Document:

TELEFAX COVER SHEET
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Date:    8 May 200                     Number of pages including cover sheet 2

                                                  Originals to follow in mail

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To:               Greg Badger                    From:             Matthew Lem

                  Thomson Kernaghan              Fax               416-680-6352
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Re:      Proposal of Transformation Processing Inc.

Further to your telephone  conversation of today with Mr. Uwe Maski, please find
attached a copy of the Certificate of Full  Performance of Proposal with respect
to the above-noted proposal.

Should you have any questions, please contact myself at 369-3126.

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The information contained in this facsimile is confidential information intended
only for the use of the  individual or entity named above.  If you have received
this communication in error,  please immediately notify us by telephone (collect
if necessary) to arrange the return of the original to us. Thank you.

If you have difficulty receiving this transmission please call:

               Operator: Pat Borzeilino Telephone: (416) 865-0210

<PAGE>

                           In the Province of Ontario

              Certificate of Full Performance of Proposal - Form 46
                                   (Sec. 65.3)

The  undersigned  BDO  Dunwoody  Limited the trustee  acting in the  proposal of
Transformation  Processing,  Inc. certifies that the proposal, as filed with the
official  received on the 14th day of October 1999, has been fully  performed as
of the 5th day of January 2000.

Dated at Toronto, Ontario this 8th day of May, 2000.

------------------------------
BDO Dunwoody Limited - Trustee

<PAGE>

BDO                    BDO Dunwoody Limited
                                                Royal Bank Plaza
                                                P.O. Box 33
                                                Toronto, Ontario, Canada M5J 2J9
                                                Telephone:  (416) 865-0210
                                                Telefax:    (416) 865-0904

5 May 2000

Sent via fax (416) 860-860-6352 and regular mail

Thomson Kernaghan & Co. Limited
365 Bay Street
10th Floor
Toronto, ON
M5H 2V2

Attention:        Gregg Badger
                  Senior Vice-President & Director

Dear Sirs,

Re:      Transformation Processing, Inc.

Further  to your  correspondence  to us  dated  may 3,  2000,  we have  reviewed
paragraph 6.3(h) of the Merger Agreement and advise as follows:

         1.       TPI is  not  in  "Bankruptcy  Proceedings".  Rather,  it is in
                  "Division 1 Proposal  Proceedings"  under the  Bankruptcy  and
                  Insolvency Act of Canada.

         2.       All Division 1 Proposal  Proceedings  have been  substantially
                  completed and the appeal period for the order  approving TPI's
                  proposal has expired, with no appeal having been filed.

         3.       All payments to creditors  under the said  proposal  have been
                  made in full as set  forth in the  proposal,  save and  except
                  payment  of  the  Trustee's  fees,   which  are  estimated  at
                  approximately  $77,000.  More than sufficient  funds remain in
                  trust to cover this obligation.

         4.       The Division 1 Proposal Proceedings will be completed when the
                  Trustee  obtains  its  discharge  from the  Superior  Court of
                  Justice  and  the  Trustee  is  currently  in the  process  of
                  obtaining its  discharge.  The Trustee does not anticipate any
                  opposition or  difficulties  in obtaining its  discharge.  The
                  only  issues  before  the  court  are  the  completion  of the
                  proposal terms by the debtor and the fees and disbursements of
                  the Trustee.

Should you have any  questions  with  regard to the above,  please  contact  the
undersigned.

Yours very truly,

BDO DUNWOODY LIMITED
Per:

Mark G. Chow, CA, CIP, CFE
Vice-President

:pb

<PAGE>

BDO                        BDO Dunwoody Limited

                                                Royal Bank Plaza
                                                P.O. Box 33
                                                Toronto, Ontario, Canada M5J 2J9
                                                Telephone:  (416) 865-0210
                                                Telefax:    (416) 865-0904

1 March 2000

Sent via facsimile (416) 860-6352

Thomson Kernaghan
365 Bay Street
Toronto, Ontario
M5H 2V2

Attention:                 Greg Badger

Dear Sirs,

Re:      Proposal of Transformation Processing, Inc. ("TPI")

Further to your recent telephone message,  we attach the following  documents in
order for you to assess the status of the creditor claims against the company:

               1.   A copy of the Claims Register (annotated);

               2.   A copy of the DRAFT  Dividend  Sheet - Preferred  Creditors;
                    and

               3.   A copy of the DRAFT Dividend Sheet - Unsecured Creditors.

The claims  register  identifies  all  creditors  that the  trustee was aware of
during the course of the administration of the proposal.  All creditors notified
of the  proposal,  as  reflected by the claims  register,  have had their claims
compromised.  That is to say that these creditors no longer hold a claim against
the company for any amounts incurred by TPI prior to 23 August 1999.

The dividend  sheets  reflect the amounts that were paid to those  creditors who
properly filed claims.  The levy is an amount that is paid to the Superintendent
of  Bankruptcy  and  represents  a tax  charged on dividend  distributions.  All
creditors  notified of the  proposal who failed to file and prove a claim cannot
now receive a dividend.

As per your message, you have requested  information regarding the status of the
corporation, which we advise as follows:

               -    The  proposal  is a method  of  reorganizing  the  financial
                    affairs of the company to reduce or eliminate  the debt that
                    has impeded its viability;

               -    The company  continues as any other legal  entity,  with all
                    requisite filings (e.g. tax) being made in order to maintain
                    its corporate charter;

<PAGE>

               -    All debts  incurred  subsequent  to 23  August  1999 are not
                    eliminated  by the  proposal,  which  may  include  services
                    relating to SEC filings, account maintenance, etc.

Should you have any  questions  with  regard to the above,  please  contact  the
undersigned.

Yours very truly,

BDO DUNWOODY LIMITED
Per:

Mark G. Chaw, CA, CIP, CFE
President
:pb
Encl.

<PAGE>

BDO                    BDO Dunwoody Limited
                                                Royal Bank Plaza
                                                P.O. Box 33
                                                Toronto, Ontario, Canada M5J 2J9
                                                Telephone:  (416) 865-0210
                                                Telefax:    (416) 865-0904
29 November 1999

Delivered

Thomson Kernaghan
365 Bay Street
Toronto, Ontario
M5H 2V2

Attention:  Mark E. Valentine

Dear Sirs,

Re:      Proposal of Transformation Processing Inc. (("TPI")

We are pleased to advise that on 25 November  1999,  we obtained an Order of the
Court approving TPI's proposal to its creditors, a copy of which is enclosed for
your files.

In accordance with paragraph 26 of the proposal,  we request that you forward to
us the  sum of  $375,000  to  satisfy  TPI's  obligations  to its  creditors  as
contemplated  under the Proposal,  including the proper fees and expenses of the
Trustee.  Any excess funds remaining after the payment of TPI's obligations will
be returned to Thomson Kernaghan upon conclusion of this matter.

We also  advise  that the appeal  period for the Order will expire on 5 December
1999 and, accordingly, no distribution will be made prior to that date.

Should you have any  questions  with  regard to the above,  please  contact  the
undersigned.

Yours very truly,
BDO DUNWOODY LIMITED
Per:

Uwe Manski, FCA, FCIP
President

Encl.
/bcCourt File No. 32-107046

                            SUPERIOR COURT OF JUSTICE

                                  IN BANKRUPTCY

                        IN THE MATTER OF THE PROPOSAL OF
             TRANSFORMATION PROCESSING, INC. OF THE CITY OF TORONTO
             IN THE PROVINCE OF ONTARIO, A CORPORATION INCORPORATED
                    UNDER THE LAWS OF THE PROVINCE OF ONTARIO

MASTER                              )                THURSDAY, THE 25TH DAY OF
                                    )
                                    )                NOVEMBER, 1999

                                      ORDER

         THIS MOTION made by BDO Dunwoody  Limited,  the trustee (the "Trustee")
in the Proposal of Transformation Processing, Inc. ("TPI"), was head this day at
393 University Avenue, Toronto.

         ON  READING  the  Notice of Motion,  the  Report of the  Trustee  dated
November 9, 1999 (the "Trustee's Report"),  filed, and on hearing submissions of
counsel for the Trustee and the Court being satisfied that the required majority
of  creditors  have duly  accepted  the  Proposal on the terms  contained in the
Proposal  annexed as Appendix "A" hereto (the  "Proposal"),  and being satisfied
that the said terms are reasonable and calculated to benefit the general body of
creditors and that no offences or facts have been proven to justify the Court in
withholding its approval,

1.   THIS COURT ORDERS that the Proposal be and same is hereby approved pursuant
     to

2.   THIS COURT  ORDERS that the Trustee  shall  forthwith  give  security in an
     amount  give  security  in an  amount to be fixed by the  official  receive
     pursuant to subsection 16(1) of the Bankruptcy and Insolvency Act.

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