulgated under
the Securities Act.

     Section 1.29 "SEC" shall mean the U.S. Securities and Exchange Commission.

     Section 1.30 "SEC FILINGS"  shall mean the Form's  10-KSB,  Form's  10-QSB,
Form's 8-K, Proxy Statements,  and any other statements,  reports and materials,
as supplemented to the date hereof, filed by the Company with the SEC during the
twelve (12) months  immediately  preceding the date hereof,  and hereafter until
such time the Company no longer has an obligation to maintain the  effectiveness
of a Registration Statement as set forth in the Registration Rights Agreement.

     Section 1.31 "SECTION 4(2)" shall mean Section 4(2) of the Securities Act.

                                       3
<PAGE>
     Section 1.32 "SECURITIES  ACT" shall mean the United States  Securities Act
of 1933, as amended, and the regulations of the SEC promulgated thereunder.

     Section  1.33  "SUBSCRIPTION  DATE"  shall  mean  the  date on  which  this
Agreement is executed and delivered by the parties hereto.

     Section  1.34  "TRADING  DAY" shall mean any day during  which the New York
Stock Exchange shall be open for business.

     Section 1.35 "TRANSFER  AGENT" shall mean the Company's  Transfer Agent for
the Common Stock.

     Section 1.36 "TRANSFER AGENT INSTRUCTIONS" shall me the Instructions to the
Transfer Agent in the form of Exhibit G to this Agreement.

     Section  1.37  "TRANSACTIONS  DOCUMENTS"  shall  mean this  Agreement,  the
Certificate of Designation, the Warrants, the Registration Rights Agreement, the
Escrow   Agreement,   the  Notices  of   Conversion,   and  the  Transfer  Agent
Instructions.

     Section 1.38  "WARRANT"  shall mean each of the Investor's  Warrant,  which
shall be  substantially  in the form of  Exhibit  C, and the  Placement  Agent's
Warrant,  which shall be  substantially in the form of Exhibit D; and "WARRANTS"
shall mean both of such warrants, collectively.

     Section 1.39  "WARRANT  SHARES" shall mean shares of Common Stock issued or
issuable pursuant to exercise of the Warrants.

                                   ARTICLE II

                         PURCHASE AND SALE OF SECURITIES

     Section 2.1 PREFERRED SHARES PURCHASE.

     (a) On the  Subscription  Date, the Company agrees to sell and the Investor
agrees to purchase $5,000,000 in aggregate principal amount of Preferred Shares,
at a price per share equal to the Initial  Stated Value thereof set forth in the
Certificate of  Designation.  The number of shares of Common Stock issuable upon
conversion of the Preferred Shares shall be determined by dividing $5,000,000 by
the conversion formula contained in the Certificate of Designation.

     (b) CONVERSION.  The Investor may,  subject to the limitations set forth in
paragraphs (a) and (b) of Article 11 of the Certificate of Designation,  convert
the Preferred  Shares to Conversion  Shares at any time in whole or from time to
time  in  part  at any  time  prior  to  their  redemption.  Provided  that  the
Registration  Statement  shall then be in effect for the sale of the  Conversion
Shares,  if the  Preferred  Shares have not been  redeemed or converted  two (2)
years from the date of issuance,  the Preferred  Shares shall  automatically  be
converted as if the Investor  voluntarily  elected such conversion in accordance
with the  procedure,  terms  and  conditions  set forth in this  Agreement.  The
Preferred  Shares shall be convertible  into  Conversion  Shares at a conversion
price per share equal to the lesser of (x) one hundred ten percent (110%) of the
average  of the Bid Price for the  Common  Stock for the five (5)  Trading  Days
prior to the Closing  Date,  or (y) eighty  percent  (80%) of the average of the
closing bid prices for the Common  Stock for the three (3) lowest  Trading  Days
out  of  the  ten  (10)  consecutive  Trading  Days  immediately  preceding  the
Conversion Date (as defined in paragraph 2.1(d).

                                       4
<PAGE>
     (c) GATING.  As used in this  paragraph,  the "Gating  Date" shall mean the
earlier  of (i) the  Effective  Date,  and  (ii) the  120th  day  following  the
Subscription   Date.  The  Purchaser  agrees  not  to  sell,   pursuant  to  the
Registration Statement,  (i) more than one-third of the Conversion Shares during
the 30-day period  beginning on the Gating Date, and (ii) more than one-third of
the  Conversion  Shares  during the 31st through 61th days  following the Gating
Date.  Thereafter,  there  shall be no  limitation  on the amount of  Conversion
Shares that the Investor may sell pursuant to the Registration Statement.

     (d) CONVERSION PROCEDURE. The Company shall permit the Investor to exercise
its right to convert  the  Preferred  Shares by sending  an  executed  Notice of
Conversion to the Company by facsimile transmission, and delivering the original
Notice of Conversion and the certificate  representing  the Preferred  Shares to
the  Company  by  express  courier.  Each  Business  Day on  which a  Notice  of
Conversion is sent by facsimile  transmission  to the Company in accordance with
the provisions hereof shall be deemed a conversion date (the "Conversion Date").
The Company shall deliver the certificates  representing  shares of Common Stock
issuable upon conversion of any Preferred Shares (together with the certificates
representing  the Preferred Shares not so converted) to the Investor via express
courier, by electronic transfer or otherwise within five Business Days after the
conversion  date if the Company has received the original  Notice of  Conversion
and Preferred Shares certificate being so converted by such date. In addition to
any other remedies  which may be available to the  Investors,  in the event that
the  Company  fails for any reason to effect  delivery  of such shares of Common
Stock within such five Business Day period,  the  Investors  will be entitled to
revoke the relevant  Notice of  Conversion by delivering a notice to such effect
to the Company whereupon the Company and the Investors shall each be restored to
their  respective  positions  immediately  prior to  delivery  of such Notice of
Conversion.  The Notice of Conversion  and  Preferred  Shares  representing  the
portion of the shares converted shall be delivered to the Company at its address
to its facsimile number set forth in Article XI.

     (e)  LIQUIDATED  DAMAGES.  In the event that the Common Stock issuable upon
conversion  of the Preferred  Shares is not  delivered  within five (5) Business
Days of receipt by the Company of a valid  Conversion  Notice and the  Preferred
Shares to be converted,  the Company shall pay to the Investor, on demand and in
immediately available funds, as liquidated damages for such failure and not as a
penalty, for each $100,000 of Preferred Shares sought to be converted,  $500 for
each of the  first  ten  (10)  days  and  $1,000  per day  thereafter  that  the
Conversion Shares are not delivered, which liquidated damages shall run from the
sixth (6th) Business Day after the Conversion Date up until the time that either
the Notice of Conversion is revoked or the Common Stock has been  delivered,  at
which time liquidated damages shall cease.

     (f)  REDEMPTION.  The Company  shall have the right to redeem the Preferred
Shares on any  Business  Day before  their  conversion  by giving  the  Investor
written notice of its election to do so (the "Redemption Notice") specifying the
date on which the Company shall redeem the shares (the Redemption  Date), and by
depositing the Redemption Price (as hereafter defined) with the Escrow Agent not
later than three Business Days before the Redemption  Date. The Redemption  Date
shall  not be later  than the  fifth  Business  Day  after the date on which the
Company  gives the  Redemption  Notice.  The  Investor  may not send a Notice of
Conversion  after  receipt of  Redemption  Notice,  unless the Company  does not
redeem the Preferred  Shares on the Redemption Date. On or before the Redemption
Date,  the Investor  shall  deliver any  Preferred  Shares that it elects not to
convert to the  Escrow  Agent,  against  payment of the  Redemption  Price.  The
Redemption  Price shall be 125% of the Purchase  Price of the Preferred  Shares,
plus any accrued and unpaid dividends  thereon.  If the Company does not deposit
the  Redemption  Price with the Escrow Agent within the time  proscribed by this
paragraph,  the  Redemption  Notice  shall be  voidable  at the  election of the
Investor.

     (g) LIMITATION ON INVESTOR'S RIGHT TO CONVERT.  Any provision  contained in
the  Certificate  of  Designation  or the  Investor's  Warrant  to the  contrary
notwithstanding,  the  Investor  shall  have the  right  and  power  to  convert

                                       5
<PAGE>
Preferred Shares so long as after giving effect to such conversion, the Investor
shall  not be  deemed  to be the  beneficial  owner  of more  than  9.99% of the
outstanding  Common  Stock,  calculated  in  accordance  with  Section  13(d) of
Exchange Act.

     Section 2.2 THE WARRANTS.

     (a) THE INVESTOR'S  WARRANT.  On the  Subscription  Date, the Company shall
issue the  Investor's  Warrant  to the  Investor,  substantially  in the form of
Exhibit C, with  appropriate  insertions,  to purchase 160,000 Warrant Shares at
the aggregate  Exercise Price of $.01 for all 160,000 shares,  exercisable in at
any  time in  whole  or from  time to time in part  over  the  five-year  period
beginning on the Subscription Date. The Investor's Warrant shall be delivered by
the Company to the Escrow Agent,  and delivered to the Investor  pursuant to the
terms of this Agreement and the Escrow Agreement.  The Warrant Shares covered by
the  Investor's   Warrant  shall  be  registered  for  resale  pursuant  to  the
Registration Rights Agreement.

     (b) THE PLACEMENT  AGENT'S WARRANT.  On the Subscription  Date, the Company
shall issue the Placement Agent's Warrant to the Placement Agent,  substantially
in the form of Exhibit D, with appropriate insertions, to purchase the number of
Warrant  Shares  (rounded to the nearest  whole  number)  determined by dividing
$350,000 by the Exercise Price.  The Exercise Price shall be 110% of the average
Bid Price for the five (5) Trading Days  preceding the  Subscription  Date.  The
Placement Agent's Warrant shall be exercisable at any time in whole or from time
to time in part over the five year period  beginning on the  Subscription  Date.
The  Placement  Agent's  Warrant shall be delivered by the Company to the Escrow
Agent,  and  delivered  to the  Placement  Agent  pursuant  to the Terms of this
Agreement and the Escrow Agreement.  The Warrant Shares covered by the Placement
Agent's  Warrant shall be  registered  for resale  pursuant to the  Registration
Rights Agreement.

                                   ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF INVESTOR

     The Investor represents and warrants to the Company that:

     Section 3.1 ORGANIZATION AND  AUTHORIZATION.  Investor is duly incorporated
or  organized  and  validly  existing  in the  country of its  incorporation  or
organization, and has all requisite power and authority to purchase and hold the
securities  issuable  hereunder.  The decision to invest and the  execution  and
delivery of the  Transaction  Documents  to be  executed  and  delivered  by the
Investor,  the  performance  by  the  Investor  of  its  obligations  under  the
Transaction  Documents and the  consummation by the Investor of the transactions
contemplated  hereby have been duly authorized and require no other  proceedings
on the part of the Investor.  The undersigned executing this Agreement on behalf
of the Investor has all right,  power and  authority to execute and deliver this
Agreement on behalf of the Investor.  Each of this Agreement,  the  Registration
Rights  Agreement and the Escrow  Agreement has been duly executed and delivered
by the Investor and, assuming the execution,  delivery and acceptance thereof by
the Company,  will  constitute the legal,  valid and binding  obligations of the
Investor,  enforceable  against the Investor in accordance with their respective
terms, subject to laws of general application relating to bankruptcy, insolvency
and the  relief of  debtors  and rules of law  governing  specific  performance,
injunctive  relief or other  equitable  remedies,  and to  limitations of public
policy as they may apply to the  indemnification  provisions set forth in any of
the Transaction Documents.

     Section 3.2  ACCREDITED  AND  SOPHISTICATED  INVESTOR.  The  Investor is an
accredited investor as defined in SEC Rule 501(a), and a sophisticated  investor
as described in SEC Rule 506(b)(2)(ii).

                                       6
<PAGE>
     Section 3.3  EVALUATION  OF RISKS.  The  Investor  has such  knowledge  and
experience in financial and business  matters as to be capable of evaluating the
merits  and  risks  of  purchasing  the  securities  issuable  pursuant  to this
Agreement,  and of protecting its interests in connection with the  transactions
contemplated hereby. The Investor understands that its investment in the Company
involves a high degree of risk.

     Section 3.4 INDEPENDENT COUNSEL. The Investor acknowledges that it has been
advised to consult with its own attorney  regarding legal matters concerning the
Company and to consult with its tax advisor  regarding the tax  consequences  of
acquiring the securities issuable hereunder.

     Section 3.5 NO REGISTRATION.  The Investor  understands that the securities
issuable  hereunder  have not been  registered  under the  Securities Act or any
other  securities  laws but are being  offered and sold to it in  reliance  upon
specific  exemptions  from the  registration  requirements  of federal and state
securities  laws and that the Company is relying  upon the truth and accuracy of
the representations,  warranties, agreements, acknowledgments and understandings
of Investor  set forth herein in order to determine  the  applicability  of such
exemptions  and the  suitability  of the  securities  being sold  hereunder  for
investment by the Investor.

     Section 3.6  INVESTMENT  INTENT.  The Investor is acquiring the  securities
issuable to it hereunder for investment purposes, and has no present arrangement
to sell any of them to or through any  Person.  The  Investor  is not,  however,
agreeing or obligated by this Agreement to hold any of those  securities for any
specific period of time, except as may otherwise  specifically  provided in this
Agreement.  The  Investor  understands  and agrees that it may bear the economic
risk of its investment in those securities for an indefinite period of time.

      Section 3.7 NO ADVERTISEMENTS. The Investor is not entering into this
Agreement as a result of or subsequent to any advertisement,  article, notice or
other communication  published in any newspaper,  magazine,  or similar media or
broadcast over television or radio, or presented at any seminar or meeting.

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company  hereby  represents and warrants to the Investor that except as
set forth in the SEC Filings or on the Disclosure Schedule:

     Section 4.1 ORGANIZATION;  QUALIFICATION. The Company is a corporation duly
organized  and validly  existing and is in good  standing  under the laws of the
State of Nevada. The Company has all requisite  corporate power and authority to
own, lease and operate its  properties and assets,  and to carry on its business
as  presently  conducted.  The Company is  qualified to do business as a foreign
corporation in each  jurisdiction  in which the ownership of its property or the
nature of its business requires such  qualification,  except where failure to so
qualify would not have a material adverse effect on the Company.

     Section 4.2  CAPITALIZATION.  The  authorized  capital stock of the Company
consists of (i) 50,000,000 shares of Common Stock, $.001 par value per share, of
which  3,202,519  are  issued  and  outstanding;;  (ii) 650  shares  of Series A
Preferred  Stock,  par value $.001 per share, of which 485 shares are issued and
outstanding; and (iii) 1,000 shares of Series B Convertible Preferred Stock, par
value  $.001 per share,  all of which are  reserved  for  issuance  pursuant  to
Section 2.1 of this Agreement. All issued and outstanding shares of Common Stock
and Series A Preferred  Stock have been duly  authorized  and validly issued and
are fully paid and nonassessable.

                                       7
<PAGE>
     Section 4.3 AUTHORIZATION.  The Company has all requisite  corporate right,
power  and  authority  to  execute  and  deliver  this  Agreement  and the other
Transaction  Documents to be executed and delivered by it, and to consummate the
transactions  contemplated hereby and thereby.  All corporate action on the part
of the Company, its directors and stockholders  necessary for the authorization,
execution,  delivery and performance of this Agreement and the other Transaction
Documents by the Company, the authorization,  sale, issuance and delivery of the
securities  issuable hereunder and the performance of the Company's  obligations
hereunder  and  thereunder  have  been  taken.  This  Agreement  and  the  other
Transaction  Documents  to which  it is a party  have  been  duly  executed  and
delivered by the Company and constitute legal, valid and binding  obligations of
the Company  enforceable in accordance with their respective  terms,  subject to
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing  specific  performance,  injunctive relief or
other equitable remedies,  and to limitations of public policy as they may apply
to the indemnification provisions set forth in any of the Transaction Documents.
Upon their  issuance and delivery  pursuant to this  Agreement,  the  securities
issueable  hereunder will be validly issued,  fully paid and  nonassessable  and
will  be  free  of any  liens  or  encumbrances;  PROVIDED,  HOWEVER,  that  the
securities  are  subject to  restrictions  on  transfer  under state and federal
securities laws. The issuance and sale of the securities hereunder will not give
rise to any preemptive right or right of first refusal or right of participation
on behalf of any person.

     Section 4.4 NO CONFLICT.  The execution and delivery of this  Agreement and
the other Transaction Documents do not, and the consummation of the transactions
contemplated  hereby  and  thereby  will not,  conflict  with,  or result in any
violation of, or default,  or give rise to a right of termination,  cancellation
or acceleration of any material  obligation or to a loss of a material  benefit,
under,  any  provision  of the  Articles of  Incorporation,  and any  amendments
thereto,  Bylaws,  Stockholders  Agreements  and any  amendments  thereto of the
Company  or any  material  mortgage,  indenture,  lease  or other  agreement  or
instrument,  permit,  concession,  franchise,  license,  judgment, order, decree
statute,  law,  ordinance,  rule or regulation  applicable  to the Company,  its
properties  or assets  and which  would have a  material  adverse  effect on the
Company's business and financial condition.

     Section  4.5 NO  UNDISCLOSED  LIABILITIES  OR EVENTS.  The  Company  has no
liabilities or obligations  other than those incurred in the ordinary  course of
the Company's business since November 30, 1999, and which individually or in the
aggregate do not or would not have a Material Adverse Effect .

     Section 4.6 NO DEFAULT.  The  Company is not  materially  in default in the
performance  or observance of any material  obligation,  agreement,  covenant or
condition contained in any indenture,  mortgage, deed of trust or other material
instrument or agreement to which it is a party or by which it is or its property
is bound,  and neither the execution,  nor the delivery by the Company,  nor the
performance by the Company of its obligations under this Agreement or any of the
other  Transaction  Documents  will  conflict  with or result  in the  breach or
violation  of any of the terms or  provisions  of, or  constitute  a default  or
result in the  creation  or  imposition  of any lien or charge on any  assets or
properties of the Company under, any material indenture, mortgage, deed of trust
or other material agreement applicable to the Company or instrument to which the
Company  is a party or by which it is bound or any  statute or the  Articles  of
Incorporation or Bylaws of the Company, or any decree, judgment,  order, rule or
regulation  of any court or  governmental  agency having  jurisdiction  over the
Company or its properties,  in each case which default, lien or charge is likely
to cause a Material Adverse Effect.

     Section  4.7  GOVERNMENTAL  CONSENT,  ETC.  Except  for the  filing  of any
required  Form D, no  consent,  approval  or  authorization  of or  designation,
declaration or filing with any governmental authority on the part of the Company
is  required  in  connection  with the  valid  execution  and  delivery  of this
Agreement,  or the offer, sale or issuance of the securities  hereunder,  or the
consummation of any other transaction contemplated hereby.

                                       8
<PAGE>
     Section 4.8  INTELLECTUAL  PROPERTY  RIGHTS.  The  Company  has  sufficient
trademarks,  trade names, patent rights,  copyrights and licenses to conduct its
business as presently conducted in the Reports, except where failure to have any
such  intellectual  property would not cause a Material  Adverse Effect.  To the
Company's knowledge,  neither the Company nor its products is infringing or will
infringe any trademark,  trade name,  patent right,  copyright,  license,  trade
secret or other similar right of others currently in existence;  and there is no
claim being made  against  the  Company  regarding  any  trademark,  trade name,
patent,  copyright,  license,  trade secret or other intellectual property right
which could have a Material Adverse Effect.

     Section 4.9 MATERIAL CONTRACTS.  The Company is not part to any agreements,
the  performance,  breach or termination of which would have a Material  Adverse
Effect.  The  agreements  to which the Company is a party  described  in the SEC
Filings  or the  Disclosure  Schedule  are valid  agreements,  in full force and
effect.  The Company is not in material breach or material  default under any of
such agreements,  except where such breach or default would not cause a Material
Adverse Effect .

     Section 4.10  LITIGATION.  There is no action,  proceeding or investigation
pending or to the Company's  knowledge  threatened against the Company,  and the
Company  is not a party to or  subject to the  provisions  of any  order,  writ,
injunction,   judgment  or  decree  of  any  court  or   government   agency  or
instrumentality, is any such case that could have a Material Adverse Effect.

     Section 4.11 TITLE TO ASSETS.  The Company has good and marketable title to
all properties and material assets owned by it all of which are disclosed in the
SEC Filings, free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable  interest other than such as are not material to the business
of the Company.

     Section 4.12  SUBSIDIARIES.  The Company does not presently own or control,
directly or  indirectly,  any  interest in any other  corporation,  partnership,
association or other business entity.

     Section 4.13 REQUIRED GOVERNMENTAL PERMITS. The Company is in possession of
and operating in compliance  with all  authorizations,  licenses,  certificates,
consents,   orders  and  permits  from  state,   federal  and  other  regulatory
authorities which are material to the conduct of its business,  all of which are
valid and in full force and effect.

     Section 4.14 LISTING. The Common Stock is listed on the NASDAQ OTC Bulletin
Board,  and the Company has not received any notice of, and has no knowledge of,
any facts or  circumstances  that could cause the Company or the Common Stock to
loose its eligibility for such listing.

     Section  4.15  OTHER  OUTSTANDING  SECURITIES/FINANCING  RESTRICTIONS.  The
Company  has no  outstanding  shares  of  Common  Stock or  securities  that are
convertible into or exchangeable for restricted shares of Common Stock, that are
eligible  for  resale  under  SEC Rule  144(k).  Set  forth as item  4.16 on the
Disclosure Schedule is a list of all restricted shares of Common Stock,  whether
issued or unissued,  that are now or within two years of the  Subscription  Date
will be eligible for resale under SEC Rule 144(k).

     Section  4.16 SEC  FILINGS.  For a period of at least  twelve  (12)  months
immediately preceding this offer and sale, (i) the Company has filed in a timely
manner  with  the SEC all  reports,  statements,  forms  and  other  information
(including exhibits) required of it under the Exchange Act; and (ii) none of the
SEC Filings (as they may have been  amended or  supplemented  as provided in the
reports)  contains any untrue  statement of a material fact or omit to state any
material fact required to be stated  therein or necessary to make the statements
therein in light of the circumstances under which they were made, not misleading
as of the date of such filing.

                                       9
<PAGE>
     Section  4.17  DILUTION.   The  Company  is  aware  and  acknowledges  that
conversion of the Preferred  Shares and the exercise of the Warrants could cause
dilution  to  existing   shareholders  and  could  significantly   increase  the
outstanding number of shares of Common Stock.

     Section 4.18 FULL DISCLOSURE.  There is no fact known to the Company (other
than general economic  conditions known to the public generally) that it has not
disclosed in writing to the Investor that could reasonably be expected to have a
Material Adverse Effect.

                                    ARTICLE V

                            COVENANTS OF THE COMPANY

     Section 5.1 During the Commitment Period, and for so long thereafter as any
of the  Preferred  Shares are  outstanding  or any of the Warrants are not fully
exercised or expired, the Company will:

     (a) CORPORATE EXISTENCE.  Preserve and maintain its corporate existence and
good standing in the jurisdiction of its  incorporation,  and qualify and remain
qualified  as  a  foreign   corporation  in  each  jurisdiction  in  which  such
qualification is required.

     (b) BUSINESS.  Continue to engage in a business of the same general type as
proposed by it on the date of this Agreement.

     (c) COMPLY WITH LAWS.  Comply in all material  respects with all applicable
laws,  rules,  regulations,  and orders,  such  compliance  to include,  without
limitation, paying before the same become delinquent all taxes, assessments, and
governmental charges imposed upon it or upon its property.

     (d) REPORTING COMPANY; TIMELY FILINGS. Remain a reporting company under the
Exchange Act, cause its Common Stock to continue to be registered  under Section
12(b) of the Exchange Act, and make all SEC Filings  required under the Exchange
Act in a timely manner.

     (e)  LISTING OF COMMON  STOCK.  Maintain  the  listing of the Common  Stock
(including the Warrant Shares and the Conversion Shares) on a Principal Market.

     (f)  NASDAQ.  Cause the Common  Stock to be listed on the Nasdaq  Small Cap
Market as soon as the Company is eligible for such listing.

     (g)  CONSOLIDATION;  MERGER.  Not effect any merger or consolidation of the
Company with or into, or a transfer of all or substantially all of the assets of
the Company to,  another entity (a  "Consolidation  Event") unless the resulting
successor  or acquiring  entity (if not the Company) (i) is a reporting  company
under the  Exchange  Act with its Common Stock listed on the Nasdaq OTC Bulletin
Board, the Nasdaq Small Cap or National  Market,  the American Stock Exchange or
the New York  Stock  Exchange,  and  (ii)  assumes  by  written  instrument  the
obligation to deliver to the Investor such shares of stock and/or  securities as
the Investor is entitled to receive pursuant to this Agreement.

     (h) OPINION OF COUNSEL.  Obtain for the Investor, at the Company's expense,
any and all  opinions  of counsel  which may be  required  in order to  convert,
exercise or sell the securities issuable hereunder,  including,  but not limited
to, obtaining for the Investor,  at the Company's  expense an opinion of counsel
with respect to the sale and transfer of the securities.

                                       10
<PAGE>
     Section  5.2.  SOFTALK  LOCKUP.  The  Company  agrees  to  obtain  a lockup
agreement (the "Lockup Agreement") from Softalk,  Inc.  ("Softalk"),  reasonably
satisfactory to the Investor,  with respect to those 4,329,004 shares of Class A
non-voting  preferred stock of Interpretel  (Canada) (the "Class A Shares") held
by Softalk.  The Lockup  Agreement shall provide that the Class A Shares may not
be  exchanged  for  shares  of  Wavetech  Common  Stock for a period of one year
following the Closing  Date;  provided,  however,  that such  restriction  shall
terminate at such time as any person seeks to acquire,  or offers or proposes to
acquire,  or agrees to acquire  directly  or  indirectly,  whether by  purchase,
tender or exchange offer,  through the acquisition of control of another person,
by  joining a  partnership,  limited  partnership,  syndicate  or other  "group"
(within  the  meaning of Section  13(d)(3) of the  Exchange  Act, or  otherwise,
beneficial ownership of any voting securities of the Company if such acquisition
would result in the purchaser's  aggregate percentage ownership of the Company's
voting securities  exceeding 35% of the Company's issued and outstanding  voting
securities (on a fully-diluted  basis).  The Lockup Agreement shall also provide
that the shares of Common Stock underlying the warrants previously issued by the
Company to Softalk shall be sold in accordance with the "leak out" provisions of
Rule 144 under the Securities Act, including any warrants transferred by Softalk
to any affiliate or employee of Softalk."

     Section 5.3. LIMITATION ON PIK DIVIDENDS. Notwithstanding the provisions of
paragraph 3(b) of the Certificate of Designation, the Company shall not elect to
pay dividends on the Preferred  Shares in shares of Common Stock,  and shall pay
such dividends only in cash, unless at the time of payment, (i) the Registration
Statement  with respect to such shares of Common Stock shall be  effective,  and
(ii) and the payment of such  dividend in shares of Common Stock would not cause
the  aggregate  number  of  shares of  Common  Stock  beneficially  owned by the
Investor,  calculated in  accordance  with Section 13(d) of the Exchange Act, to
exceed 4.99% of the outstanding shares of the Common Stock.

     Section  5.4.  RIGHT  OF  FIRST  REFUSAL  ON  FINANCINGS.  As  used in this
paragraph,  "Capital  Financing  Transaction"  means  (a) the sale of any of the
Company's (i) equity securities, or (ii) securities that are convertible into or
exchangeable for equity  securities,  or (iii) debt securities having a maturity
of more than 270 days;  or (b) loans to the  Company  having a maturity  of more
than one year; PROVIDED,  HOWEVER, that a Capital Financing Transaction does not
include the sale of Common Stock or the  issuance of options to purchase  Common
Stock made to  directors,  officers,  employees  or  consultants  to the Company
pursuant  to bona fide  employment,  benefit  or  compensation  plans,  or loans
incurred by the Company in the ordinary  course of business  that are  primarily
for operating purposes and not for capital financing  purposes.  For a period of
one year from the Effective  Date, the Company shall not engage in, or commit to
engage  in,  any  Capital  Financing   Transaction,   other  than  in  a  firmly
underwritten public offering,  without having given the Investor, 30 days' prior
written notice of its intention to engage in such Capital Financing Transaction,
which  notice  shall  set  forth  all  of the  material  terms  of the  proposed
transaction,  and  offering the Investor  and its  financial  advisors,  Thomson
Kernaghan & Co.  Limited and  Southridge  Capital  Management  LLC, the right of
first  refusal  during that 30-day notice period to agree to provide the Company
with substantially the same financing as that set forth in the notice.

                                   ARTICLE VI

                              CONDITIONS TO CLOSING

     Section 6.1. CONDITIONS TO CLOSING.  The Investor's  obligation to purchase
the Preferred Shares and to perform its other  obligations under the Transaction
Documents is subject to the following conditions precedent:

     (a) The Company shall have executed and  delivered  this  Agreement and the
other Transaction Documents to be executed by it.

                                       11
<PAGE>
     (b) The Company shall have delivered the Preferred  Shares,  the Investor's
Warrant and the Placement Agent's Warrant to the Escrow Holder.

     (c) The Investor  shall have  received the opinion of the  Company's  legal
counsel, substantially in the form of Exhibit H.

     (d) The  representations  and  warranties of the Company  contained in this
Agreement  shall be true and correct in all  material  respects on and as of the
Subscription Date.

     (e) The Company and Softalk shall have executed the Lockup Agreement.

                                   ARTICLE VII

         DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION.

     Section 7.1 DUE  DILIGENCE  REVIEW.  The Company shall from time to time as
the Investor may reasonably  request make available for inspection and review by
the Investor,  advisors to and  representatives  of the Investor (who may or may
not be  affiliated  with the Investor and who are  reasonably  acceptable to the
Company),  any underwriter  participating  in any disposition of the Registrable
Securities on behalf of the Investor pursuant to the Registration Statement, any
such registration  statement or amendment or supplement thereto or any blue sky,
NASD or other filing,  all financial  and other  records,  all SEC Documents and
other filings with the SEC, and all other corporate  documents and properties of
the Company as may be reasonably  necessary for the purpose of such review,  and
cause the  Company's  officers,  directors  and  employees  to  supply  all such
information  reasonably  requested by the  Investor or any such  representative,
advisor  or  underwriter  in  connection   with  such   Registration   Statement
(including, without limitation, in response to all questions and other inquiries
reasonably  made or  submitted  by any of them),  prior to and from time to time
after the filing and  effectiveness of the  Registration  Statement for the sole
purpose  of  enabling  the  Investor  and  such  representatives,  advisors  and
underwriters and their  respective  accountants and attorneys to conduct initial
and ongoing due  diligence  with  respect to the Company and the accuracy of the
Registration Statement.

     Section 7.2 NON-DISCLOSURE OF NON-PUBLIC INFORMATION

     (a) The Company shall not disclose non-public  information to the Investor,
advisors to or  representatives  of the Investor  unless prior to  disclosure of
such  information the Company  identifies such  information as being  non-public
information and provides the Investor,  such advisors and  representatives  with
the  opportunity to accept or refuse to accept such  non-public  information for
review. The Company may, as a condition to disclosing any non-public information
hereunder,  require the Investor's  advisors and representatives to enter into a
confidentiality agreement in form reasonably satisfactory to the Company and the
Investor.

     (b)  Nothing  herein  shall  require  the  Company to  disclose  non-public
information to the Investor or its advisors or representatives,  and the Company
represents that it does not disseminate  non-public information to any investors
who purchase stock in the Company in a public offering,  to money managers or to
securities  analysts.  The Company will immediately  notify the Investor and, if
any, underwriters of any Registrable  Securities,  of any event or the existence
of any  circumstance  (without any  obligation to disclose the specific event or
circumstance)  of which it becomes aware,  constituting  non-public  information
(whether or not requested of the Company  specifically  or generally  during the
course of due diligence by such persons or entities), which, if not disclosed in
the  prospectus  included  in  the  Registration   Statement  would  cause  such
prospectus  to  include  a  material  misstatement  or to omit a  material  fact

                                       12
<PAGE>
required to be stated therein in order to make the statements, therein, in light
of the circumstances in which they were made, not misleading.

                                  ARTICLE VIII

                                     LEGENDS

     Section 8.1 LEGENDS.  Unless  otherwise  provided below,  each  certificate
representing   Registrable   Securities  will  bear  a  legend  (the  "Legend"),
substantially  in the  following  form or such other form as may be  required by
applicable law:

     THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
     THE U.S.  SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
     OTHER  APPLICABLE  SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN
     EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH
     OTHER  SECURITIES   LAWS.   NEITHER  THIS  SECURITY  NOR  ANY  INTEREST  OR
     PARTICIPATION  HEREIN  MAY  BE  REOFFERED,  SOLD,  ASSIGNED,   TRANSFERRED,
     PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT
     TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
     TO A TRANSACTION THAT IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

Upon the  execution and delivery of this  Agreement,  the Company shall issue to
the Transfer Agent  instructions in  substantially  the form of Exhibit G hereto
(the "Transfer Agent  Instructions").  The Company shall not revoke the Transfer
Agent  Instructions  during  the  time  that  the  Investor  is  the  holder  of
Registrable  Securities.  The  Company  shall use its best  efforts to cause the
Transfer Agent to transfer and issue  unlegended  certificates  for  Registrable
Securities in accordance with the Transfer Agent Instructions.

     Section 8.2 NO OTHER LEGEND OR STOCK TRANSFER RESTRICTIONS. No legend other
than  the  one  specified  in  Section  8.1  shall  be  placed  on  certificates
representing  Registrable Securities and no instructions,  stop transfer orders,
stock  transfer  restrictions,  or  other  restrictions  shall  be  given to the
Transfer Agent with respect to Registrable Securities.

     Section  8.3  LIQUIDATED  DAMAGES.(a)  In the  event the  Company  does not
deliver,  or cause the  Transfer  Agent to deliver  unlegended  Common  Stock in
compliance  with the Transfer Agent  Instructions  within five (5) calendar days
after the Transfer Agent's receipt (the "Receipt Date") of a Transfer Notice and
applicable  share  certificate,  the  Company  shall  pay  to the  Investor,  in
immediately available funds, upon demand, as liquidated damages for such failure
and not as a penalty,  for each 500 shares of Common Stock to be so delivered by
the  Investor as set forth  above,  $500 for each of the first ten (10) days and
$1,000 per day  thereafter  that the  unlegended  shares of Common Stock are not
delivered,  which liquidated damages shall run from the sixth calendar day after
the Receipt Date.

                                   ARTICLE IX

                          CHOICE OF LAW / JURISDICTION

     Section 9.1 CHOICE OF LAW;  VENUE;  JURISDICTION.  This  Agreement  and the
other  Transaction  Documents shall be construed and enforced in accordance with
the laws of the State of  Arizona,  except  for (i)  matters  arising  under the
federal  securities  laws,  which shall be construed  and enforced in accordance

                                       13
<PAGE>
with those laws,  (ii) matters  relating to the  Company's  organization,  which
shall be governed by the laws of the  jurisdictions  of its  incorporation,  and
(iii) if any provision of this  Agreement or any other  Transaction  Document is
unenforceable  under Arizona law but is enforceable  under the laws of the State
of New York, then New York law shall govern the  construction and enforcement of
that  provision.  Any  controversy  or claim  arising out of or relating to this
Agreement or any other  Transaction  Document  (whether in contract or tort,  or
both, or at law or in equity) shall be determined by binding  arbitration in the
Borrow  of  Manhattan,  City of New  York,  in  accordance  with the  Commercial
Arbitration Rules (the "Rules") of the American Bar Association,  before a panel
of three arbitrators, one appointed by each of the Investor and the Company, and
the third chosen by the two so appointed.  If the two arbitrators  chosen by the
parties cannot agree on a third,  then the third shall be selected in accordance
with the Rules.  The prevailing  party in any  arbitration  proceeding  shall be
awarded reasonable  attorneys fees and costs of the proceeding.  The arbitration
award  shall be final,  and may be  entered  in any court  having  jurisdiction.
Nothing in this paragraph  shall preclude  either party from applying to a court
for temporary  equitable relief,  when appropriate,  pending and subject to such
temporary  orders and permanent award as the arbitrator or arbitrators may make.
The parties  hereby consent to the exclusive  jurisdiction  of the United States
District Court for the Southern District of New York for that purpose.

                                    ARTICLE X

                                   ASSIGNMENT

     Section  10.1  ASSIGNMENT.  Neither  this  Agreement  nor any rights of the
Investor or the Company  hereunder  may be assigned by either party to any other
Person.  Notwithstanding  the  foregoing,  (a) the  provisions of this Agreement
shall inure to the  benefit of, and be  enforceable  by, any  transferee  of any
Preferred  Shares,  Warrants  or  Registrable  Securities,  (b)  the  Investor's
interest in this  Agreement may be assigned at any time, in whole or in part, to
any other Person with the prior  written  consent of the Company,  which consent
shall not unreasonably be withheld.

                                   ARTICLE XI

                                     NOTICES

     Section 11.1 NOTICES. All notices, demands, requests, consents,  approvals,
and other  communications  required or permitted  hereunder  shall be in writing
and, unless otherwise  specified herein,  shall be (i) personally  served,  (ii)
deposited  in the mail,  registered  or  certified,  return  receipt  requested,
postage  prepaid,  (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other  address as such party shall have  specified
most recently by written notice. Any notice or other  communication  required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or  delivery  by  facsimile,   with  accurate  confirmation   generated  by  the
transmitting  facsimile  machine,  at the address or number designated below (if
delivered on a Business Day during normal business hours where such notice is to
be received),  or the first  Business Day following  such delivery (if delivered
`other than on a Business Day during normal  business hours where such notice is
to be received) or (b) on the second  Business Day following the date of mailing
by reputable courier service, fully prepaid,  addressed to such address, or upon
actual receipt of such mailing,  whichever shall first occur.  The addresses for
such communications shall be:

                                       14
<PAGE>
IF TO THE INVESTOR:                       IF TO THE COMPANY:
Cedar Avenue LLC                          Wavetech International, Inc.
Corporate Center                          5210 East Williams Circle, Suite 200
Windward One, West Bay Road               Tucson, Arizona 85711
PO Box 31106 SMB                          Attention: Gerald I. Quinn, President
Grand Cayman, Cayman Islands              Facsimile No. (520) 750- 9194
Attention:  David Sims
Facsimile No. (284) 494-4771

WITH A COPY (THAT DOES NOT                WITH A COPY (THAT DOES NOT
CONSTITUTE NOTICE) TO:                    CONSTITUTE NOTICE) TO:
John M. Mann                              Squire, Sanders & Dempsey L.L.P.
Attorney at Law                           40 North Central Avenue, Suite 2700
1330 Post Oak Boulevard, Suite 2800       Phoenix, Arizona 85004
Houston, Texas 77056-3060                 Attn:  Gregory R. Hall
Facsimile No. (713) 622-7185              Facsimile No. (602) 253-8129

Either party hereto may from time to time change its address or facsimile number
for  notices  under this  Section  11.1 by giving at least ten (10) days'  prior
written  notice of such changed  address or facsimile  number to the other party
hereto.

                                   ARTICLE XII

                                 INDEMNIFICATION

     Section  12.  1.   SURVIVAL  OF   REPRESENTATIONS   AND   WARRANTIES.   All
representations  and  warranties  contained in this  Agreement  shall survive it
termination.

     Section 12.2.  INDEMNIFICATION BY THE COMPANY.  The Company shall indemnify
and  hold the  Investor,  the  Placement  Agent,  and each of their  respective,
directors,  officers,  employees,  agents and  attorneys  (each an  "Indemnified
Party" and collectively,  the "Indemnified  Parties") harmless from and against,
and agree promptly to defend any such  Indemnified  Party from and reimburse any
such  Indemnified  Party for,  any and all means any  losses,  costs,  expenses,
damages, taxes, penalties, fines, charges, demands, liabilities, obligations and
claims of any kind  (including  interest,  penalties and  reasonable  attorneys'
fees,  expenses and  disbursements)  ("Losses") which any such Indemnified Party
may suffer or incur,  or become  subject to,  arising out of or resulting  from,
without duplication:

     (a) any breach or inaccuracy as of the date of this Agreement of any of the
representations and warranties made by the Company in this Agreement; and

     (b) any failure by the Company to carry out, perform, satisfy and discharge
any  of its  respective  covenants,  agreements,  undertakings,  liabilities  or
obligations under this Agreement.

     Section 12.3.  INDEMNIFICATION  PROCEDURES.  Any party asserting a right to
indemnification  under  Sections  12.2 shall so notify the Company in writing as
promptly  as  practicable.  The  Indemnified  Party's  failure  to so notify the
Company of any such matter shall not release the  Company,  in whole or in part,
from its  obligations to indemnify  under this Article XII, except to the extent
the Indemnified Party's failure to so notify actually prejudices Company. If the
facts giving rise to such indemnification shall involve any actual or threatened
claim or demand by or against a third  party,  the Company  shall be entitled to
control  the defense or  prosecution  of such claim or demand in the name of the
Indemnified  Party,  with counsel  reasonably  satisfactory  to the  Indemnified
Party, if (i) it notifies the  Indemnified  Party in writing of its intention to
do so within 20 days of its receipt of such notice, without prejudice,  however,
to the right of the Indemnified Party to participate  therein through counsel of
its own  choosing,  which  participation  shall  be at the  Indemnified  Party's
expense unless (x) the Indemnified  Party shall have been advised by its counsel

                                       15
<PAGE>
that use of the same counsel to represent  both the Company and the  Indemnified
Party would present a conflict of interest (which shall be deemed to include any
case where there may be a legal  defense or claim  available to the  Indemnified
Party which is different  from or additional to those  available to the Company)
or (y) the Company shall fail to defend or prosecute in good faith such claim or
demand within a reasonable  time, in which case the  reasonable  fees of counsel
for the  Indemnified  Party  shall be for the  account  of the  Company  and the
Company  shall not have the right to direct the defense of such action on behalf
of the  Indemnified  Party,  and (ii) it agrees to accept  full  responsibility,
indemnify and hold  harmless the  Indemnified  Party in  accordance  herewith in
respect of the claim or demand.  Whether or not the Company chooses to defend or
prosecute such claim,  the parties hereto shall  cooperate in the prosecution or
defense of such claim and shall furnish such records,  information and testimony
and attend such conferences, discovery proceedings, hearings, trials and appeals
as may  reasonably be requested in connection  therewith.  The Company shall not
settle or permit the settlement of any such third party claim or action in which
any  relief  other  than the  payment of money  damages  is sought  against  the
Indemnified  Party without the prior written consent of the  Indemnified  Party.
The Indemnified  Party shall not settle or permit the settlement of any claim or
action for which it is entitled  to  indemnification  without the prior  written
consent of the  Company,  unless  the  Company  shall have  failed to assume the
defense  thereof  after the notice  referred  to in the first  sentence  of this
Section 12.3, and in the manner provided above.

     Section  12.3.  SUBROGATION.  In  the  event  of any  indemnification  made
pursuant to a third party claim,  the Company  shall be subrogated to the extent
of such payment to all of the rights of recovery of the Indemnified  Party,  who
shall execute all papers  required and shall do everything that may be necessary
to secure such rights,  including the execution of such  documents  necessary to
enable the Company effectively to bring suit to enforce such rights.

                                  ARTICLE XIII

                                  MISCELLANEOUS

     Section  13.1  COUNTERPARTS/FACSIMILE/AMENDMENTS.  This  Agreement  may  be
executed  in multiple  counterparts,  each of which may be executed by less than
all of the parties and shall be deemed to be an original  instrument which shall
be enforceable  against the parties actually executing such counterparts and all
of which  together  shall  constitute  one and the same  instrument.  Except  as
otherwise  stated  herein,  in  lieu  of the  original  documents,  a  facsimile
transmission  or  copy of the  original  documents  shall  be as  effective  and
enforceable  as the  original.  This  Agreement may be amended only by a writing
executed by all parties.

     Section 13.2 ENTIRE AGREEMENT.  This Agreement, the Exhibits or Attachments
hereto, which include, but are not limited to the Warrant, the Escrow Agreement,
and the  Registration  Rights  Agreement  set forth  the  entire  agreement  and
understanding  of  the  parties  relating  to  the  subject  matter  hereof  and
supersedes  all  prior  and   contemporaneous   agreements,   negotiations   and
understandings  between  the  parties,  both oral and  written  relating  to the
subject matter hereof.  The terms and conditions of all Exhibits and Attachments
to  this  Agreement  are  incorporated   herein  by  this  reference  and  shall
constitute-part of this Agreement as is fully set forth herein.

     Section  13.3  SURVIVAL;  SEVERABILITY.  The  representations,  warranties,
covenants  and  agreements  of the parties  hereto  shall  survive  each Closing
hereunder.  In the event  that any  provision  of this  Agreement  becomes or is
declared by a court of competent  jurisdiction to be illegal,  unenforceable  or
void,  this  Agreement  shall  continue  in full force and effect  without  said
provision; provided that such severability shall be ineffective if it materially
changes the economic benefit of this Agreement to any party.

                                       16
<PAGE>
     Section 13.4 TITLE AND  SUBTITLES.  The titles and  subtitles  used in this
Agreement  are  used  for  convenience  only  and  are not to be  considered  in
construing or interpreting this Agreement.

     Section 13.5 REPORTING  ENTITY FOR THE COMMON STOCK.  The reporting  entity
relied upon for the  determination of the trading price or trading volume of the
Common Stock on any given Trading Day for the purposes of this  Agreement  shall
be Bloomberg,  L.P. or any successor thereto.  The written mutual consent of the
Investor and the Company shall be required to employ any other reporting entity.

     Section  13.6  REPLACEMENT  OF  CERTIFICATES.  Upon (i) receipt of evidence
reasonably  satisfactory  to the  Company  of the loss,  theft,  destruction  or
mutilation of a certificate  representing the Preferred  Shares,  the Conversion
Shares or the  Warrant  Shares and (ii) in the case of any such  loss,  theft or
destruction  of such  certificate,  upon  delivery of an indemnity  agreement or
security  reasonably  satisfactory in form and amount to the Company or (iii) in
the  case  of any  such  mutilation,  on  surrender  and  cancellation  of  such
certificate,  the  Company at its expense  will  execute  and  deliver,  in lieu
thereof, a new certificate of like tenor.

     Section 13.7 FEES AND EXPENSES.  The Company  shall pay the following  fees
and expenses:

     (a) Placement  Agent's Fee. The Company shall pay the Placement Agent a fee
equal to 6.25% of the purchase price of the Preferred Shares, and shall pay Roth
Capital  Partners,  Inc.,  a fee  equal to 3.75%  of the  purchase  price of the
Preferred Shares, payable on the Subscription Date.

     (b) Legal and Escrow Fees. On the Subscription  Date, the Company shall pay
the Investor's  counsel,  John M. Mann, Esq., $30,000 for legal,  administrative
and escrow fees incurred through the Subscription  Date.  Except as so provided,
each of the parties shall pay its own fees and expenses  (including those of any
attorneys,  accountants  and  others  engaged  by it)  in  connection  with  the
negotiation and preparation of this Agreement.

     Section 13.8 BROKERAGE.  Each of the parties hereto  represents that it has
had no dealings in connection  with this  transaction  with any finder or broker
who will  demand  payment of any fee or  commission  from the other  party.  The
Company on the one hand, and the Investor, on the other hand, agree to indemnify
the other against and hold the other  harmless from any and all  liabilities  to
any  person  claiming  brokerage  commissions  or  finder's  fees on  account of
services  purported to have been rendered on behalf of the Company in connection
with this Agreement or the transactions contemplated hereby.

     Section  13.9   CONFIDENTIALITY.   If  for  any  reason  the   transactions
contemplated by this Agreement are not  consummated,  each of the parties hereto
shall keep  confidential  any information  obtained from any other party (except
information  publicly  available  or in such  party's  domain  prior to the date
hereof,  and except as required by court order) and shall promptly return to the
other  parties  all  schedules,  documents,  instruments,  work  papers or other
written information,  without retaining copies thereof,  previously furnished by
it as a result of this Agreement or in connection herewith.

                            [signature page follows]

                                       17
<PAGE>
     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed by the undersigned, thereunto duly authorized, as of the date first set
forth above.

WAVETECH INTERNATIONAL, INC.

By /s/ Gerald I. Quinn
  -------------------------------
  Gerald I. Quinn, President

Date Signed May 1, 2000
           ----------------------

                                        CEDAR AVENUE LLC
                                        By Navigator Management Ltd., Director

                                        By /s/ David Sims
                                          -------------------------------
                                          David Sims, Director

                                        Date Signed  April 28, 2000
                                                   ----------------------

                                       18
<PAGE>
                                    EXHIBIT A
                           CERTIFICATE OF DESIGNATION

                                    EXHIBIT B
                               DISCLOSURE SCHEDULE

                                    EXHIBIT C
                               INVESTOR'S WARRANT

                                    EXHIBIT D
                            PLACEMENT AGENT'S WARRANT

                                    EXHIBIT E
                          REGISTRATION RIGHTS AGREEMENT

                                    EXHIBIT F
                                ESCROW AGREEMENT

                                    EXHIBIT G
                           TRANSFER AGENT INSTRUCTIONS

                                    EXHIBIT H
                       LEGAL OPINION OF COMPANY'S COUNSEL

                                       19

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00009-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00009-of-00352.parquet"}]]