Document:

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                                                                 EXHIBIT 10.54
                       EQUITY LINE OF CREDIT AGREEMENT

         This EQUITY LINE OF CREDIT AGREEMENT (this "Agreement") is entered into
as of the 21 day of November 2000, by and between HAMBRECHT & QUIST GUARANTY
FINANCE, LLC (the "Investor"), and Interactive Telesis Inc. (the "Company"), a
Delaware corporation.

         WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Investor,
from time to time as provided herein, and the Investor shall purchase, shares of
the Company's Convertible Preferred Stock (as defined below) having an aggregate
purchase price of $3,000,000; and

         WHEREAS, such investments will be made in reliance upon the provisions
of Section 4(2) ("Section 4(2)") and Regulation D ("Regulation D") of the United
States Securities Act of 1933, as amended and the rules and regulations
promulgated thereunder (the "Securities Act"), and/or 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 securities convertible into the
Company's Common Stock to be made hereunder.

         NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I
                               CERTAIN DEFINITIONS

SECTION 1.1 "AVERAGE DOLLAR TRADING VOLUME" with respect to any date, shall be
calculated by (a) multiplying the reported trading volume of Common Stock on
each of the Trading Days in the twenty-two (22) days immediately preceding such
date by the average of the high and low reported share price on such dates, (b)
adding the results together, and (c) dividing the sum by the number of Trading
Days obtained under Section 1.1(a).

SECTION 1.2 "BID PRICE" shall mean, with respect to any Trading Day, the closing
bid price on such Trading Day of the Common Stock on the Principal Market.

SECTION 1.3 "BLACKOUT SHARES" shall have the meaning assigned to them in Section
2.6. SECTION 1.4 "CAPITAL SHARES" shall mean the Common Stock, the Preferred
Stock and any shares of any other class of stock whether now or hereafter
authorized, having the right to participate in the distribution of dividends (as
and when declared) and assets (upon liquidation of the Company).

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SECTION 1.5 "CLOSING" shall mean one of the closings of a purchase and sale of
the Put Shares pursuant to Section 2.1.

SECTION 1.6 "CLOSING DATE" shall mean, with respect to a Closing, the second
Trading Day following the Put Date related to such Closing, provided all
conditions to such Closing have been satisfied on or before such Trading Day.

SECTION 1.7 "COMMITMENT PERIOD" shall mean the period commencing from the
Effective Date until the earlier of (a) close of business on January ___, 2002,
unless this Agreement is earlier terminated by the Investor pursuant to Sections
2.4 or 10.8, or (b) such earlier date as the Company and the Investor may
mutually agree in writing.

SECTION 1.8 "COMMON STOCK" shall mean the Company's common stock, $0.001 par
value per share.

SECTION 1.9 "COMMON STOCK EQUIVALENTS" shall mean any securities that are
convertible into or exchangeable for Common Stock or any warrants, options or
other rights to subscribe for or purchase Common Stock or any such convertible
or exchangeable securities.

SECTION 1.10 "CONVERTIBLE PREFERRED STOCK" shall mean the Company's Series A
Convertible Preferred Stock having a payment-in-kind dividend rate of 7.5%
payable monthly, in the same subseries, at a price per share equal to 83% of the
closing price of the Common Stock on the date such dividend is payable and such
other rights, preferences and privileges as are specified in the form of
Certificate of Designation of Rights of the Series A Convertible Preferred Stock
("Certificate of Designation") attached hereto as Exhibit A.

SECTION 1.11 "CONDITION SATISFACTION DATE" shall have the meaning set forth in
Section 7.2 of this Agreement.

SECTION 1.12 "DAMAGES" shall mean any loss, claim, damage, liability, costs and
expenses (including, without limitation, reasonable attorneys' fees and
disbursements and costs and expenses of expert witnesses and investigation).

SECTION 1.13 "DIVIDEND SHARES" shall mean those additional shares of shares of
the Company's Series A Convertible Preferred Stock issued as a dividend
payment-in-kind and in the same subseries as the underlying Convertible
Preferred Stock at an annual rate of 7.5%.

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SECTION 1.14 "EFFECTIVE DATE" shall mean the date on which the SEC first
declares effective a Registration Statement registering resale of the
Registrable Securities as set forth in Section 7.2(a).

SECTION 1.15 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder.

SECTION 1.16 "INVESTMENT AMOUNT" shall mean the dollar amount paid by the
Investor to purchase Put Shares as specified in a Put Notice.

SECTION 1.17 "LEGEND" shall have the meaning specified in Section 8.1.

SECTION 1.18 "MARKET PRICE" on any given date shall mean lower of (a) the
average of the Bid Prices of the Common Stock over the Valuation Period and (b)
the closing price of the Common Stock on such date.

SECTION 1.19 "MAXIMUM COMMITMENT AMOUNT" shall mean $3,000,000.

SECTION 1.20 "MATERIAL ADVERSE EFFECT" shall mean any effect on the business,
operations, properties or financial condition of the Company that is material
and adverse to the Company and all other entities controlled by the Company,
taken as a whole, and/or any condition, circumstance, or situation that would
prohibit or otherwise interfere with the ability of the Company to enter into
and perform its obligations under any of (a) this Agreement, (b) the
Registration Rights Agreement (c) the Warrant Purchase Agreement , (d) the
Warrant, (e) the Loan and Security Agreement and (f) documents related thereto.

SECTION 1.21 "MAXIMUM PUT AMOUNT" shall equal, on any potential Put Notice Date,
the LESSER of (a) $500,000 or (b) two (2) times the Average Dollar Trading
Volume computed as of the Put Date in question.

SECTION 1.22 "NASD" shall mean the National Association of Securities Dealers,
Inc.

SECTION 1.23 "OUTSTANDING" when used with reference to Capital Shares,
shall mean, at any date, all issued and outstanding Capital Shares, and shall
include all Capital Shares issuable in respect of outstanding scrip or any
certificates representing fractional interests in Capital Shares; provided,
however,

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that "Outstanding" shall not refer to any Capital Shares then directly or
indirectly owned or held by or for the account of the Company.

SECTION 1.24 "PERSON" shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.

SECTION 1.25 "PRINCIPAL MARKET" shall mean the principal trading exchange or
market for the Common Stock, which is currently the Over the Counter (OTC)
Bulletin Board.

SECTION 1.26 "PURCHASE PRICE" shall mean, with respect to a Put, 83% of the
Market Price of the Common Stock on the applicable Closing Date.

SECTION 1.27 "PUT" shall mean the Company's exercise of its rights to require
the Investor to purchase a specified amount of the Put Shares, subject to the
terms and conditions of this Agreement.

SECTION 1.28 "PUT NOTICE DATE" shall mean the Trading Day during the Commitment
Period that a Put Notice to sell Preferred Stock to the Investor is deemed
delivered pursuant to Section 2.2(b) hereof.

SECTION 1.29 "PUT NOTICE" shall mean a written notice to the Investor setting
forth the Investment Amount that the Company intends to require the Investor to
purchase pursuant to the terms of this Agreement.

SECTION 1.30 "PUT SHARES" shall mean all shares of Convertible Preferred Stock
issued or issuable pursuant to a Put that has been exercised or may be exercised
in accordance with the terms and conditions of this Agreement.

SECTION 1.31 "REGISTRABLE SECURITIES" shall mean the Common Stock issuable upon
the conversion of (a) the Put Shares, (b) the Dividend Shares, (c) the Warrant
Shares, (d) the Blackout Shares and any securities issued or issuable with
respect to any of the foregoing by way of exchange, stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. As to any particular
Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (w) the Registration Statement has been declared
effective by the SEC and all Registrable Securities have been disposed of
pursuant to the Registration Statement, (x) all Registrable Securities have
been, or could be in any three-month period, 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, (y) such time as
all Registrable Securities have been otherwise

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transferred to holders who may trade such shares without restriction under the
Securities Act, and the Company has delivered a new certificate or other
evidence of ownership for such securities not bearing a restrictive legend or
(z) in the opinion of counsel to the Company, which counsel shall be reasonably
acceptable to the Investor, all Registrable Securities may be sold without
registration or the need for an exemption from any registration requirements and
without any time, volume or manner limitations pursuant to Rule 144(k) (or any
similar provision then in effect) under the Securities Act.

SECTION 1.32 "REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement of even date herewith entered into between Investor and the Company in
the form of Exhibit B hereto.

SECTION 1.33 "REGISTRATION STATEMENT" shall mean a registration statement on
Form S-1 filed by the Company and maintained in full force and effect during the
Commitment Period sufficient to cover registration of the maximum amount of
Common Stock issuable upon conversion of the Put Shares and the Warrant Shares
that can be Put to the Investor under this Agreement together with reasonable
amount of Common Stock for the Dividend Shares and the Blackout Shares (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 Warrant 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 1.34 "REGULATION D" shall have the meaning set forth in the recitals of
this Agreement.

SECTION 1.35 "REICHMANN TRANSACTION" shall mean that transaction among BH
Capital and Excalibur ("Reichmann") and Borrower, pursuant to an agreement among
the aforementioned parties dated June 12, 2000, as amended up to $1,000,000 in
additional financing and for which prospectus Form SB-2 numbered Z63592A2 was
filed with the SEC and dated October 6, 2000.

SECTION 1.36 "SEC" shall mean the Securities and Exchange Commission.

SECTION 1.37 "SECTION 4(2)" shall have the meaning set forth in the recitals of
this Agreement.

SECTION 1.38 "SECURITIES ACT" shall have the meaning set forth in the recitals
of this Agreement.

SECTION 1.39 "SEC DOCUMENTS" shall mean the Company's latest Form 10-K as of the
time in question, all Forms 10-Q, or their equivalent under Regulation S-B and
8-K filed thereafter, and the Proxy

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Statement for its latest fiscal year as of the time in question 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 1.401 "SUBSCRIPTION DATE" shall mean the date on which this Agreement is
executed and delivered by the parties hereto.

SECTION 1.41 "TRADING DAY" shall mean any day during which the Principal Market
shall be open for business.

SECTION 1.42 "VALUATION EVENT" shall mean an event in which the Company at any
time during a Valuation Period takes any of the following actions: (a)
subdivides or combines its Common Stock; (b) pays a dividend in its capital
stock or makes any other distribution of its Capital Shares except for dividends
paid or distributions made in respect of preferred stock; (c) issues any
additional Capital Shares ("Additional Capital Shares"), otherwise than as
provided in the foregoing Subsections (a) and (b) above or pursuant to this
Agreement, at a price per share less, or for other consideration lower, than the
Purchase Price calculated immediately prior to such issuance, or without
consideration; (d) issues any warrants, options or other rights to subscribe for
or purchase any Additional Capital Shares at a subscription or purchase price
per share less than the Purchase Price calculated immediately prior to such
issuance (e) issues any securities convertible into or exchangeable for Capital
Shares at a price per share underlying Additional Capital Shares less than the
Purchase Price calculated immediately prior to such issuance; (f) makes a
distribution of its assets or evidences of indebtedness to the holders of its
Capital Shares as a dividend in liquidation or by way of return of capital,
except (i) dividends paid or distributions made in respect of preferred stock,
(ii) as a dividend payable out of earnings or surplus legally available for
dividends under applicable law, or (iii) any distribution to such holders made
in respect of the sale of all or substantially all of the Company's assets
(other than under the circumstances provided for in the foregoing subsections
(a) through (e)); or (g) takes any action affecting the number of Outstanding
Capital Shares, other than an action described in any of the foregoing
Subsections (a) through (f) hereof, inclusive, which in the opinion of the
Company's Board of Directors, determined in good faith, would have a materially
adverse effect upon the rights of the Investor at the time of a Put or exercise
of the Warrant.

SECTION 1.43 "VALUATION PERIOD" shall mean the period of five (5) Trading Days
consisting of the relevant Closing Date and the four (4) Trading Days
immediately preceding it; provided, however, that if a Valuation Event occurs
during any Valuation Period, a new Valuation Period shall begin on the Trading
Day immediately after the occurrence of such Valuation Event and end on the
fifth Trading Day thereafter.

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SECTION 1.44 "WARRANT" shall mean the Warrant in the form of Exhibit A to the
Warrant Purchase Agreement attached hereto as Exhibit C issued pursuant to
Section 2.5 of this Agreement, entitling Investor to purchase up to 394,737
shares of Convertible Preferred Stock at the exercise price described therein.

SECTION 1.45 "WARRANT PURCHASE AGREEMENT" shall mean the Warrant Purchase
Agreement in the form of Exhibit C hereto issued in connection with Section 2.5
of this Agreement.

SECTION 1.46 "WARRANT SHARES" shall mean all shares of Convertible Preferred
Stock issued or issuable pursuant to exercise of the Warrant.

                                   ARTICLE II
                        PURCHASE AND SALE OF PUT SHARES;
              TERMINATION OF OBLIGATIONS; WARRANT; BLACKOUT SHARES

SECTION  2.1 INVESTMENTS.

         (a) PUTS. Upon the terms and conditions set forth herein (including,
without limitation, the provisions of Article VII hereof), the Company may
exercise a Put by the delivery of a Put Notice to the Investor. The number of
Put Shares that the Investor shall receive pursuant to such Put shall be
determined by dividing the Investment Amount specified in the Put Notice by the
Purchase Price on the Closing Date. The Investment Amount specified in any Put
Notice shall not exceed the Maximum Put Amount and the total of all Investment
Amounts in Put Notices submitted by the Company shall not exceed the Maximum
Commitment Amount. No Put Notice may be delivered on any Trading Day that is
within fifteen (15) Trading Days or less of the Trading Day on which a Put
Notice was last delivered.

SECTION 2.2 PUT NOTICE DATE. A Put Notice shall be deemed delivered on (a) the
Trading Day it is received by facsimile or otherwise by the Investor if such
notice is received prior to 12:00 noon New York time, or (b) the immediately
succeeding Trading Day if it is received by facsimile or otherwise after 12:00
noon New York time on a Trading Day or at any time on a day which is not a
Trading Day. No Put Notice may be deemed delivered, on a day that is not a
Trading Day.

SECTION 2.3 CLOSINGS. Following the determination of the Purchase Price on a
Closing Date for a Put, (a) the Company shall deliver to the Investor one or
more certificates representing the Put Shares, registered in the name of the
Investor, or such other evidence of the issuance of the Put Shares to the
Investor as the parties may agree is appropriate and (b) the Investor shall wire
transfer to the Company

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the Investment Amount specified in the Put Notice in immediately available funds
to the account specified by the Company, it being understood that the wire
transfer might not be actually received until the next business day. In
addition, on or prior to such Closing Date, each of the Company and the Investor
shall deliver to the other all documents, instruments and writings required to
be delivered or reasonably requested by either of them pursuant to this
Agreement in order to implement and effect the transactions contemplated herein.

SECTION 2.4 TERMINATION OF INVESTMENT OBLIGATION. This Agreement and the
Investor's obligation to purchase Put Shares hereunder shall automatically
terminate (including with respect to any Put, notice of which has been given but
the applicable Closing Date has not yet occurred) and the Investor may, at its
sole discretion, terminate this Agreement in the event that (a) there shall
occur any stop order or suspension of the effectiveness of the Registration
Statement for an aggregate of thirty (30) Trading Days during the Commitment
Period for any reason other than deferrals or suspension during a Blackout
Period in accordance with the Registration Rights Agreement as a result of
corporate developments subsequent to the Subscription Date that would require
such Registration Statement to be amended to reflect such event in order to
maintain its compliance with the disclosure requirements of the Securities Act;
or (b) the Company shall at any time fail to comply with the requirements of
Sections 6.3, 6.4, 6.5 or 6.6.

SECTION 2.5 EARLY TERMINATION: Should the Investor terminate its obligations
under this letter because it cannot perform or elects not to perform its
obligations as set forth herein for reasons unrelated to the Company or its
affiliates, which termination must be submitted to the Company in writing and
with thirty (30) days prior notice, the Investor shall return to the Company
warrants for that number of shares of the Company's Convertible Preferred Stock
in excess of the equivalent to 22.5 percent warrant coverage. (the original
warrant premium of fifteen percent (15%) times one and a half (1.5)) on the
amounts funded under this Agreement and the Loan and Security Agreement . The
amount of warrants to be retained by the Investor shall be calculated, as
follows: (a) the amount of the Loan proceeds issued to the Company under the
Loan and Security Agreement and (b) the used portions of the Equity Line of
Credit, shall be summed, which sum (c) shall be multiplied by.225 (22.5%), then
(d) divided by the Warrant Price, as defined in the Warrant subject to
amendments or adjustments thereto, to obtain that number of shares Investor is
eligible to retain under this Section 2.5. The Investor shall return to the
Company the number of excess warrant shares equal to the difference between
number of warrant shares issued upon the even date herein and the number of
warrant shares Investor is eligible to retain per the calculations above, net of
any compensation of expenses incurred in fulfillment of the Investor's
obligations and any outstanding amounts owed to the Investor by the Company

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SECTION 2.6 THE WARRANT. On the Subscription Date, the Company shall issue and
deliver the Warrant to the Investor. The Common Stock issuable upon conversion
of the Warrant Shares shall be registered for resale pursuant to the
Registration Rights Agreement.

SECTION 2.7 BLACKOUT SHARES. In the event that, (a) within five (5) Trading Days
following any Closing Date, the Company gives a Blackout Notice (as defined in
the Registration Rights Agreement) to the Investor of a Blackout Period (as
defined in the Registration Rights Agreement) in accordance with the
Registration Rights Agreement, and (b) the Bid Price on the Trading Day
immediately preceding such Blackout Period ("Old Bid Price") is greater than the
Bid Price on the first Trading Day following such Blackout Period that the
Investor may sell its Registrable Securities pursuant to an effective
Registration Statement ("New Bid Price"), then the Company shall issue to the
Investor the number of additional shares of Registrable Securities (the
"Blackout Shares") equal to the difference between (X) the product of the number
of Registrable Securities held by Investor immediately prior to the Blackout
Period multiplied by the Old Bid Price, divided by the New Bid Price, and (Y)
the number of Registrable Securities held by Investor immediately prior to the
Blackout Period.

SECTION 2.8 LIQUIDATED DAMAGES. The parties hereto acknowledge
and agree that requirement to issue Blackout Shares under Section 2.6 above
shall constitute liquidated damages and not penalties. The parties further
acknowledge that (a) the amount of loss or damages likely to be incurred is
incapable or is difficult to precisely estimate, (b) the amounts specified in
such section bear a reasonable proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred by the Investor in
connection with the failure by the Company to make Puts described in this
Agreement or in connection with a Blackout Period, and (c) the parties are
sophisticated business parties and have been represented by sophisticated and
able legal and financial counsel and negotiated this Agreement at arm's length.

                                   ARTICLE III
                   REPRESENTATIONS AND WARRANTIES OF INVESTOR

         The Investor represents and warrants to the Company that:

SECTION 3.1 INTENT. The Investor is entering into this Agreement for its own
account and the Investor has no present arrangement (whether or not legally
binding) at any time to sell any of the Company's securities to be acquired
hereunder to or through any person or entity; provided, however, that by making
the representations herein, the Investor does not agree to hold those specific
securities for any minimum or other specific term and reserves the right to
dispose of them at any time in accordance with federal and

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state securities laws applicable to such disposition.

SECTION 3.2 ACCREDITED INVESTOR. The Investor is an accredited investor (as
described in Rule 501 of Regulation D) and Investor has such experience in
business and financial matters that make it capable of evaluating the merits and
risks of an investment in securities to be issued hereunder. The Investor
acknowledges that an investment in the securities to be issued hereunder is
speculative and involves a high degree of risk.

SECTION 3.3 AUTHORITY. Each of this Agreement and the Registration Rights
Agreement was validly executed and delivered by the Investor and each is a
valid and binding agreement of the Investor enforceable against it in
accordance with its terms, subject to applicable bankruptcy, insolvency, or
similar laws relating to, or affecting generally the enforcement of,
creditors' rights and remedies or by other equitable principles of general
application.

SECTION 3.4 NOT AN AFFILIATE. The Investor is not an officer, director or
"affiliate" (as that term is defined in Rule 405 of the Securities Act) of the
Company.

SECTION 3.5 ORGANIZATION AND STANDING. Investor is duly organized, validly
existing, and in good standing under the laws of the state of its
incorporation.

SECTION 3.6 DISCLOSURE; ACCESS TO INFORMATION. Investor has received all
documents, records, books and other information pertaining to Investor's
investment in the Company that have been requested by Investor. The Investor has
reviewed or received copies of the SEC Documents.

SECTION 3.7 MANNER OF SALE. At no time was Investor presented with or solicited
by or through any leaflet, public promotional meeting, television advertisement
or any other form of general solicitation or advertising.

                                   ARTICLE IV
                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Investor that:

SECTION 4.1 ORGANIZATION OF THE COMPANY. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.

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The Company is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, other than
those in which the failure so to qualify would not have a Material Adverse
Effect.

SECTION 4.2 AUTHORITY. (a) The Company has the requisite corporate power and
authority to enter into and perform its obligations under this Agreement, the
Registration Rights Agreement and the Warrant and to issue the Put Shares, the
Dividend shares, the Warrant, the Warrant Shares and the Blackout Shares; (b)
the execution and delivery of this Agreement and the Registration Rights
Agreement, and the execution, issuance and delivery of the Warrant by the
Company and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action and no further
consent or authorization of the Company or its Board of Directors, other than
approval of its stockholders, is required; and (c) each of this Agreement and
the Registration Rights Agreement has been duly executed and delivered and the
Warrant has been duly executed, issued and delivered by the Company and
constitute valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, or similar laws relating
to, or affecting generally the enforcement of, creditors' rights and remedies or
by other equitable principles of general application.

SECTION 4.3 CAPITALIZATION. As of November 17, 2000, the authorized capital
stock of the Company consisted of 50,000,000 shares of Common Stock, of which
31,874,460 shares were issued and outstanding. Except as set forth in this
Section 4.3 hereof, there are no options, warrants, or rights to subscribe to,
securities, rights or obligations convertible into or exchangeable for or giving
any right to subscribe for any shares of capital stock of the Company, with the
exception of shares reserved for issuance pursuant to completion of the
Reichmann Transaction. All of the outstanding shares of Capital Stock of the
Company have been duly and validly authorized and issued and are fully paid and
nonassessable.

SECTION 4.4 COMMON STOCK. The Company has registered its Common Stock pursuant
to Section 12(b) or 12(g) of the Exchange Act and is in full compliance with all
reporting requirements of the Exchange Act, and the Company has maintained all
requirements for the continued listing or quotation of its Common Stock, and
such Common Stock is currently quoted on the Principal Market. As of the date
hereof, the Principal Market is the Over The Counter Bulletin Board Market ("OTC
BB").

SECTION 4.5 SEC DOCUMENTS. The Company has delivered or made available to the
Investor true and complete copies of the SEC Documents (including, without
limitation, proxy information and solicitation materials). The Company has not
provided to the Investor any information that, according to applicable

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law, rule or regulation, should have been disclosed publicly prior to the date
hereof by the Company, but which has not been so disclosed. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
other federal, state and local laws, rules and regulations applicable to such
SEC Documents, and none of the SEC Documents, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents complied, when filed, as
to form and substance in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC or other
applicable rules and regulations with respect thereto. Such financial statements
were prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).

SECTION 4.6 EXEMPTION FROM REGISTRATION; VALID ISSUANCES. The sale and issuance
of the Warrant, the Warrant Shares, the Dividend Shares, the Put Shares and any
Blackout Shares in accordance with the terms and on the basis of the
representations and warranties set forth in this Agreement, may and shall be
properly issued pursuant to Rule 4(2), Regulation D and/or any applicable state
law. When issued and paid for as herein provided, the Put Shares, the Warrant
Shares, the Dividend Shares and any Blackout Shares shall be duly and validly
issued, fully paid, and nonassessable. Neither the sales of the Put Shares, the
Warrant, the Warrant Shares, the Dividend Shares or any Blackout Shares pursuant
to, nor the Company's performance of its obligations under, this Agreement, the
Registration Rights Agreement, or the Warrant shall (i) be subject to or result
in the creation or imposition of any liens, charges, claims or other
encumbrances upon the Put Shares, the Warrant Shares, the Dividend Shares, any
Blackout Shares or any of the assets of the Company, or (ii) be subject to or
entitle the holders of Outstanding Capital Shares or preferred shares to
preemptive or other rights to subscribe to or acquire the Put Shares, the
Warrant Shares, the Dividend Shares, any Blackout Shares or Registrable
Securities. The Put Shares, the Warrant Shares the Dividend Shares and any
Blackout Shares shall not subject the Investor to personal liability by reason
of the ownership thereof.

SECTION 4.7 NO GENERAL SOLICITATION OR ADVERTISING IN REGARD TO THIS
TRANSACTION. Neither the Company nor any of its affiliates nor any distributor
or any person acting on its or their behalf (i) has conducted or will conduct
any general solicitation (as that term is used in Rule 502(c) of Regulation D)
or general advertising with respect to any of the Put Shares, the Warrant, the
Warrant Shares, the Dividend

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Shares or any Blackout Shares, or (ii) made any offers or sales of any security
or solicited any offers to buy any security under any circumstances that would
require registration of any of them under the Securities Act.

SECTION 4.8 CORPORATE DOCUMENTS. The Company has furnished or made available to
the Investor true and correct copies of the Company's Certificate of
Incorporation, as in effect on the date hereof (the "Certificate"), and the
Company's By-Laws, as in effect on the date hereof (the "By-Laws").

SECTION 4.9 NO CONFLICTS. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby, including without limitation the issuance of the Put
Shares, the Warrant, the Warrant Shares, the Dividend Shares and the Blackout
Shares do not and will not (i) result in a violation of the Certificate or
By-Laws or (ii) conflict with, or constitute a material default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
any material agreement, indenture, instrument or any "lock-up" or similar
provision of any underwriting or similar agreement to which the Company is a
party, or (iii) result in a violation of any federal, state, local or foreign
law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a Material
Adverse Effect) nor is the Company otherwise in violation of, conflict with or
in default under any of the foregoing (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a Material Adverse Effect). The
business of the Company is not being conducted in violation of any law,
ordinance or regulation of any governmental entity, except for possible
violations that either singly or in the aggregate do not and will not have a
Material Adverse Effect. The Company is not required under federal, state or
local law, rule or regulation to obtain any consent, authorization or order of,
or make any filing or registration with, any court or governmental agency in
order for it to execute, deliver or perform any of its obligations under this
Agreement or issue and sell the Put Shares, the Dividend Shares, any Blackout
Shares or the Warrant Shares in accordance with the terms hereof (other than any
SEC, NASD or state securities filings that may be required to be made by the
Company, any registration statement that may be filed pursuant hereto, and any
shareholder approval required by the rules applicable to companies whose common
stock trades on the Principal Exchange); provided that, for purposes of the
representation made in this sentence, the Company is assuming and relying upon
the accuracy of the relevant representations and agreements of the Investor
herein.

                                 Page 13 of 30
<PAGE>

SECTION 4.10 NO MATERIAL ADVERSE CHANGE. Since July 31, 2000, no event has
occurred that would have a Material Adverse Effect, except as disclosed in the
SEC Documents.

SECTION 4.11 NO UNDISCLOSED LIABILITIES. The Company has no
liabilities or obligations that are material, individually or in the aggregate,
and that are not disclosed in the SEC Documents or otherwise publicly announced,
other than those incurred in the ordinary course of the Company's businesses
since July 31, 2000 and which, individually or in the aggregate, do not or would
not have a Material Adverse Effect.

SECTION 4.12 NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. Since July 31, 2000, no
event or circumstance has occurred or exists with respect to the Company or its
businesses, properties, operations or financial condition, that, under
applicable law, rule or regulation, requires public disclosure or announcement
prior to the date hereof by the Company but which has not been so publicly
announced or disclosed in the SEC Documents.

SECTION 4.13 LITIGATION AND OTHER PROCEEDINGS. Except as may be set forth in the
SEC Documents, there are no lawsuits or proceedings pending or to the best
knowledge of the Company threatened, against the Company, nor has the Company
received any written or oral notice of any such action, suit, proceeding or
investigation, which might have a Material Adverse Effect. Except as set forth
in the SEC Documents, no judgment, order, writ, injunction or decree or award
has been issued by or, so far as is known by the Company, requested of any
court, arbitrator or governmental agency which might result in a Material
Adverse Effect.

SECTION 4.12 NO MISLEADING OR UNTRUE COMMUNICATION. The Company has not made, at
any time, any oral communication in connection with the offer or sale of
securities hereunder which contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements, in
the light of the circumstances under which they were made, not misleading.

                                    ARTICLE V
                            COVENANTS OF THE INVESTOR

SECTION 5.1 COMPLIANCE WITH LAW. The Investor's trading activities with respect
to shares of the Company's Common Stock will be in compliance with all
applicable state and federal securities laws, rules and regulations and the
rules and regulations of the Principal Market.

                                 Page 14 of 30
<PAGE>

SECTION 5.2 LIMITATION ON SHORT SALES. The Investor and its affiliates shall not
engage in short sales of the Company's Common Stock; provided, however, that the
Investor may enter into any short sale or other hedging or similar arrangement
it deems appropriate with respect to Put Shares after it receives a Put Notice
with respect to such Put Shares so long as such sales or arrangements do not
involve more than the number of such Put Shares (as determined by the Investor
as of the date of such Put Notice).

                                   ARTICLE VI
                            COVENANTS OF THE COMPANY

SECTION 6.1 REGISTRATION RIGHTS. The Company shall use its best efforts to cause
the Registration Rights Agreement to remain in full force and effect and the
Company shall comply in all respects with the terms thereof.

SECTION 6.2 RESERVATION OF COMMON STOCK. As of the date hereof, the Company has
available and the Company shall reserve and keep available at all times, free of
preemptive rights, shares of Common Stock for the purpose of enabling the
Company to satisfy any obligation to issue Common Stock upon conversion of the
Put Shares, the Warrant Shares, the Dividend Shares and the Blackout Shares;
such amount of shares of Common Stock to be reserved shall be calculated based
upon the minimum Purchase Price for the Put Shares under the terms and
conditions of this Agreement and the exercise price of the Warrant and a good
faith estimate by the Company in consultation with the investor of the number of
Blackout Shares that will need to be issued. The number of shares so reserved
from time to time, as theretofore increased or reduced as hereinafter provided,
may be reduced by the number of shares actually delivered hereunder.

SECTION 6.3 LISTING OF COMMON STOCK. The Company shall use its best efforts to
maintain the listing of the Common Stock on a Principal Market or other exchange
acceptable to the Investor. The Company shall use its best efforts to continue
the listing and trading of its Common Stock on the Principal Market (including,
without limitation, maintaining sufficient net tangible assets) and will comply
in all respects with the Company's reporting, filing and other obligations under
the bylaws or rules of the OTC BB and the Principal Market.

SECTION 6.4 EXCHANGE ACT REGISTRATION. The Company shall cause its Common Stock
to continue to be registered under Section 12(g) or 12(b) of the Exchange Act,
will use its best efforts to comply in all respects with its reporting and
filing obligations under said Act, and will not take any action or file any
document (whether or not permitted by said Act or the rules thereunder) to
terminate or suspend such

                                 Page 15 of 30
<PAGE>

registration or to terminate or suspend its reporting and filing obligations
under said Act.

SECTION 6.5 LEGENDS. The certificates evidencing the Put Shares, the Warrant
Shares, the Dividend Shares and the Blackout Shares shall be free of legends,
except as provided for in Article VIII.

SECTION 6.6 CORPORATE EXISTENCE. The Company shall take all steps necessary to
preserve and continue the corporate existence of the Company.

SECTION 6.7 ADDITIONAL SEC DOCUMENTS. The Company shall deliver to the Investor,
as and when the originals thereof are submitted to the SEC for filing, copies of
all SEC Documents so furnished or submitted to the SEC.

SECTION 6.8 NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT
TO MAKE A PUT. The Company shall immediately notify the Investor upon the
occurrence of any of the following events in respect of a registration statement
or related prospectus in respect of an offering of Registrable Securities: (a)
receipt by the Company of any request for additional information by the SEC or
any other federal or state governmental authority during the period of
effectiveness of the registration statement or for amendments or supplements to
the registration statement or related prospectus; (b) receipt by the Company of
notice of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose; (c) receipt of
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose; (d) the happening of any event that makes any statement made in such
Registration Statement or related prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the registration statement, related
prospectus or documents so that, in the case of the Registration Statement, it
will not contain 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 not misleading, and that in the case of the related prospectus, it will
not contain 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 the light of the circumstances under which they were made, not
misleading; and (e) the Company's reasonable determination that a post-effective
amendment to the registration statement would be appropriate, and the Company
shall promptly make available to the Investor any such supplement or amendment
to the related prospectus. The Company shall not deliver to the Investor any Put
Notice during the continuation of any of the foregoing events.

                                 Page 16 of 30
<PAGE>

SECTION 6.9 EXPECTATIONS REGARDING PUT NOTICES. Within ten (10) days after the
commencement of each calendar quarter occurring subsequent to the commencement
of the Commitment Period, the Company undertakes to notify the Investor as to
its reasonable expectations as to the dollar amount it intends to raise during
such calendar quarter, if any, through the issuance of Put Notices. Such
notification shall constitute only the Company's good faith estimate with
respect to such calendar quarter and shall in no way obligate the Company to
raise such amount during such calendar quarter or otherwise limit its ability to
deliver Put Notices during such calendar quarter. The failure by the Company to
comply with this provision can be cured by the Company's notifying the Investor
at any time as to its reasonable expectations with respect to the current
calendar quarter.

SECTION 6.10 CONSOLIDATION; MERGER. The Company shall not, at any time after the
date hereof, 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 unless the resulting successor or acquiring entity (if not the Company)
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 and the Warrant.

SECTION 6.11 ISSUANCE OF PUT SHARES, WARRANT SHARES, DIVIDEND SHARES AND
BLACKOUT SHARES. The sale of the Put Shares, the issuance of the Warrant Shares
pursuant to exercise of the Warrant and the issuance of any Dividend Shares or
Blackout Shares shall be made in accordance with the provisions and requirements
of Section 4(2), Regulation D and/or any applicable state law. Issuance of the
Warrant Shares pursuant to exercise of the Warrant through a cashless exercise
shall be made in accordance with the provisions and requirements of Section
3(a)(9), Section 4(2), Regulation D and/or any applicable state law.

SECTION 6.12 LEGAL OPINION ON SUBSCRIPTION DATE. The Company's general or
outside counsel shall deliver to the Investor on the Subscription Date an
opinion in the form of Exhibit D.

SECTION 6.13 FILING OF CERTIFICATE OF DESIGNATION. The Company shall have filed
the Certificate of Designation with the Secretary of State of the State of
Delaware and such certificate shall have been accepted and approved.

SECTION 6.14 NO OTHER EQUITY LINES. While this Agreement is in effect, the
Company shall refrain from entering into any other agreements, arrangements or
understandings granting to the Company the right to put shares of its securities
to one or more investors through private placements except the Reichmann
Transaction.

                                 Page 17 of 30
<PAGE>

SECTION 6.15 RETENTION OF FINANCIAL SERVICES OF CHASE H&Q. In the event the
Company desires to retain Chase H&Q or any of its affiliates or wholly-owned
subsidiaries (CH&Q) for additional financial services, and to the extent the
Company's retention of H&Q would potentially restrict the Investor's resale of
the Put Shares or Common Stock issuable upon conversion thereof, the retention
of CH&Q must be approved by the Investor. If CH&Q is retained by the Company as
an underwriter in a follow-on offering of the Company's securities, and as a
result, the Investor is required to modify the terms of the Warrant and other
compensation received by the Investor from the Company, to comply with the
NASD's prohibitions on excess underwriter compensation, the Company shall
compensate the Investor for any economic loss suffered by the Investor, to the
extent that such compensation would not result in excess underwriter's
compensation in breach of the rules and regulations of the NASD or other
applicable law.

                                   ARTICLE VII
                      CONDITIONS TO DELIVERY OF PUT NOTICES
                            AND CONDITIONS TO CLOSING

SECTION 7.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE AND
SELL PUT SHARES. The obligation hereunder of the Company to issue and sell the
Put Shares to the Investor incident to each Closing is subject to the
satisfaction, at or before each such Closing, of each of the conditions set
forth below.

                  (a) ACCURACY OF THE INVESTOR'S REPRESENTATION AND WARRANTIES.
         The representations and warranties of the Investor shall be true and
         correct in all material respects as of the date of this Agreement and
         as of the date of each such Closing as though made at each such time.

                  (b) PERFORMANCE BY THE INVESTOR. The Investor shall have
         performed, satisfied and complied in all material respects with all
         covenants, agreements and conditions required by this Agreement to be
         performed, satisfied or complied with by the Investor at or prior to
         such Closing.

                  (c) NO INJUNCTION. No statute, rule, regulation, executive
         order, decree, ruling or injunction shall have been enacted, entered,
         promulgated or adopted by any court or governmental authority of
         competent jurisdiction that prohibits the transactions contemplated by
         this Agreement, and no actions, suits or proceedings shall be in
         progress, pending or threatened by any Person, that seek to enjoin or
         prohibit the transactions contemplated by this Agreement. For purposes
         of this paragraph (c), no proceeding shall be deemed pending or
         threatened unless

                                 Page 18 of 30
<PAGE>

         one of the parties has received written or oral notification thereof
         prior to the applicable Closing Date.

                  (d) OTHER. The Company shall have received and been reasonably
         satisfied with such other certificates and documents as shall have been
         reasonably requested by it in order to confirm the Investor's
         satisfaction of the conditions set forth in this Section 7.1

SECTION 7.2 CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER A PUT
NOTICE AND THE OBLIGATION OF THE INVESTOR TO PURCHASE PUT SHARES. The right of
the Company to deliver a Put Notice and the obligation of the Investor hereunder
to acquire and pay for the Put Shares incident to a Closing is subject to the
satisfaction, on (i) the applicable Put Date and (ii) the applicable Closing
Date (each a "Condition Satisfaction Date"), of each of the following
conditions:

                  (a) REGISTRATION OF THE REGISTRABLE SECURITIES WITH THE SEC.
         As set forth in the Registration Rights Agreement, the Company shall
         have previously filed with the SEC a Registration Statement with
         respect to the resale of the Registrable Securities by the Investor
         that shall have been declared effective by the SEC prior to the first
         Put Date.

                  (b) EFFECTIVE REGISTRATION STATEMENT; NOT MISLEADING. As set
         forth in the Registration Rights Agreement, the Registration Statement
         shall have previously become effective and shall remain effective on
         each Condition Satisfaction Date and (i) neither the Company nor the
         Investor shall have received notice that the SEC has issued or intends
         to issue a stop order with respect to the Registration Statement or
         that the SEC otherwise has suspended or withdrawn the effectiveness of
         the Registration Statement, either temporarily or permanently, or
         intends or has threatened to do so (unless the SEC's concerns have been
         addressed and the Investor is reasonably satisfied that the SEC no
         longer is considering or intends to take such action), (ii) no other
         suspension of the use or withdrawal of the effectiveness of the
         Registration Statement or related prospectus shall exist, and (iii) the
         Investor shall not have advised the Company that, in its reasonable
         opinion, the Registration Statement contains an untrue statement of a
         material fact or omits a material fact required to be stated in the
         Registration Statement or necessary to make the statements contained
         therein, in light of the circumstances in which they were made, not
         misleading, and such allegedly untrue statement or omission shall not
         have been addressed to the reasonable satisfaction of the Investor.

                  (c) ACCURACY OF THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
         The representations and warranties of the Company shall be true and
         correct in all material

                                 Page 19 of 30
<PAGE>

         respects as of each Condition Satisfaction Date as though made at each
         such time (except for representations and warranties specifically made
         as of a particular date).

                  (d) PERFORMANCE BY THE COMPANY. The Company shall have
         performed, satisfied and complied in all respects with all covenants,
         agreements and conditions required by this Agreement, the Loan and
         Security Agreement, the Registration Rights Agreement, the Warrant
         Purchase Agreement, the Warrant and other documents related to thereto
         to be performed, satisfied or complied with by the Company at or prior
         to each Condition Satisfaction Date.

                  (e) NO INJUNCTION. No statute, rule, regulation, executive
         order, decree, ruling or injunction shall have been enacted, entered,
         promulgated or adopted by any court or governmental authority of
         competent jurisdiction that prohibits the transactions contemplated by
         this Agreement or otherwise has a Material Adverse Effect, and no
         actions, suits or proceedings shall be in progress, pending or
         threatened by any Person, that seek to enjoin or prohibit the
         transactions contemplated by this Agreement or otherwise could
         reasonably be expected to have a Material Adverse Effect. For purposes
         of this paragraph (e), no proceeding shall be deemed pending or
         threatened unless one of the parties has received written or oral
         notification thereof prior to the applicable Closing Date.

                  (f) NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK.
         The trading of the Common Stock shall not have been suspended by the
         SEC, the Principal Market or the NASD and the Common Stock shall have
         been approved for listing or quotation on and shall not have been
         delisted from the Principal Market, with the exception in the event
         that the Company changes the Principal Market upon which it is listed
         and the Principal Market is acceptable to the Company's Shareholders,
         Board of Directors and the Investor. The issuance of Put Shares with
         respect to the applicable Closing, if any, shall not violate the
         shareholder approval requirements of the Principal Market.

                  (g) LEGAL OPINION. The Company shall have caused to be
         delivered to the Investor, within five (5) Trading Days of the
         Effective Date, an opinion of the Company's independent or general
         counsel in the form of Exhibit E hereto, addressed to the Investor.

                  (h) TEN PERCENT LIMITATION. On each Closing Date, the number
         of Put Shares then to be purchased by the Investor shall not exceed the
         number of such shares that, when aggregated with all other shares of
         Registrable Securities then owned by the Investor beneficially or
         deemed beneficially owned by the Investor, would result in the Investor
         owning no more than 9.9% of all of such Common Stock as would be
         outstanding on such Closing Date, as determined

                                 Page 20 of 30

<PAGE>

         in accordance with Section 16 of the Exchange Act and the regulations
         promulgated thereunder. For purposes of this Section, in the event that
         the amount of Common Stock outstanding as determined in accordance with
         Section 16 of the Exchange Act and the regulations promulgated
         thereunder is greater on a Closing Date than on the date upon which the
         Put Notice associated with such Closing Date is given, the amount of
         Common Stock outstanding on such Closing Date shall govern for purposes
         of determining whether the Investor, when aggregating all purchases of
         Common Stock made pursuant to this Agreement and, if any, Warrant
         Shares, Dividend Shares and Blackout Shares, would own more than 9.9%
         of the Common Stock following such Closing Date.

                  (i) NO KNOWLEDGE. The Company shall have no knowledge of any
         event more likely than not to have the effect of causing such
         Registration Statement to be suspended or otherwise ineffective (which
         event is more likely than not to occur within the fifteen Trading Days
         following the Trading Day on which such Notice is deemed delivered).

                  (j) SHAREHOLDER VOTE. The issuance of Put Shares with respect
         to the applicable Closing, if any, shall not violate the shareholder
         approval requirements of the Principal Market.

                  (k) OTHER. On each Condition Satisfaction Date, the
         Investor shall have received and been reasonably satisfied with such
         other certificates and documents as shall have been reasonably
         requested by the Investor in order for the Investor to confirm the
         Company's satisfaction of the conditions set forth in this Section
         7.2., including, without limitation, a certificate in substantially
         the form and substance of Exhibit F hereto, executed in either case
         by an executive officer of the Company and to the effect that all
         the conditions to such Closing shall have been satisfied as at the
         date of each such certificate.

SECTION 7.3 DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION. The
Company shall make available for inspection and review by the Investor, advisors
to and representatives of the Investor, any 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 or advisor 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 and advisors and
their respective accountants and attorneys to conduct initial and

                                 Page 21 of 30
<PAGE>

ongoing due diligence with respect to the Company and the accuracy of the
Registration Statement.

                                  ARTICLE VIII
                                     LEGENDS

SECTION 8.1 LEGENDS. Each of the Warrant and, unless otherwise provided below,
each certificate representing Registrable Securities will bear the following
legend (the "Legend"):

         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. THE HOLDER OF THIS
CERTIFICATE IS THE BENEFICIARY OF CERTAIN OBLIGATIONS OF THE COMPANY SET FORTH
IN AN EQUITY LINE OF CREDIT AGREEMENT BETWEEN INTERACTIVE TELESIS INC. AND
HAMBRECHT & QUIST GUARANTY FINANCE, LLC DATED AS OF NOVEMBER __, 2000. A COPY OF
THE PORTION OF THE AFORESAID AGREEMENT EVIDENCING SUCH OBLIGATIONS MAY BE
OBTAINED FROM THE COMPANY'S EXECUTIVE OFFICES.

         As soon as practicable after the execution and delivery hereof, but in
any event within five (5) Trading Days hereafter, the Company shall issue to the
transfer agent for its Common Stock (and to any substitute or replacement
transfer agent for its Common Stock upon the Company's appointment of any such
substitute or replacement transfer agent) instructions in substantially the form
of Exhibit G hereto, with a copy to the Investor. Such instructions shall be
irrevocable by the Company from and after the date hereof or from and after the
issuance thereof to any such substitute or replacement transfer agent, as the
case may be, except as otherwise expressly provided in the Registration Rights
Agreement. It is the intent and purpose of such instructions, as provided
therein, to require the transfer agent for the Common Stock from time to time
upon transfer of Registrable Securities by the Investor to issue certificates
evidencing such Registrable Securities free of the Legend during the following
periods and under the following circumstances and without consultation by the
transfer agent with the Company or its counsel and without the need for any
further advice or instruction or documentation to the transfer agent by or from
the Company or its counsel or the Investor:

                                 Page 22 of 30
<PAGE>

                  (a) At any time after the Effective Date, upon surrender of
         one or more certificates evidencing the Put Shares that bear the
         Legend, to the extent accompanied by a notice requesting the issuance
         of new certificates free of the Legend to replace those surrendered;
         provided that (i) the Registration Statement shall then be effective
         and (ii) if reasonably requested by the transfer agent the Investor
         confirms to the transfer agent that the Investor has complied with the
         prospectus delivery requirement.

                  (b) At any time upon any surrender of one or more certificates
         evidencing Registrable Securities that bear the Legend, to the extent
         accompanied by a notice requesting the issuance of new certificates
         free of the Legend to replace those surrendered and containing
         representations that (i) the Investor is permitted to dispose of such
         Registrable Securities without limitation as to amount or manner of
         sale pursuant to Rule 144(k) under the Securities Act or (ii) the
         Investor has sold, pledged or otherwise transferred or agreed to sell,
         pledge or otherwise transfer such Registrable Securities in a manner
         other than pursuant to an effective registration statement, to a
         transferee who shall upon such transfer be entitled to freely tradable
         securities.

SECTION 8.2 NO OTHER LEGEND OR STOCK TRANSFER RESTRICTIONS. No legend other than
the one specified in Section 8.1 has been or shall be placed on the share
certificates representing the Put Shares and no instructions or "stop transfers
orders," so called, "stock transfer restrictions," or other restrictions have
been or shall be given to the Company's transfer agent with respect thereto
other than as expressly set forth in this Article VIII.

SECTION 8.3 INVESTOR'S COMPLIANCE. Nothing in this Article VIII shall affect in
any way the Investor's obligations under any agreement to comply with all
applicable securities laws upon resale of the securities issuable hereunder.

                                   ARTICLE IX
                                 INDEMNIFICATION

SECTION 9.1 INDEMNIFICATION. The Company agrees to indemnify and hold harmless
the Investor, its partners, affiliates, officers, directors, employees, and duly
authorized agents, and each Person or entity, if any, who controls the Investor
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, together with the Controlling Persons (as defined in the
Registration Rights Agreement) from and against any Damages, joint or several,
and any action in respect thereof to which the Investor, its partners,
affiliates, officers, directors, employees, and duly authorized agents, and any

                                 Page 23 of 30
<PAGE>

such Controlling Person becomes subject to, resulting from, arising out of or
relating to any misrepresentation, breach of warranty or nonfulfillment of or
failure to perform any covenant or agreement on the part of Company contained in
this Agreement, as such Damages are incurred, except to the extent that such
damages result solely from the Investor's failure to perform any covenant or
agreement contained in this Agreement, provided, however, that the Company shall
not be liable in any such case to the extent that any such Damages arise out of
or are based upon information furnished to the Company by or on behalf of the
Investor in writing.

SECTION 9.2 METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All claims for
indemnification by any Indemnified Party (as defined below) under Section 9.1
shall be asserted and resolved as follows:

                  (a) In the event any claim or demand in respect of which any
         person claiming indemnification under any provision of Section 9.1 (an
         "Indemnified Party") might seek indemnity under Section 9.1 is asserted
         against or sought to be collected from such Indemnified Party by a
         person other than the Company, the Investor or any affiliate of the
         Company or (a "Third Party Claim"), the Indemnified Party shall deliver
         a written notification, enclosing a copy of all papers served, if any,
         and specifying the nature of and basis for such Third Party Claim and
         for the Indemnified Party's claim for indemnification against any
         person (the "Indemnifying Party"), together with the amount or, if not
         then reasonably ascertainable, the estimated amount, determined in good
         faith, of such Third Party Claim (a "Claim Notice") with reasonable
         promptness to the Indemnifying Party. If the Indemnified Party fails to
         provide the Claim Notice with reasonable promptness after the
         Indemnified Party receives notice of such Third Party Claim, the
         Indemnifying Party shall not be obligated to indemnify the Indemnified
         Party with respect to such Third Party Claim to the extent that the
         Indemnifying Party's ability to defend has been materially prejudiced
         by such failure of the Indemnified Party. The Indemnifying Party shall
         notify the Indemnified Party as soon as practicable within the period
         ending fifteen (15) calendar days following receipt by the Indemnifying
         Party of either a Claim Notice or an Indemnity Notice (as defined
         below) (the "Dispute Period") whether the Indemnifying Party disputes
         its liability or the amount of its liability to the Indemnified Party
         under Section 9.1 and whether the Indemnifying Party desires, at its
         sole cost and expense, to defend the Indemnified Party against such
         Third Party Claim.

                           (i) If the Indemnifying Party notifies the
                  Indemnified Party within the Dispute Period that the
                  Indemnifying Party desires to defend the Indemnified Party
                  with respect to the Third Party Claim pursuant to this Section
                  9.2(a), then the Indemnifying Party shall have the right to
                  defend, with counsel reasonably satisfactory to the
                  Indemnified Party, at the sole cost and expense of the
                  Indemnifying Party, such Third

                                 Page 24 of 30
<PAGE>

                  Party Claim by all appropriate proceedings, which proceedings
                  shall be vigorously and diligently prosecuted by the
                  Indemnifying Party to a final conclusion or will be settled at
                  the discretion of the Indemnifying Party (but only with the
                  consent of the Indemnified Party in the case of any settlement
                  that provides for any relief other than the payment of
                  monetary damages or that provides for the payment of monetary
                  damages as to which the Indemnified Party shall not be
                  indemnified in full pursuant to Section 9.1). The Indemnifying
                  Party shall have full control of such defense and proceedings,
                  including any compromise or settlement thereof; provided,
                  however, that the Indemnified Party may at any time prior to
                  the Indemnifying Party's delivery of the notice referred to in
                  the first sentence of this clause (i), file any motion, answer
                  or other pleadings or take any other action that the
                  Indemnified Party reasonably believes to be necessary or
                  appropriate to protect its interests; and provided further,
                  that if requested by the Indemnifying Party, the Indemnified
                  Party will, at the sole cost and expense of the Indemnifying
                  Party, provide reasonable cooperation to the Indemnifying
                  Party in contesting any Third Party Claim that the
                  Indemnifying Party elects to contest. The Indemnified Party
                  may participate in, but not control, any defense or settlement
                  of any Third Party Claim controlled by the Indemnifying Party
                  pursuant to this clause (i), and shall bear its own costs and
                  expenses with respect to such participation unless, in the
                  reasonable judgement of counsel to the Indemnified Party the
                  Indemnified Party shall have defenses to the Third Party Claim
                  in addition to or different from the defenses available to the
                  Indemnifying Party, in which case the costs and expenses of
                  the Indemnified Party's participation shall be paid by the
                  Indemnifying Party. Notwithstanding the foregoing, the
                  Indemnified Party may take over the control of the defense or
                  settlement of a Third Party Claim at any time if it
                  irrevocably waives its right to indemnity under Section 9.1
                  with respect to such Third Party Claim.

                           (ii) If the Indemnifying Party fails to notify the
                  Indemnified Party within the Dispute Period that the
                  Indemnifying Party desires to defend the Third Party Claim
                  pursuant to Section 9.2(a), or if the Indemnifying Party gives
                  such notice but fails to prosecute vigorously and diligently
                  or settle the Third Party Claim, then the Indemnified Party
                  shall have the right to defend, at the sole cost and expense
                  of the Indemnifying Party, the Third Party Claim by all
                  appropriate proceedings, which proceedings shall be prosecuted
                  by the Indemnified Party in a reasonable manner and in good
                  faith or will be settled at the discretion of the Indemnified
                  Party (with the consent of the Indemnifying Party, which
                  consent will not be unreasonably withheld). The Indemnified
                  Party will have full control of such defense and proceedings,
                  including any compromise or settlement thereof; provided,
                  however, that if requested by the Indemnified Party, the
                  Indemnifying Party will, at the sole cost and expense of the
                  Indemnifying Party, provide reasonable

                                 Page 25 of 30
<PAGE>

                  cooperation to the Indemnified Party and its counsel in
                  contesting any Third Party Claim which the Indemnified Party
                  is contesting. Notwithstanding the foregoing provisions of
                  this clause (ii), if the Indemnifying Party has notified the
                  Indemnified Party within the Dispute Period that the
                  Indemnifying Party disputes its liability or the amount of its
                  liability hereunder to the Indemnified Party with respect to
                  such Third Party Claim and if such dispute is resolved in
                  favor of the Indemnifying Party in the manner provided in
                  clause (iii) below, the Indemnifying Party will not be
                  required to bear the costs and expenses of the Indemnified
                  Party's defense pursuant to this clause (ii) or of the
                  Indemnifying Party's participation therein at the Indemnified
                  Party's request, and the Indemnified Party shall reimburse the
                  Indemnifying Party in full for all reasonable costs and
                  expenses incurred by the Indemnifying Party in connection with
                  such litigation. The Indemnifying Party may participate in,
                  but not control, any defense or settlement controlled by the
                  Indemnified Party pursuant to this clause (ii), and the
                  Indemnifying Party shall bear its own costs and expenses with
                  respect to such participation.

                           (iii) If the Indemnifying Party notifies the
                  Indemnified Party that it does not dispute its liability or
                  the amount of its liability to the Indemnified Party with
                  respect to the Third Party Claim under Section 9.1 or fails to
                  notify the Indemnified Party within the Dispute Period whether
                  the Indemnifying Party disputes its liability or the amount of
                  its liability to the Indemnified Party with respect to such
                  Third Party Claim, the loss in the amount specified in the
                  Claim Notice shall be conclusively deemed a liability of the
                  Indemnifying Party under Section 9.1 and the Indemnifying
                  Party shall pay the amount of such Loss to the Indemnified
                  Party on demand. If the Indemnifying Party has timely disputed
                  its liability or the amount of its liability with respect to
                  such claim, the Indemnifying Party and the Indemnified Party
                  shall proceed in good faith to negotiate a resolution of such
                  dispute, and if not resolved through negotiations within the
                  Resolution Period, such dispute shall be resolved by
                  arbitration in accordance with paragraph (c) of this Section
                  9.2.

                  (b) In the event any Indemnified Party should have a claim
         under Section 9.1 against the Indemnifying Party that does not involve
         a Third Party Claim, the Indemnified Party shall deliver to the
         Indemnifying Party a written notification of a claim for indemnity
         under Section 9.1 specifying the nature of and basis for such claim,
         together with the amount or, if not then reasonably ascertainable, the
         estimated amount, determined in good faith, of such claim (an
         "Indemnity Notice") with reasonable promptness to the Indemnifying
         Party. The failure by any Indemnified Party to give the Indemnity
         Notice shall not impair such party's rights hereunder except to the
         extent that the Indemnifying Party demonstrates that it has been
         materially

                                 Page 26 of 30
<PAGE>

         prejudiced thereby. If the Indemnifying Party notifies the Indemnified
         Party that it does not dispute the claim or the amount of the claim
         described in such Indemnity Notice or fails to notify the Indemnified
         Party within the Dispute Period whether the Indemnifying Party disputes
         the claim or the amount of the claim described in such Indemnity
         Notice, the Loss in the amount specified in the Indemnity Notice will
         be conclusively deemed a liability of the Indemnifying Party under
         Section 9.1 and the Indemnifying Party shall pay the amount of such
         Loss to the Indemnified Party on demand. If the Indemnifying Party has
         timely disputed its liability or the amount of its liability with
         respect to such claim, the Indemnifying Party and the Indemnified Party
         shall proceed in good faith to negotiate a resolution of such dispute.

                  (c) Any dispute under this Agreement or the Warrant shall be
         submitted to arbitration (including, without limitation, pursuant to
         this Section 9.2) and shall be finally and conclusively determined by
         the decision of a board of arbitration consisting of three (3) members
         (the "Board of Arbitration") selected as hereinafter provided. Each of
         the Indemnified Party and the Indemnifying Party shall select one (1)
         member and the third member shall be selected by mutual agreement of
         the other members, or if the other members fail to reach agreement on a
         third member within twenty (20) days after their selection, such third
         member shall thereafter be selected by the American Arbitration
         Association upon application made to it for such purpose by the
         Indemnified Party. The Board of Arbitration shall meet on consecutive
         business days in San Francisco County, California or such other place
         as a majority of the members of the Board of Arbitration determines
         more appropriate, and shall reach and render a decision in writing
         (concurred in by a majority of the members of the Board of Arbitration)
         with respect to the amount, if any, which the Indemnifying Party is
         required to pay to the Indemnified Party in respect of a claim filed by
         the Indemnified Party. In connection with rendering its decisions, the
         Board of Arbitration shall adopt and follow such rules and procedures
         as a majority of the members of the Board of Arbitration deems
         necessary or appropriate. To the extent practical, decisions of the
         Board of Arbitration shall be rendered no more than thirty (30)
         calendar days following commencement of proceedings with respect
         thereto. The Board of Arbitration shall cause its written decision to
         be delivered to the Indemnified Party and the Indemnifying Party. Any
         decision made by the Board of Arbitration (either prior to or after the
         expiration of such thirty (30) calendar day period) shall be final,
         binding and conclusive on the Indemnified Party and the Indemnifying
         Party and entitled to be enforced to the fullest extent permitted by
         law and entered in any court of competent jurisdiction. Each party to
         any arbitration shall bear its own expense in relation thereto,
         including but not limited to such party's attorneys' fees, if any, and
         the expenses and fees of the Board of Arbitration shall be divided
         between the Indemnifying Party and the Indemnified Party in the same
         proportion as the portion of the related claim determined by the Board
         of Arbitration to be payable to the Indemnified Party bears to the
         portion of such claim

                                 Page 27 of 30
<PAGE>

         determined not to be so payable.

                                    ARTICLE X
                                  MISCELLANEOUS

SECTION 10.1 FEES AND EXPENSES. The Company and the Investor agree to pay their
own expenses incident to the performance of their obligations hereunder, except
that the Company shall pay all the reasonable out-of-pocket expenses of
Investor, including expenses of Investor's counsel, incurred in the preparation,
negotiation, execution and delivery of this Agreement, the Loan and Security
Agreement, the Registration Rights Agreement the Warrant Purchase Agreement, the
Warrant and related documents thereto, and in any participation by such counsel
in the preparation of the Registration Statement. In addition, the Company shall
pay the Investor (a) a one-time transaction fee of $30,000 payable in two equal
payments of $15,000 each: (I) the first payment will occur on even date
herewith, and (ii) the second and final payment will occur on the 6th month
anniversary of the first payment, and (b) a quarterly fee equal to .002 times
the maximum aggregate consideration still available on each 90th day anniversary
of the Subscription Date (the "Quarter Anniversary Date") after giving effect to
all limitations contained in this Agreement on the Company's right to Put Put
Shares to the Investor, including, without limitation, Section 7.2 (h) hereof,
if any, for purchase of Put Shares under this Agreement (the "Unused
Commitment") which shall be payable no later than 10 days after each Quarter
Anniversary Date that occurs prior to the end of the Commitment Period, and (c)
a prorated fee due 10 days following the end of the Commitment Period equal to
the Unused Commitment as of the end of the Commitment Period times .002 times
the number of days between the last Quarter Anniversary Date during the
Commitment Period and the end of the Commitment Period divided by ninety (90).

SECTION 10.2 BROKERAGE. Each of the parties hereto represents that, except as
set forth in Section 10.1, 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 persons claiming brokerage
commissions or finder's fees on account of services purported to have been
rendered on behalf of the indemnifying party in connection with this Agreement
or the transactions contemplated hereby.

SECTION 10.3 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

                                 Page 28 of 30
<PAGE>

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 given in accordance herewith. 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 express 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:

        IF TO THE COMPANY:

        Interactive Telesis Inc.
        12636 High Bluff Drive, 2nd Floor
        San Diego, CA 92130-2022
        Attention: Mr. Donald E. Cameron, President and CEO
                Telephone: 858-523-4000
                Facsimile: 858-523-4001

        WITH A COPY (WHICH SHALL NOT CONSTITUTE NOTICE) TO:

        Bruce J. Rushall, esq.
        Rushall & McGeever, APC
        1903 Wright Place, Suite 250
        Carlsbad, CA 92008
                Telephone: 760-438-6855
                Facsimile: 760-438-3026 IF

TO THE INVESTOR:

Hambrecht & Quist Guaranty Finance, LLC
One Bush Street
San Francisco, CA 94104
Attention: Ms. Anne Retterer
Telephone: (415) 439 3300
Facsimile: (415) 439 3804

Either party hereto may from time to time change its address or facsimile number
for notices under this

                                 Page 29 of 30
<PAGE>

Section by giving at least ten (10) days' prior written notice of such
changed address or facsimile number to the other party hereto.

SECTION 10.4 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 of the Put
Shares purchased or acquired by the Investor hereunder with respect to the Put
Shares held by such person, and (b) the Investor's interest in this Agreement
may be assigned at any time, in whole or in part, to any other person or entity
(including any affiliate of the Investor).

SECTION 10.5 AMENDMENT; NO WAIVER. No party shall be liable or bound to any
other party in any manner by any warranties, representations or covenants except
as specifically set forth in this Agreement or therein. Except as expressly
provided in this Agreement, neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument
signed by both parties hereto. The failure of the either party to insist on
strict compliance with this Agreement, or to exercise any right or remedy under
this Agreement, shall not constitute a waiver of any rights provided under this
Agreement, nor estop the parties from thereafter demanding full and complete
compliance nor prevent the parties from exercising such a right or remedy in the
future.

SECTION 10.6 ANNEXES AND EXHIBITS; ENTIRE AGREEMENT. All annexes and exhibits to
this Agreement are incorporated herein by reference and shall constitute part of
this Agreement. This Agreement, the Loan and Security Agreement, the
Registration Rights Agreement, the Warrant Purchase Agreement, the Warrant and
the documents related thereto set forth the entire agreement and understanding
of the parties relating to the subject matter hereof and thereof and supersede
all prior and contemporaneous agreements, negotiations and understandings
between the parties, both oral and written, relating to the subject matter
hereof.

SECTION 10.7 TERMINATION; SURVIVAL. This Agreement shall terminate on the
earlier of (i) the one year anniversary of the Effective Date; or (ii) such date
that the Investor terminates this Agreement pursuant to Section 2.4 hereof and
(iii) the date on which the Company has made Puts with an aggregate Investment
Amount equal to the Maximum Commitment Amount; provided, however, that the
provisions of Articles V, VI, VIII, IX and X, and of Section 2.1(b) and Section
7.3, shall survive the termination of this Agreement. SECTION

10.8 SEVERABILITY. 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

                                 Page 30 of 30
<PAGE>

changes the economic benefit of this Agreement to any party.

SECTION 10.9 TITLE AND SUBTITLES. The titles and subtitles used in this
Agreement are used for the convenience of reference and are not to be considered
in construing or interpreting this Agreement.

SECTION 10.10 COUNTERPARTS. 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.

SECTION 10.11 CHOICE OF LAW. This Agreement shall be construed under the laws of
the State of Delaware, without regard to choice of law provisions. The parties
agree to submit to the jurisdiction of the Delaware courts for the purpose of
resolving any disputes, and further agree that venue for any action brought
hereunder shall lie exclusively in such courts.

IN WITNESS WHEREOF, the parties hereto have caused this Equity Credit Line
Agreement to be executed by the undersigned, thereunto duly authorized, as of
the date first set forth above.

HAMBRECHT & QUIST GUARANTY FINANCE, LLC

By:
      ------------------------------------

Name: Donald M. Campbell
      ------------------------------------

Title: Chief Executive Officer
      ------------------------------------

INTERACTIVE TELESIS INC.

By:
      ------------------------------------

Name: William R. Adams
      ------------------------------------

Title: Secretary and Chief Financial Officer
      ------------------------------------

                                 Page 31 of 30<PAGE>

                                  EXHIBIT 10.55

                   PREFERRED STOCK WARRANT PURCHASE AGREEMENT

         THIS PREFERRED STOCK WARRANT PURCHASE AGREEMENT (the "Agreement") is
made and entered into as of the ________ day of November 2000, by and among
INTERACTIVE TELESIS INC. a Delaware corporation (the "Company"), and HAMBRECHT &
QUIST GUARANTY FINANCE, LLC, a California limited liability company ("H&QGF").
H&QGF shall be referred to herein as the "Investor." As used in this Agreement,
the term "Shares" shall mean the shares of the Company's Series A Convertible
Preferred Stock (and shares of such class of stock into which it is convertible,
if applicable) issuable from time to time upon exercise of the Warrants, as
defined in Section 1.1 below, or upon exercise of the rights to convert the
Warrants, as provided under Section 7 of the Warrant (the "Conversion Rights").

         THE PARTIES HERETO AGREE AS FOLLOWS:

         ARTICLE 1.     SALE AND PURCHASE OF WARRANTS; CLOSING.

                        1.1 SALE AND  PURCHASE OF  WARRANTS.  The Company
agrees to sell to the Investor and the Investor agrees to purchase from the
Company for a purchase price of three thousand nine hundred forty-seven dollars
and thirty-seven cents ($3,947.37), a warrant in the form attached hereto as
Exhibit A to purchase 394,737 shares of the Company's Series A Convertible
Preferred Stock (the "Preferred Stock") at an initial per share exercise price
of $1.52 at any time on or before November ___, 2007. The warrants to be issued
to Investor hereunder shall be referred to collectively herein as the "Warrants"
and individually as a "Warrant".

                        1.2 CLOSING.  The issuance of the Warrants shall take
place on the even date hereof, or on such other date as the parties shall
mutually agree (the "Closing"). At the Closing, the Company shall cause to be
delivered to the Investor the Warrants issued in the name of such Investor and
Investor shall pay the Company $3,947.37 by check, wire transfer or such other
means as shall be reasonably designated by the Company.

         ARTICLE 2.     REPRESENTATIONS  AND  WARRANTIES OF THE COMPANY.  The
Company  hereby agrees and represents and warrants to the Investor as follows:

                        2.1 CORPORATE STATUS.  The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and has all requisite legal and

                                     Page 1

<PAGE>

corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as now conducted and as proposed to be
conducted.

                        2.2 CAPITALIZATION.  Immediately prior to the Closing,
the authorized capitalization of the Company will consist of that which is
described on Schedule 1. Except as provided in Schedule 1, there are no
outstanding rights, options, warrants or agreements for the purchase or
acquisition from the Company of any shares of its capital stock.

                        2.3  AUTHORIZATION.  All  corporate  action  on the
part of the Company, its officers, directors and shareholders necessary for the
authorization, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, including the
authorization, issuance and delivery of the Warrants, the reservation of the
Shares issuable upon the exercise thereof, the reservation of shares of Common
Stock issuable upon the conversion of such Shares, and the grant of registration
rights to the Investor, has been taken or will be taken prior to Closing. The
person signing this Agreement has full power and authority to enter into this
Agreement on behalf of the Company. When executed and delivered, this Agreement
will constitute a valid and binding obligation of the Company.

                        2.4 CORPORATE  POWER. The Company has all requisite
legal and corporate power and authority to enter into this Agreement and all
requisite legal and corporate power and authority to issue and deliver the
Warrants and the Shares and to carry out and perform its obligations under the
terms and conditions of this Agreement.

                        2.5  VALIDITY  OF  WARRANTS.  The  Warrants  to be
issued and delivered pursuant to this Agreement shall constitute a valid and
binding obligations of the Company. The Shares and the shares of Common Stock
issuable upon conversion of the Shares have been duly and validly reserved, and
when issued in accordance with the terms of the Warrants shall be duly
authorized, validly issued, fully paid and nonassessable and free of any liens
or encumbrances except for restrictions on transfer provided for under
applicable federal and state securities laws. During the period within which the
purchase rights represented by the Warrants may be exercised, the Company shall
at all times have authorized, and reserved for issuance upon exercise of the
Warrants or upon exercise of the Conversion Right, a sufficient number of shares
of Preferred Stock to provide for the issuance of the Shares and issuance of
shares of Common Stock upon conversion of the Shares. The issuance of such
Preferred Stock and Common Stock is not and will not be subject to any
preemptive rights or rights of first refusal except such as have been
effectively waived.

                                     Page 2
<PAGE>

                        2.6 COMPLIANCE  WITH OTHER  INSTRUMENTS.  The Company is
not in violation of, conflict with or default under (i) any provision of its
amended and restated certificate of incorporation or bylaws, or (ii) any
contract, instrument, judgment, order, writ or decree to which it or any of its
subsidiaries is a party or by which it or any of them is bound, or, to the best
of its knowledge, of any provision of any federal or state statute, rule or
regulation applicable to the Company or any of its subsidiaries, except in the
case of clause (ii) as would not have a material adverse effect on the assets,
condition, or properties of the Company and its subsidiaries taken as a whole,
financial or otherwise (a "MAE"). The execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby,
including the authorization, issuance and delivery of the Warrants, the
reservation of the Shares issable upon exercise thereof and the grant of
registration rights to the Investor, will not, with or without the passage of
time and giving of notice, result in any such violation, conflict or default, or
an event that results in the creation of any material lien, charge or
encumbrance upon any assets of the Company or any of its subsidiaries or the
suspension, revocation, impairment or forfeiture of any material permit,
license, authorization, or approval applicable to the Company or any of its
subsidiaries.

         ARTICLE 3.     REPRESENTATIONS  AND  WARRANTIES OF THE INVESTOR.  The
Investor represents and warrants to the Company that:

                        3.1 AUTHORIZATION.  The person signing this Agreement
has full power and authority to enter into this Agreement on behalf of the
Investor. When executed and delivered, this Agreement will constitute the
Investor's valid and legally binding obligation.

                        3.2 INVESTMENT REPRESENTATIONS.

                                    (a) The  Investor  understands  that the
Warrants and the Shares have not been registered under the Securities Act of
1933, as amended (the "Act"), and will be issued pursuant to an exemption from
registration contained in the Act based in part upon the representations of the
Investor contained herein.
                                    (b) The  Investor is acquiring  the Warrants
and the Shares solely for its own account and not as a nominee for any other
party and not with a view toward the resale or distribution thereof.

                                    (c) The Investor is a  sophisticated
investor experienced in venture capital investing and able to fend for itself.
The Investor is able to bear the economic risk of the purchase of the Warrants
and the Shares, including a complete loss of the Investor's investment. The
Investor has been afforded an opportunity to ask such questions of the Company's
officers, employees, agents, accountants

                                     Page 3
<PAGE>

and representatives concerning the Company's business, operations, financial
condition, assets, liabilities and other relevant matters as it has deemed
necessary or desirable.

         ARTICLE 4. CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT THE CLOSING. The
obligation of the Investor to purchase the Warrants is subject to the
fulfillment to its satisfaction, or its written waiver thereof, prior to or at
the Closing, of each of the following conditions:

                        4.1  REPRESENTATIONS  AND  WARRANTIES.  The
representations and warranties of the Company contained in Article 2 hereof
shall be true and correct in all material respects on and as of the Closing.

                        4.2  CORPORATE  ACTION.  All  corporate  action on the
part of the Company, its officers, directors and shareholders necessary for the
authorization, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby shall have been taken.

                        4.3 OPINION OF COUNSEL.  There shall have been
delivered to the Investor an opinion of the Company's counsel dated as of the
date of the Closing in substantially the form attached hereto as Exhibit B.

                        4.4 DELIVERY OF WARRANTS. There shall have been
delivered to the Investor the Warrants.

                        4.5 GOVERNMENTAL CONSENTS. All permits, consents,
approvals, orders and authorizations, if any, which the Company is required to
obtain from, and all registrations, qualifications, designations, declarations
and filings which the Company is required to make with, any Federal or state
governmental authority of the United States in connection with the execution,
delivery or performance of this Agreement, the consummation of the transactions
contemplated hereby or the issuance and delivery of the Warrants to the Investor
pursuant to this Agreement, except post-sale filings, which may be required
under the Blue Sky laws of any applicable states, shall have been duly obtained
or made and shall be effective on and as of the Closing.

                        4.6  REGISTRATION  RIGHTS.  The Company  shall  provide
the Investor such evidence as the Investor may require that all corporate action
on the part of the Company, its officers, directors and shareholders necessary
for the grant of registration rights pursuant to Section 6 hereof has been taken
prior to the Closing.

                                     Page 4
<PAGE>

                        4.7  DELIVERY OF OTHER  DOCUMENTS.  The Company  shall
have delivered the Registration Rights Agreement to the Investor in satisfactory
form.

         ARTICLE 5. CONDITION OF THE COMPANY'S OBLIGATIONS AT THE CLOSING. The
obligation of the Company to issue the Warrants to the Investor is subject to
the fulfillment to its satisfaction, or its written waiver thereof, prior to or
at the Closing, of the following conditions:

                        5.1  REPRESENTATIONS  AND WARRANTIES.  The
representations  and warranties of the Investor contained in Article 3 hereof
shall be true and correct on and as of the Closing.

                        5.2  PAYMENT  OF  PURCHASE  PRICE.  The  Investor  shall
pay the  Company an  aggregate  of $3,947.37.

                        5.3 GOVERNMENTAL CONSENTS. All permits,  consents,
approvals, orders and authorizations, if any, which the Company is required to
obtain from, and all registrations, qualifications, designations, declarations
and filings which the Company is required to make with, any Federal or state
governmental authority of the United States in connection with the execution,
delivery or performance of this Agreement, the consummation of the transactions
contemplated hereby or the issuance and delivery of the Warrants to the Investor
pursuant to this Agreement, except post-sale filings, which may be required
under the Blue Sky laws of any applicable states (which the Company hereby
agrees to make in accordance with such laws), shall have been duly obtained or
made and shall be effective on and as of the Closing.

         ARTICLE 6. REGISTRATION RIGHTS. The Company shall use its best efforts
to cause the Registration Rights Agreement, dated as of even date herewith, to
remain in full force and effect and the Company shall comply in all respects
with the terms thereof.

                        6.1  "REGISTRATION  STATEMENT"  means a registration
statement filed by the Company with the Commission for a public offering and
sale of securities of the Company on Form S-1, SB-1 or SB-2 and maintained in
full force and effect during the Commitment Period and up until and including
the one-year anniversary of the expiration of the Equity Line of Credit
Agreement sufficient to cover registration of the maximum amount of Common Stock
issuable upon conversion of the Warrant Shares offered to the Investor under
this Warrant Purchase Agreement (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 Warrant and in accordance with the intended

                                     Page 5
<PAGE>

method of distribution of such securities), for the registration of the resale
by the Investor of the Registrable Securities under the Securities Act.

                        6.2 "REGISTRABLE  SECURITIES"  shall mean the Common
Stock issuable upon the conversion of (a) the Put Shares, (b) the Dividend
Shares, (c) the Warrant Shares, (d) the Blackout Shares and any securities
issued or issuable with respect to any of the foregoing by way of exchange,
stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise. As
to any particular Registrable Securities, once issued such securities shall
cease to be Registrable Securities when (w) the Registration Statement has been
declared effective by the SEC and all Registrable Securities have been disposed
of pursuant to the Registration Statement, (x) all Registrable Securities have
been, or could be in any three-month period, 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, (y) such time as
all Registrable Securities have been otherwise transferred to holders who may
trade such shares without restriction under the Securities Act, and the Company
has delivered a new certificate or other evidence of ownership for such
securities not bearing a restrictive legend or (z) in the opinion of counsel to
the Company, which counsel shall be reasonably acceptable to the Investor, all
Registrable Securities may be sold without registration or the need for an
exemption from any registration requirements and without any time, volume or
manner limitations pursuant to Rule 144(k) (or any similar provision then in
effect) under the Securities Act.

         ARTICLE 7.     TRANSFERS OF CERTAIN RIGHTS

                        7.1  TRANSFERS.  The rights granted under Article 6 may
be transferred to any person or entity acquiring Warrants or Shares; provided,
however, that the Company is given written notice by the transferor and the
transferee at the time of such transfer stating the name and address of the
transferee and identifying the securities with respect to which such rights are
being assigned and provided, further, that as a condition to such transfer, any
such transferee deliver to the Company a written instrument by which such
transferee agrees to be bound by the obligations imposed upon Investor under
Article 6 and Article 9 to the same extent as if such transferees were an
Investor hereunder.

                        7.2  SUBSEQUENT  TRANSFERS  A  transferee  to whom
rights are transferred pursuant to this Article 7 may not again transfer such
rights to any other person or entity, other than as provided in Section 7.1
above.

         ARTICLE 8.        FINANCIAL  STATEMENTS.  So long as the  Investor
continues to hold a Warrant or any Registrable Shares, the Company shall deliver
to the Investor, in the form and substance satisfactory to the Investor:

                                     Page 6
<PAGE>

                  a) Immediately upon filing with the SEC, all financial
         statements so filed; or,

                  b) In the event that the Company is no longer required to file
         periodic or other reports with the SEC, as soon as practicable (i)
         after the end of each fiscal year, and in any event within 90 days
         thereafter, the Company will provide the Investor with the Company's
         annual audited consolidated financial statements (consisting of a
         consolidated profit or loss statement for such fiscal year, a
         consolidated balance sheet of the Company as of the close of the fiscal
         year, and a consolidated statement of cash flows for such fiscal year,
         certified by independent public accountants of recognized national
         standing selected by the Company and satisfactory to Investor) and (ii)
         as soon as practicable after the end of each of the first three fiscal
         quarters and in any event within forty five (45) days thereafter, the
         Company will provide the Investor with quarterly unaudited consolidated
         financial statements. The right to receive financial statements under
         this Section 8 may be transferred to any subsequent holder of the
         Warrants who acquires the right to purchase not fewer than 25% of the
         Shares acquired pursuant to this Agreement (as appropriately adjusted
         for stock splits, stock dividends, stock subdivision and stock
         combinations with respect to underlying shares).

         ARTICLE 9.     MISCELLANEOUS.

                        9.1 AGREEMENT IS ENTIRE  CONTRACT.  This  Agreement,
including the Exhibits and Schedule 1 hereto, constitutes the entire contract
between the parties hereto with respect to the subject matter hereof.

                        9.2  EXPENSES.  Each  party to this  Agreement  shall
bear its own expenses incurred in connection with the negotiation, preparation,
execution and consummation of this Agreement; however, the Company shall pay the
legal fees and expenses in reimbursement of fees paid by Investor to its counsel
in connection with the preparation and negotiation of the Warrants and all
disbursements and expenses of the counsel to the Investor.

                        9.3  SURVIVAL  OF  REPRESENTATIONS  AND  WARRANTIES.
The representations, warranties, covenants and agreements of the Company and the
Investor contained herein or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing.

                        9.4  SEVERABILITY.  If one or more  provisions  of this
Agreement are held to be invalid, illegal or unenforceable under applicable law,
portions of such provisions, or such provisions in their

                                     Page 7
<PAGE>

entirety, to the extent necessary, shall be severed from this Agreement, and the
balance of this Agreement shall be enforceable in accordance with its terms.

                        9.5 COUNTERPARTS.  This Agreement may be executed in two
counterparts,  each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument.

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

COMPANY:
INTERACTIVE TELESIS INC.

By:
   --------------------------------------------------
Name:    William R. Adams
     ---------------------------------------
Title:   Secretary and Chief Financial Officer
      -----------------------------------------------

INVESTOR:
HAMBRECHT & QUIST GUARANTY FINANCE, LLC

By:
   --------------------------------------------------
Name:    Donald M. Campbell
     ------------------------------------------------
Title:   Chief Executive Officer
      -----------------------------------------------

<PAGE>

                     EXHIBIT A TO WARRANT PURCHASE AGREEMENT

THE SECURITIES EVIDENCED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND
RULES. NO SALE, OFFER TO SELL OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS
WARRANT OR ISSUABLE UPON THE EXERCISE HEREOF SHALL BE MADE UNLESS A REGISTRATION
STATEMENT UNDER SUCH ACT, AND APPLICABLE STATE SECURITIES LAWS WITH RESPECT TO
SUCH SECURITIES IS THEN IN EFFECT, OR PURSUANT TO AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS FOR SUCH LAWS AS MAY THEN BE IN EFFECT, OR AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.

                           WARRANT TO PURCHASE SHARES
                         OF CONVERTIBLE PREFERRED STOCK

Company:                 Interactive  Telesis  Inc.  (the
                         "Company"),  and any  corporation  that
                         shall succeed to the obligations of the
                         Company under this Warrant.

Number of Shares:        394,737

Class of Stock:          Series A Convertible Preferred Stock

Initial Warrant Price:   $1.52

Expiration Date:         November ___, 2007

Date of Grant:           November ___, 2000

         THIS CERTIFIES THAT, for $3,947.37, Hambrecht & Quist Guaranty Finance,
LLC, a California limited liability company ("H&QGF"), or nominees, is entitled
to purchase the above number (as adjusted pursuant to Section 5 hereof) of fully
paid and nonassessable shares of the above Class of Stock of the Company at the
Warrant Price (as defined in Section 1.5 hereof), subject to the provisions and
upon the terms and conditions set forth herein.

                   DEFINITIONS.  As used herein, the following terms, unless the
context otherwise requires,  shall have the following meanings:

                                     Page 1
<PAGE>

                   1.1 "ACT" shall mean the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations thereunder, as
shall be in effect from time to time.

                   1.2 "COMMON STOCK" shall mean shares of the presently
authorized common stock of the Company and any stock into which such common
stock may hereafter be exchanged.

                   1.3 "HOLDER" shall mean any person who shall at the
time be the holder of this Warrant.

                   1.4 "SHARES" shall mean the shares of the Class of Stock that
the Holder is entitled to purchase upon exercise of this Warrant, as adjusted
pursuant to Section 5 hereof.

                   1.5 "WARRANT PRICE" shall be the Initial Warrant Price at
which this Warrant may be exercised, as adjusted pursuant to Section 5 hereof.

         2. TERM. The purchase right represented by this Warrant is exercisable,
in whole or in part, on or before the Expiration Date; provided, however, that
the Warrant may not be exercised prior to the sixty-first (61st) day after the
expiration of the Commitment Period (as defined in that Equity Line of Credit
Agreement dated November ____, 2000 between the Company and H&QGF, as amended
(the "Equity Agreement") unless (a) the number of shares of Registrable
Securities issuable to H&QGF upon exercise of the Warrant and any prior warrant
issued to H&QGF (assuming conversion of the Class of Stock into Common Stock),
together with (b) the Put Shares which the Company is then entitled to Put (as
such terms are defined in the Equity Agreement) (assuming conversion of such Put
Shares into Registrable Securities) would not exceed the limitation set forth in
Section 7.2(h) of the Equity Agreement.

          3.      EXERCISE OF WARRANT; PAYMENT; ISSUANCE OF NEW WARRANT.

                  3.1 Subject to Section 2 hereof, the purchase rights
         represented by this Warrant may be exercised by the Holder, in whole or
         in part, by the surrender of this Warrant (with the notice of exercise
         form attached hereto as Appendix A duly executed) at the principal
         office of the Company and by the payment to the Company, by check made
         payable to the Company drawn on a United States bank and for United
         States dollars, or by wire transfer to an account of the Company, of an
         amount equal to the then applicable Warrant Price per share multiplied
         by the number of Shares then being purchased. In the event of any
         exercise of the purchase right described in this Section 3, a
         certificate(s) for the Shares so purchased shall be delivered to the
         Holder within thirty (30) days of receipt of such payment and, unless
         this Warrant has been fully exercised or expired, a new Warrant (dated
         as of the date hereof) representing the portion of the Shares, if any,
         with respect to which this Warrant shall not then have been exercised
         shall also be

                                     Page 2

<PAGE>

         issued to the Holder within such thirty (30) day period. All shares of
         the Class of Stock, Common Stock or other securities issued upon the
         exercise of this Warrant shall be validly issued, fully paid and
         nonassessable, and the Company will pay all taxes in respect of the
         issuance thereof (other than any transfer tax or any income or capital
         gain taxes payable by the Holder).

                  3.2 Unless covered by an effective registration statement at
that time, the Company may require that such certificate or certificates and any
new Warrant contain on the face thereof a legend substantially as follows:

                  The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended, or applicable state
securities laws and rules. No sale, offer to sell or transfer of the securities
represented by this certificate shall be made unless a registration statement
under such act, and applicable state securities laws with respect to such
securities is then in effect, or pursuant to an exemption from such registration
requirements for such laws as may then be in effect, or an opinion of counsel
reasonably satisfactory to Company and its counsel that such registration is not
required.

4.      ADJUSTMENT OF NUMBER AND KIND OF SHARES AND ADJUSTMENT OF WARRANT PRICE.

                  4.1      CERTAIN  DEFINITIONS:  As used in this  Section 4,
the  following  terms shall have the following respective meanings:

                  (a)      OPTIONS:  rights,  options or warrants to subscribe
for,  purchase or otherwise  acquire shares of Common Stock or Convertible
Securities.

                  (b)      CONVERTIBLE  SECURITIES:  any  evidence  of
indebtedness,  shares  of  stock  or  other securities directly or indirectly
convertible into or exchangeable for Common Stock.

                  4.2 ADJUSTMENTS: The number and kind of securities purchasable
upon the exercise of this Warrant and the Warrant Price shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:

                   (a) RECLASSIFICATION, REORGANIZATION, CONSOLIDATION OR
         MERGER. In the case of any reclassification of the Common Stock, or any
         reorganization, consolidation or merger of the Company with or into
         another corporation (other than a merger or reorganization with respect
         to which the Company is the continuing corporation and which does not
         result in any reclassification of the Common Stock) (a
         "Reclassification"), the Company, or such successor corporation, as the
         case may be, shall execute a new warrant providing that the Holder
         shall have the right to exercise such new warrant and upon such
         exercise to receive, in lieu of each share of the Class

                                     Page 3
<PAGE>

         of Stock theretofore issuable upon exercise of this Warrant, the
         number and kind of securities receivable upon such reclassification,
         reorganization, consolidation or merger by a holder of shares of the
         Class of Stock for each such share of the Class of Stock. The
         aggregate Warrant Price of the new warrant shall be the aggregate
         Warrant Price in effect immediately prior to the Reclassification, and
         the Warrant Price per share shall be appropriately increased or
         decreased. Such new warrant shall provide for adjustments which shall
         be as nearly equivalent as may be practicable to the adjustments
         provided for in this Section 4 including, without limitation,
         adjustments to the Warrant Price and to the number of shares issuable
         upon exercise of this Warrant. The provisions of this subsection (a)
         shall similarly apply to successive Reclassifications.

                   (b) Split, Subdivision or Combination of Shares. If the
         Company at any time while this Warrant remains outstanding; and
         unexpired shall split, subdivide or combine the Class of Stock for
         which this Warrant is then exercisable, the Warrant Price shall be
         proportionately decreased in the case of a split or subdivision or
         proportionately increased in the case of a combination. Any adjustment
         under this subsection (b) shall become effective when the split,
         subdivision or combination becomes effective.

                   (c) STOCK DIVIDENDS. If the Company at any time while this
         Warrant remains outstanding and unexpired shall pay a dividend with
         respect to the Class of Stock for which this Warrant is then
         exercisable, payable in shares of that Class of Stock, Options, or
         Convertible Securities, the Warrant Price shall be adjusted, from and
         after the date of determination of the shareholders entitled to receive
         such dividend or distributions, to that price determined by multiplying
         the Warrant Price in effect immediately prior to such date of
         determination by a fraction (i) the numerator of which shall be the
         total number of shares of that Class of Stock outstanding immediately
         prior to such dividend or distribution, and (ii) the denominator of
         which shall be the total number of shares of the same Class of Stock
         outstanding immediately after such dividend or distribution (including
         shares of that Class of Stock issuable upon exercise, conversion or
         exchange of any Option or Convertible Securities issued as such
         dividend or distribution). If the Options or Convertible Securities
         issued as such dividend or distribution by their terms provide, with
         the passage of time or otherwise, for any decrease in the consideration
         payable to the Company, or any increase in the number of shares
         issuable upon exercise, conversion or exchange thereof (by change of
         rate or otherwise), the Warrant Price shall, upon any such decrease or
         increase becoming effective, be reduced to reflect such decrease or
         increase as if such decrease or increase became effective immediately
         prior to the issuance of the Options or Convertible Securities as the
         dividend or distribution. Any adjustment under this subsection (c)
         shall become effective on the record date.

                                     Page 4
<PAGE>

                   (d) OTHER SECURITIES. In the event the Company at any time or
         from time to time after the issuance of this Warrant makes, or fixes a
         record date for the determination of holders of Common Stock entitled
         to receive, a dividend or other distribution payable in securities of
         the Company other than shares of Common Stock, then, and in each such
         event, provision shall be made so that the Holder shall receive, upon
         exercise hereof, in addition to the number of shares of Common Stock
         receivable thereupon, the amount of securities of the Company which the
         Holder would have received had this Warrant been exercised (assuming
         conversion of the Class of Stock into Common Stock) on the date of such
         event and had the Holder thereafter, during the period from the date of
         such event to and including the date of exercise, retained such
         securities receivable by such Holder as aforesaid during such period,
         subject to all other adjustments called for during such period under
         this Section 4 with respect to the rights of the Holder.

                   (e) NEW SECURITIES. If the Company, at any time while this
         Warrant remains outstanding and unexpired, shall issue additional
         shares of Common Stock, Options or Convertible Securities at a price
         per share below the Warrant Price (except for (i) issuances under the
         Equity Agreement, and (ii) grants of awards of options or restricted
         stock to employees or consultants of the Company approved by the
         Company's Board of Directors pursuant to an equity incentive or similar
         plan, and (iii) issuances of up to and including $1,000,000 under the
         Reichmann Transaction), the Warrant Price shall be reduced to such
         price. Notwithstanding the foregoing, the Company shall not be required
         to make any adjustment to the Warrant Price in the case of the issuance
         of shares of Common Stock, Options or Convertible Securities upon the
         exercise of any options or warrants outstanding as of the Date of
         Grant.

                   4.3 ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment in
the Warrant Price pursuant to Section 4.2 hereof, the number of Shares issuable
upon exercise of this Warrant shall be adjusted to the product obtained by
multiplying the number of Shares issuable immediately prior to such adjustment
in the Warrant Price by a fraction (a) the numerator of which shall be the
Warrant Price immediately prior to such adjustment, and (b) the denominator of
which shall be the Warrant Price immediately after such adjustment.

         5. NOTICE OF ADJUSTMENTS. Whenever the Warrant Price shall be adjusted
pursuant to Section 4 hereof, the Company shall issue a certificate signed by
its chief financial officer or chief executive officer setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated and the Warrant
Price after giving effect to such adjustment and shall cause a copy of such
certificate to be mailed (by first class mail, postage prepaid) to the Holder.

                                     Page 5
<PAGE>

         6. RIGHT TO CONVERT WARRANT INTO STOCK.

                   6.1 CONVERSION PRICE. The conversion price ("Conversion
Price") of one share of the Class of Stock for which this Warrant is then
exercisable is determined as, for the three months prior to any conversion of
the Warrant into such Class of Stock:

                   (a) if the Common Stock is publicly traded, the product of
         (a) the highest closing sale price or, if no closing sale price is
         reported, the highest daily average between the ask and bid prices of
         the Common Stock quoted on any exchange or over-the-counter market on
         which the Common Stock is listed, whichever is applicable, as
         published in the Western Edition of THE WALL STREET JOURNAL, and (b)
         the number of shares of Common Stock into which each share of the
         Class of Stock for which this Warrant is then exercisable is then
         convertible, if applicable; or,

                   (b) if the Common Stock is not traded in an over-the-counter
         market or on an exchange, the highest fair market value of a single
         share of the Class of Stock for which this Warrant is then exercisable,
         as determined in good faith by the Company's Board of Directors'
         provided; however, that if the Holder disputes in writing the fair
         market value determined by the Board of Directors within thirty (30)
         days of being informed of such fair market value, the fair market value
         shall be determined by an independent appraiser, appointed in good
         faith by the Company's Board of Directors.

                   6.2 RIGHT TO CONVERT. In addition to the rights granted
under Section 3 of this Warrant, the Holder shall have the right to require the
Company to convert this Warrant (the "Conversion Right") into shares of the
Class of Stock for which the Warrant is then exercisable, as provided in this
Section 6. Upon exercise of the Conversion Right, the Company shall deliver to
the Holder (without payment by the Holder of any Warrant Price) that number of
shares of stock equal to the quotient obtained by dividing (x) the value of this
Warrant at the time of the Conversion Right is exercised (determined by
subtracting the aggregate Warrant Price immediately prior to the exercise of the
Conversion Right from the aggregate Conversion Price) by (y) the Conversion
Price.

                   6.3 METHOD OF EXERCISE. The Conversion Right may be exercised
at any time by the Holder by the surrender of this Warrant at the principal
office of the Company together with a written statement specifying that the
Holder thereby intends to exercise the Conversion Right. Certificates evidencing
the Shares issuable exercise of the Conversion Right shall be delivered to the
Holder within thirty (30) days following determination of the Conversion Price.

                                     Page 6
<PAGE>

                   6.4 AUTOMATIC CONVERSION PRIOR TO EXPIRATION. To the extent
this Warrant is not previously exercised, and if the Conversion Price is greater
than the Warrant Price per share on the expiration date, this Warrant shall be
deemed automatically exercised in accordance with Section 6.2 hereof (even if
not surrendered) immediately before its expiration. To the extent this Warrant
or any portion thereof is deemed automatically exercised pursuant to this
Section 6.4, the Company agrees to notify Holder within a reasonable period of
time of the number of shares of the Class of Stock, if any, Holder is to receive
by reason of such automatic exercise. The Company shall issue to the Holder
certificates for the Shares issued upon such automatic conversion in accordance
with Section 6.3 above, although the Company may condition receipt of the
certificate upon surrender of the Warrant to the Company.

         7. TRANSFERABILITY AND NON-NEGOTIABILITY OF WARRANTS AND SHARES. This
Warrant and the Shares issued upon exercise hereof may not be transferred or
assigned in whole or in part without compliance with applicable federal and
state securities laws by the transferor and the transferee (including, without
limitation, the delivery of investment representation letters and legal opinions
reasonably satisfactory to the Company, if reasonably requested by the Company).
Subject to the provisions of this Section 7, title to the Warrant may be
transferred in the same manner as a negotiable instrument transferable by
endorsement and delivery.

         8. NOTICES. The Company shall mail any notice hereunder to the
registered Holder of the Warrant, at its last known post office address
appearing on the books of the Company, not less than ten (10) days prior to the
date on which (a) a record will be made for the purpose of determining the
Holders of Common Stock entitled to dividends or subscription rights, or (b) a
record will be made (or in lieu thereof, the transfer books will be closed) for
the purpose of determining the Holders of Common Stock entitled to notice of and
to vote at a meeting of stockholders at which any capital reorganization,
reclassification of shares of Common Stock, consolidation, merger, dissolution,
liquidation, winding up or sale of substantially all of the Company's assets
shall be considered and acted upon.

         9. MISCELLANEOUS. No fractional shares shall be issued in connection
with any exercise hereunder, but in lieu of such fractional Shares the Company
shall make a cash payment therefor upon the basis of the fair market value of
the fractional share. The terms and provisions of this Warrant shall inure to
the benefit of, and be binding upon, the Company and the Holders hereof and
their respective successors and assigns. This Warrant shall be construed under
the laws of the State of Delaware, without regard to choice of law provisions.
The parties agree to submit to the jurisdiction of the Delaware courts for the
purpose of resolving any such disputes, and further agree that venue for any
action brought hereunder shall lie exclusively in such courts. The
representations, warranties and agreements herein contained shall survive the
exercise of this Warrant. References to the "holder of" include the immediate

                                     Page 7
<PAGE>

Holder of shares purchased on the exercise of this Warrant, and the word
"Holder" shall include the plural thereof. The titles of the sections and the
subscriptions of this Warrant are for convenience only and are not to be
considered in construing this Warrant. All pronouns used in the Warrant shall be
deemed to include masculine, feminine and neuter forms.

         IN WITNESS WHEREOF, this War-rant has been duly executed by the
undersigned, as of the Date of Grant shown above.

INTERACTIVE TELESIS INC.

By:   ----------------------------------------------

Name: William R. Adams
      ----------------------------------------------

Title: Secretary and Chief Financial Officer
      ----------------------------------------------

                                     Page 8
<PAGE>

                                                           APPENDIX A TO WARRANT

                               NOTICE OF EXERCISE

     The undersigned, the Holder of the foregoing Warrant, hereby irrevocably
elects, pursuant to Section 3 of the Warrant, to exercise the purchase rights
represented by such Warrant for, and to purchase thereunder, _____ shares of the
Class of Stock of to which such Warrant relates and herewith makes payment of
$___________ therefor in cash, wire transfer or by certified check and requests
to be delivered to the undersigned, the address for which is set forth below the
signature of the undersigned.

Dated:  ___________________
                                  Name of Holder: __________________________

                            By:   __________________________________________
                                  (Signature of Authorized Officer)
                            Name: __________________________________________
                            Title: _________________________________________

                                     Page 9
<PAGE>

                                                           APPENDIX B TO WARRANT

                               NOTICE OF EXCHANGE

     The undersigned, the Holder of the foregoing Warrant, hereby elects,
pursuant to Section 6 of the Warrant, to exercise the purchase rights to
purchase shares of the Class of Stock covered by such Warrant and herewith makes
payment in full therefor by surrender of such Warrant, and requests that
certificates for such Shares (and any other securities or property deliverable
upon such exchange including a revised warrant) be issued in the name of the
undersigned and delivered to its address as set forth in the Warrant.

Dated:  ____________________________________

                    Name of Holder:

                    By:   _______________________________________________
                                 (Signature of Authorized Officer)

                    Title: ______________________________________________

                                     Page 2

<PAGE>

                     EXHIBIT B TO WARRANT PURCHASE AGREEMENT

(LETTERHEAD OF COMPANY COUNSEL)

TO:  HAMBRECHT & QUIST GUARANTY FINANCE

Ladies and Gentlemen:

     We have acted as counsel to Interactive Telesis Inc., a Delaware
corporation (the "Company"), in connection with the issuance and sale to you of
the warrants (the "Warrants") to purchase an aggregate of 394,737 shares of
Series A Convertible Preferred Shares of the Company pursuant to that certain
Warrant Purchase Agreement, dated as of EVEN DATE HEREWITH (the "Agreement"),
between you and the Company. We are rendering this opinion pursuant to Section
4.3 of the Agreement. Capitalized terms not otherwise defined herein have the
meanings assigned to them in the Agreement.

     As counsel to the Company, we participated in the preparation, execution
and delivery of the Agreement and the Warrants and have made such legal and
factual examinations and inquiries as we have deemed advisable or necessary for
the purpose of rendering this opinion. In addition, we have examined originals
or copies of documents, corporate records and other writings which we consider
relevant for the purposes of this opinion.

     Based upon and subject to the foregoing and subject to the qualifications
contained herein, we are of the opinion that:

     1. All corporate action on the part of the Company and its officers,
directors and stockholders necessary for the due and valid execution and
delivery of the Agreement and for the consummation of the transactions
contemplated thereby, including, but not limited to, the issuance and sale of
the Warrants to you, has been taken.

     2. The Agreement has been duly executed and delivered by the Company and
represents a valid and binding obligation of the Company.

                                     Page 1
<PAGE>

     3. The Warrants have been duly and validly issued and represents a valid
and binding obligation of the Company.

     4. The shares of Company's Series A Convertible Preferred Stock (and shares
of the Common Stock into which it is convertible) issuable upon exercise of the
Warrants have been duly and validly reserved for issuance and, if issued
pursuant to the terms and conditions of the Warrants shall be duly authorized,
validly issued, fully paid and non-assessable.

                                     Very truly yours,

                                     ___________________________

                                     Page 2

<PAGE>

                                                                       EXHIBIT D
                   FORM OF LEGAL OPINION ON SUBSCRIPTION DATE

November ___, 2000

Hambrecht & Quist Guaranty Finance, LLC
One Bush Street
San Francisco, CA 94104

Ladies and Gentlemen:

We have acted as counsel for Interactive Telesis Inc., a Delaware corporation
(the "Company"), in connection with the Loan and Security Agreement and the
Equity Line of Credit Agreement dated as of November ___, 2000 (the
"Agreements") between the Company and Hambrecht and Quist Guaranty Finance, LLC
(H&QGF). The capitalized terms used herein shall have the same meanings as those
defined in the Agreements, unless otherwise defined herein.

As such counsel for the Company, we have made such legal and factual
examinations and inquiries as we have deemed advisable or necessary for the
purpose of rendering this opinion, including those relating to the
authorization, execution and delivery of the Agreements, and we have examined,
among other things, originals, certified copies, or copies otherwise identified
to us as being true copies of the originals, of the following:

     (a)  the Certificate of Incorporation of the Company, as amended to date;
     (b)  the Bylaws of the Company, as amended to date;
     (c)  minutes of the meetings of the Board of Directors of the Company with
          respect to the transactions covered by this opinion;
     (d)  executed copies of the Loan and Security Agreement, the Equity Line of
          Credit Agreement, the Warrant Purchase Agreement, the Form of Warrant
          as set forth as an exhibit thereto and the Registration Rights
          Agreement (the "Transaction Documents");
     (e)  the Certificate of Officer of the Company executed by the Chief
          Executive Officer of the Company, dated as of the date hereof; and
     (f)  the other documents delivered on the Closing Date.

In addition, we have obtained from public officials, officers of the Company and
the Company's transfer agent such other certificates and assurances, and we have
examined such corporate records, other

                                     Page 1
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documents and questions of law, as we have considered necessary or appropriate
for purposes of this opinion.

In rendering this opinion, we have assumed the genuineness of all signatures on
original documents, the authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies thereof, the legal capacity of natural persons and the due execution and
delivery by parties other than the Company, of all documents where due execution
and delivery are a prerequisite to effectiveness thereof. In addition, we have
assumed that the representatives and warranties made in the Transaction
Documents, and pursuant thereto, are true and correct.

Based upon and subject to the foregoing, and subject to further assumptions,
limitations, qualifications and exceptions set forth herein, we are of the
opinion that when executed and delivered by the Company to H&QGF, the
Transaction Documents will be the legal, valid, and binding obligations of the
Company, enforceable by H&QGF against the Company in accordance with their
respective terms.

As used in this opinion, the expressions "to our knowledge", "known to us" and
similar phrases with reference to matters of fact mean that, after an
examination of documents made available to us by the Company, and after
inquiries of officers of the Company, but without any further independent
factual investigation except as otherwise described herein, we find no reason to
believe that the opinions expressed herein are factually incorrect. Further, the
expressions "to our knowledge", "known to us" and similar phrases with reference
to matters of fact refer to the actual knowledge of the attorneys of this firm
who have thoroughly reviewed the Transaction Documents and the transactions
contemplated thereby for the Company. Except to the extent expressly set forth
herein or as we otherwise believe to be necessary to our opinion, we have not
undertaken any independent investigation to determine the existence or absence
of any fact, and not inference as to our knowledge of the existence or absence
of any fact should be drawn from our representation of the Company or the
rendering of the opinions set forth below.

The opinions set forth above are subject to the following qualifications,
limitations and exceptions:
     (a) The legality, validity, binding nature and enforceability of the
Company's obligations under the Transaction Documents may be subject to or
limited by (i) the effect of bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other laws relating to or affecting the enforceability of
creditors' rights generally; (ii) the remedies of specific performance,
injunctive relief or similar equitable relief, which may be subject to equitable
defenses or to the discretion of the court before which enforcement is sought;
(iii) the validity, binding effect or enforceability of any provisions
indemnifying any person against or relieving any person of liability for its own
negligent or wrongful acts or in any other circumstances, where enforcement of
such provisions may be subject to principles of public policy; (iv) the
validity, binding effect or enforceability of provisions pertaining to
cumulative remedies; (v) the

                                     Page 2
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compliance or noncompliance with applicable state and federal anti-fraud
statutes, rules and regulations concerning the issuance or transfer of
securities; (vi) the enforceability of provisions of the Transaction Documents
purporting to set evidentiary standards or provisions purporting to waive or
establish jurisdiction, venue, service of process, the right to a jury trial or
statutes of limitations; (vii) the enforceability of provisions in the
Transaction Documents purporting to provide for indemnification and/or
contributions under certain circumstances; and (viii) the enforceability of
provisions of the Transaction Documents purporting to (A) require a party to pay
or reimburse attorneys' fees incurred by another party, or indemnify another
party therefor, which provisions may be limited by applicable statutes and
decisions relating to the collection and award of attorneys' fees, (B) authorize
a party to act in its sole discretion, (C) waive procedural, substantive or
constitutional rights or defenses, or (D) impose penalties, forfeitures,
liquidated damages or an increased rate upon delinquency (to the extent the same
is deemed to be a penalty) in payment or upon the occurrence of a default.

The opinions hereinafter expressed are further subject to the qualification
that, in rendering the opinion in paragraph 3 below as to the number of shares
of capital stock of the Company issued and outstanding, please be advised that
we have not served as the Company's transfer agent, and, therefore we have
relied upon the Company and its transfer agent for this factual information. In
addition, as you know, the consummation of the transactions contemplated by the
Agreements are subject to the approval of _____________________________ of the
Company.

Based upon and subject to the foregoing and any exceptions noted in the
Officers' Certificate, we are of the opinion that:

     1.   The Company is a corporation duly organized, validly existing and in
          good standing under the laws of the State of Delaware and has all
          requisite power and authority to own, lease and operate its properties
          and to carry on its business as now being conducted. The Company is
          duly qualified as a foreign corporation to do business and is in good
          standing in every jurisdiction in which the nature of the business
          conducted or property owned by it makes such a qualification
          necessary, other than those in which the failure so to qualify would
          not have a Material Adverse Effect.

     2.   Each of the Transaction Documents has been duly and validly
          authorized, executed and delivered by the Company and constitute a
          valid and binding agreement of the Company, enforceable against the
          Company in accordance with its respective terms.

     3.   Based solely on information provided to us by the Company's transfer
          agent, the authorized capital stock of the Company consists of (i)
          __________________ shares of Common Stock,

                                     Page 3
<PAGE>

          $0.001 par value per share, of which _____ shares were issued and
          outstanding as of November ___, 2000; and (ii) _______________ shares
          of Preferred Stock, of which _____________ shares were designated
          Series A Convertible Preferred Stock, of which ___________ shares are
          issued and outstanding. The outstanding shares of Common Stock and
          Preferred Stock have been duly authorized and validly issued and are
          fully paid and nonassessable.

     4.   Except as set forth in the Transaction Documents, including the
          schedules thereto, there are no options, warrants, or rights to
          subscribe to, securities, right or obligations convertible into or
          exchangeable for or giving any right to subscribe for any shares of
          capital stock of the Company.

     5.   The execution and delivery of the Transaction Documents by the Company
          do not violate any provision of the Company's Certificate of
          Incorporation, as amended, or Bylaws and do not, to our knowledge,
          violate or contravene (i) any governmental statute, rule or regulation
          applicable to the Company or (ii) any order, writ, judgement,
          injunction, decree, determination or award which has been entered
          against the Company and of which we are aware, in any case, the
          violation or contravention of which would have a Material Adverse
          Effect.

     6.   Except as set forth in the Agreements, there are no lawsuits or
          proceedings pending or, to our knowledge, threatened, against the
          Company before any court or administrative agency which question the
          validity of the Transaction Documents or which might have, either
          individually or in the aggregate, a Material Adverse Effect.

This opinion is rendered as of the date hereof only, and we do not assume any
responsibility to update or modify such opinion based upon new or additional
information or facts which arise or come to our attention subsequent to the
delivery of this opinion letter to you. This opinion is furnished by us, as
counsel to the Company, to you and is solely for your benefit and may not be
made available to or replied upon by, nor may copies be delivered to, any other
persons or entities or for any other purpose without our prior written consent.

Very truly yours,

                                     Page 4
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                                    EXHIBIT E
               LIST OF OPINIONS TO BE GIVEN ON ANY EFFECTIVE DATE

Based upon and subject to the foregoing and any exceptions noted in the
Officers' Certificate, we are of the opinion that:

     1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
power and authority to own, lease and operate its properties and to carry on its
business as now being conducted. The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it makes such a
qualification necessary, other than those in which the failure so to qualify
would not have a Material Adverse Effect.

     2. The Company has authorized capital stock as set forth in the
Registration Statement and Prospectus. All of the outstanding shares of Capital
Shares are duly and validly authorized and issued, are fully paid and
nonassessable and were not issued in violation of or subject to any preemptive
rights. The Put Shares to be delivered on the Closing Date have been duly and
validly authorized and, when delivered by the Company in accordance with the
Equity Agreement, will be duly and validly issued, fully paid and nonassessable
and will not have been issued in violation of or subject to any preemptive
rights. The rights, preferences and privileges of the Put Shares are as stated
in the Certificate of Determinations duly filed with the Secretary of State of
the State of Delaware. The Capital Shares and the Put Shares conform to the
descriptions thereof contained in the Registration Statement and the Prospectus.

     3. To our knowledge, there are no lawsuits or proceedings pending or, to
our knowledge, threatened, against the Company, of a character required to be
disclosed in the Registration Statement and the Prospectus, which have not been
properly disclosed therein.

     4. To our knowledge, all agreements, instruments, franchises, licenses or
permits required to be described in the Registration Statement and the
Prospectus or required to be filed as exhibits to the Registration Statements
have been so described and so filed.

     5. The Registration Statement and the Prospectus and any amendments thereof
or supplements thereto (other than the financial statements and schedules and
other financial data derived therefrom, as to which we express no opinion)
comply as to form in all material respects with the requirements of the Act.

                                     Page 1
<PAGE>

     6. The Registration Statement is effective under the Act, and, to our
knowledge, no stop order suspending the effectiveness of either of the
Registration Statement has been issued and no proceedings therefor have been
initiated or threatened by the SEC.

                                     Page 2
<PAGE>

                                    EXHIBIT F

                              OFFICER'S CERTIFICATE
                                       OF
                            INTERACTIVE TELESIS INC.

     Reference is made to the Equity Line of Credit Agreement (the "Equity
Agreement") and Registration Rights Agreement (the "Registration Rights
Agreement"), both dated as of November ___, 2000 by, and between Hambrecht &
Quist Guaranty Finance, LLC ("H&QGF") and Interactive Telesis Inc. (the
"Company").

     The undersigned, Donald E. Cameron, being the duly elected, qualified, and
authorized President and Chief Executive Officer of the Company, hereby
certifies as of the date hereof as follows:

          1. This Certificate is delivered pursuant to Section 7.2(k) of the
     Equity Agreement. Terms used and not defined herein shall have the meanings
     set forth in the Equity Agreement.

          2. All the representations and warranties of the Company in the Equity
     Agreement and in the Registration Rights Agreement are true and correct in
     all material respects as at the date hereof (except for representations and
     warranties specifically made as of a particular date).

          3. All of the conditions precedent to the right of the Company to
     issue and sell Put Shares in the Equity Agreement and other matters
     provided for in the Equity Agreement and Registration Rights Agreement
     which are required to have been complied with in connection with the
     Company's exercise of its right to sell Put Shares to H&QGF have been fully
     complied with in all material respects.

          IN WITNESS WHEREOF, I have hereunto set my hand to this Certificate
          as of this _____ day of _________________, 200__.

                                           _______________________________
                                           William R. Adams
                                           Secretary and Chief Financial Officer

                                     Page 1
<PAGE>

                                    EXHIBIT G

                           TRANSFER AGENT INSTRUCTIONS

November ____, 2000

PACIFIC CORPORATE TRUST
830-625 Howe Street
Vancouver, BC V6C 3B8
Attn:    Laurie Waddington

         Re:   Interactive Telesis Inc.

Ladies and Gentlemen:

     You are hereby irrevocably instructed from time to time upon transfer of
shares of our Common Stock issued upon conversion of shares of our Series ___
Preferred Stock (the "Registrable Securities") by Hambrecht & Quist Guaranty
Finance, LLC (the "Investor") to issue certificates evidencing such Registrable
Securities free of restrictive legends during the following periods and under
the following circumstances and with consultation by you with us or our counsel
and without the need for any further advice or instruction or documentation to
you by or from us or our counsel or the Investor.

         (a) At any time after the effective date of the Registration Statement
         on Form S-1, SB-2, or SB-2 under the Securities Act or such other form
         that the Company is elegible to use or that the SEC deems appropriate
         covering resale of the Registrable Securities (the "Registration
         Statement"), upon surrender of one or more certificates evidencing
         Registrable Securities that bear a restrictive legend referring to the
         Securities Act of 1933, as amended (the "Legend"), to the extent
         accompanied by a notice requesting the issuance of new certificates
         free of the Legend to replace those surrendered; provided that (i) the
         Registration Statement shall then be effective and (ii) if reasonably
         requested by you, the Investor confirms to you that the Investor has
         complied with the prospectus delivery requirement of the Securities
         Act.

At any time upon any surrender of one or more certificates evidencing
Registrable Securities that bear the Legend, to the extent accompanied by a
notice requesting the issuance of new certificates free of the Legend to replace
those surrendered and containing representations that (i) the Investor is
permitted to dispose of such Registrable Securities without limitation as to
amount or manner of sale pursuant to Rule 144(k) under the Securities Act or
(ii) the Investor has sold, pledged or otherwise transferred or agreed to

                                     Page 1
<PAGE>

sell, pledge or otherwise transfer such Registrable Securities in a manner other
than pursuant to an effective registration statement, to a transferee who shall
upon such transfer be entitled to freely tradable securities.

                       Sincerely yours,

                       INTERACTIVE TELESIS INC.

                       By: ____________________________________

                       Title: _________________________________

cc:   Hambrecht & Quist Guaranty Finance, LLC

                                     Page 2

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