HOMESEEKERS COM INC, 10QSB, 1999-11-15

HOMESEEKERS COM INC
10QSB, 1999-11-15
COMPUTER INTEGRATED SYSTEMS DESIGN

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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-QSB

(Mark One)
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1999

{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from
____________________to________________

Commission File Number: 0-23835

HOMESEEKERS.COM, INCORPORATED
-----------------------------
(Exact name of small business issuer as specified in its charter)

NEVADA 87-0397464
- ------ ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)

6490 S. MCCARRAN BOULEVARD, SUITE 28, RENO, NV 89509
----------------------------------------------------
(Address of principal executive offices)

(775) 827-6886
--------------
(Issuer's telephone number)

2241 PARK PLACE, SUITE E, MINDEN NV 89423
-----------------------------------------
(Former address, if changed since last reports)

Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

YES [X] NO_____

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 16,754,262 shares of common
stock, $.001 par value, outstanding as of November 5, 1999.

HOMESEEKERS.COM, INCORPORATED
TABLE OF CONTENTS AND INFORMATION REQUIRED IN REPORT
Form 10-QSB for the quarter ended September 30, 1999

PART I FINANCIAL INFORMATION

Item 1 Financial Statements: Page
------
<S> <C> <C>
Consolidated Condensed Balance Sheets as of
September 30, 1999 and June 30, 1999 3

Consolidated Condensed Statements of Operations
for the quarters ended September 30, 1999 and 1998 5

Consolidated Condensed Statements of Cash Flows for
the quarters ended September 30, 1999 and 1998 6

Notes to the Consolidated Condensed Financial Statements 9

Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 12

PART II OTHER INFORMATION

Item 1 Legal Proceedings 15

Item 2 Changes in Securities and Use of Proceeds 15

Item 3 Defaults upon Senior Securities 15

Item 4 Submission of Matters to a Vote of Security Holders 15

Item 5 Other Information 15

Item 6 Exhibits and Reports on Form 8-K 15

SIGNATURES 16
</TABLE>

HOMESEEKERS.COM, INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in Thousands)

September 30, June 30,
1999 1999
---- ----
(Unaudited) (Audited)
<S> <C> <C>
ASSETS

Current Assets
Cash and cash equivalents $ 7,426 $10,617
Accounts receivable, net of allowance for uncollectible
accounts of $37 and $38 1,979 1,697
Accounts receivable, related parties 183 158
Notes receivable, related parties 214 125
Prepaid expenses 806 309
------- -------
Total Current Assets 10,608 12,906

Investments, related party stock 400 400
Other investments 3,000 --
Property and equipment, net 3,893 1,170
Goodwill and other intangible assets net of
accumulated amortization of $786 and $602 12,811 2,377
Other assets 214 36
------- -------
Total Assets $30,926 $16,889
======= =======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable $ 290 $ 630
Accrued liabilities 559 454
Current portion of capital lease obligations 52 26
Notes payable 55 --
Notes payable - related party -- 13
Deferred revenue 3,061 2,693
------- -------
Total Current Liabilities 4,017 3,816
------- -------

See notes to consolidated condensed financial statements.
(Continued)

<PAGE>

HOMESEEKERS.COM, INCORPORATED
CONSOLIDATED CONDENSED BALANCE SHEETS
(Amounts in Thousands, Except Share Data)
(Continued)

September 30, June 30,
1999 1999
---- ----
(Unaudited) (Audited)
<S> <C> <C>

Long-Term Liabilities
Capital lease obligations 93 50
Notes payable 75 --
Deferred revenue 83 333
-------- --------
Total Long-Term Liabilities 251 383
-------- --------

Stockholders' Equity
Class A preferred stock, $.001 par value;
5,000,000 shares authorized; no shares
issued and outstanding -- --
Class B preferred stock, $10.00 par value;
200,000 shares authorized; no shares
issued and outstanding -- --
Common stock, $.001 par value; 50,000,000 shares
authorized; 16,691,018 and 14,946,283
shares issued and outstanding 17 15
Additional paid in capital 44,940 28,337
Investment in LLC (450) (450)
Accumulated deficit (17,849) (15,212)
-------- --------
Total Stockholders' Equity 26,658 12,690
-------- --------

Total Liabilities and Stockholders'
Equity $ 30,926 $ 16,889
======== ========
</TABLE>
See notes to consolidated condensed financial statements.

4
<PAGE>
<TABLE>
<CAPTION>

HOMESEEKERS.COM, INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED SEPTEMBER 30, 1999 and 1998
(Unaudited)
(Amounts in Thousands, Except Share Data)

1999 1998
---- ----
<S> <C> <C>
Revenues $ 1,443 $ 375

Cost of Revenues 369 84
------------ ------------

Gross Profit 1,074 291

Operating Expenses 3,825 1,248
------------ ------------

Loss from Operations (2,751) (957)

Other Income (Expense):
Interest Expense (1) (6)
Investment Income 114 --
------------ ------------

Loss Before Provision for Income Taxes (2,638) (963)

Income Tax Expense -- --
------------ ------------

Net Loss (2,638) (963)

Other Comprehensive Income -- --
------------ ------------

Net Comprehensive Loss $ (2,638) $ (963)
============ ============

Basic and Diluted Net Loss per Common Share $ (.17) $ (.14)
============ ============

Shares Used in Computing Basic and Diluted
Per Share Data 15,136,676 7,594,810
============ ============
</TABLE>
See notes to consolidated condensed financial statements.

HOMESEEKERS.COM, INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE QUARTERS ENDED SEPTEMBER 30, 1999 and 1998
(Unaudited)
(Amounts in Thousands)

1999 1998
----------- -----------
<S> <C> <C>
Operating Activities
Net Loss $ (2,638) $ (963)
-------- --------
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation and amortization 270 83
Loss on investments -- 5
Common stock issued for employee compensation -- 16
Common stock issued for interest -- 1
Decrease in bad debt allowance (1) --
Changes in operating assets and liabilities net of
effects from acquisitions
Accounts receivable 61 109
Accounts receivable, related parties (123) --
Inventories -- (11)
Prepaid expenses (478) (12)
Other assets (67) (45)
Accounts payable (487) 98
Accrued liabilities 214 51
Deferred revenue 118 63
-------- --------
Net adjustments (493) 358
-------- --------
Net Cash Used in Operating Activities (3,131) (605)
-------- --------
Investing Activities
Purchase of property and equipment (171) (34)
Increase in other assets (166) --
Purchase of intangible assets (499) --
Acquisitions, net of cash acquired (173) --
Issuance of note receivable -- (50)
-------- --------
Net Cash Used in Investing Activities (1,009) (84)
-------- --------
Financing Activities
Proceeds from capital lease obligations 7 --
Proceeds from notes payable - related parties 25 40
Payments on notes payable - related parties -- (5)
Proceeds from notes payable -- 250
Net proceeds from sale of common stock 917 434
-------- --------

Net Cash Provided by Financing Activities 949 719
-------- --------

Net (Decrease) Increase in Cash and Cash Equivalents (3,191) 30

Cash and Cash Equivalents at Beginning of Period 10,617 198
-------- --------

Cash and Cash Equivalents at End of Period $ 7,426 $ 228
======== ========

(Continued)
</TABLE>

See notes to consolidated condensed financial statements.

<PAGE>

HOMESEEKERS.COM, INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE QUARTERS ENDED SEPTEMBER 30, 1999 and 1998
(Unaudited)
(Continued)

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION :
<TABLE>
<CAPTION>

(Amounts in Thousands) 1999 1998
---- ----
<S> <C> <C>
Cash paid for interest $ 1 $ 1
============== =============

Cash paid for income taxes $ - $ -
============== =============
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

1999
- ----

During the quarter ended September 30, 1999, accrued liabilities in the amount
of $200,000 were satisfied by the issuance of 25,000 shares of the Company's
common stock.

During the quarter ended September 30, 1999, the Company purchased intangible
assets for $262,320 by issuing 28,000 shares of the Company's common stock.

During the quarter ended September 30, 1999, the Company purchased intangible
assets by issuing 25,000 shares of the Company's common stock valued at
$215,625.

During the quarter ended September 30, 1999, the Company acquired IMCO. The
consideration paid was $1,000,000 consisting of 81,090 shares of the Company's
common stock.

During the quarter ended September 30, 1999, the Company purchased 1,200,000
common shares of BuySellBid.com, Inc. for 250,000 shares of the Company's common
stock valued at $3,000,000.

During the quarter ended September 30, 1999, the Company acquired intangible
assets from BuySellBid.com, Inc. for 257,615 shares of the Company's common
stock valued at $3,091,000.

During the quarter ended September 30, 1999, the Company acquired Terradatum.
The consideration paid included 640,000 shares of the Company's common stock
valued at $7,960,000.

(Continued)

See notes to consolidated condensed financial statements.

<PAGE>

HOMESEEKERS.COM, INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE QUARTERS ENDED SEPTEMBER 30, 1999 and 1998
(Unaudited)

1998
- ----

During the quarter ended September 30, 1998, accrued liabilities in the amount
of $50,000 were satisfied by the issuance of 20,000 shares of the Company's
common stock.

During the quarter ended September 30, 1998, $85,000 of debt was converted into
42,500 shares of the Company's common stock.

See notes to consolidated condensed financial statements.

<PAGE>

HOMESEEKERS.COM, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1 - BASIS OF PRESENTATION
- ------------------------------

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and the instructions to Form 10-QSB. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. All adjustments that, in the opinion of
management, are necessary for a fair presentation of the results of operations
for the interim periods have been made and are of a recurring nature unless
otherwise disclosed herein. The results of operations for the quarter ended
September 30, 1999 are not necessarily indicative of the results that will be
realized for a full year. For further information, refer to the financial
statements and notes thereto contained in the Company's Annual Report on Form
10-KSB for the year ended June 30, 1999.

Certain prior period amounts have been reclassified to conform to the
current period's presentation.

NOTE 2 - EQUITY TRANSACTIONS
- ----------------------------

During the quarter ended September 30, 1999, the Company received approximately
$723,000 from the exercise of warrants to purchase 309,280 shares of the
Company's common stock and approximately $193,000 from the exercise of options
to purchase 128,250 shares of the Company's common stock.

NOTE 3 - ACQUISITIONS
- ---------------------

Terradatum

On September 30, 1999, the Company acquired 100% of Terradatum, a developer,
marketer, and licensor of Internet based multiple listing service systems.
Consideration consisted of 640,000 shares of the Company's common stock valued
at approximately $7,960,000 based on the approximate fair market value of the
common stock at the closing date, and $200,000 in cash. The Company also
incurred $54,000 of related professional fees. The acquisition agreement calls
for additional cash consideration if the market price of the Company's common
stock is below certain levels prior to the first anniversary of the closing
date. The acquisition was accounted for using the purchase method of accounting
and accordingly, the purchase price was allocated to the net assets acquired
based upon their estimated fair values as of the acquisition date. A preliminary
allocation of the purchase price resulted in approximately $6,466,000 of
goodwill, which is being amortized over 5 years. The fair values of assets
acquired and liabilities assumed were approximately $8,405,000 and $191,000,
respectively.

9
<PAGE>

HOMESEEKERS.COM, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

IMCO

On September 30, 1999, the Company completed its acquisition of IMCO, a provider
of electronic publishing and software development for the real estate listing
management industry. The purchase price consisted of 81,090 shares of the
Company's common stock valued at $1,000,000, based on the average closing price
of the stock in specified days preceding the closing date. The merger agreement
provides for additional consideration payable in the Company's common stock
depending on the closing prices of the Company's common stock on specified days
preceding the first and second anniversaries of the closing date. The sellers
may also receive additional common shares if they resell their shares below the
initial average closing price during established periods. The acquisition was
accounted for using the purchase method of accounting. A preliminary allocation
of the purchase price resulted in no goodwill and approximately $918,000 of
computer software, which is being amortized over 3 years. The fair values of
assets acquired and liabilities assumed were approximately $1,221,000 and
$221,000, respectively.

Pro Forma Information

The following unaudited pro forma information presents the results of operations
of the Company for the quarters ended September 30, 1999 and 1998 as if the
Terradatum, IMCO and Holloway Publications, Inc. (completed May 28, 1999)
acquisitions had taken place on July 1, 1998 (in thousands, except per share
data):

September 30, September 30,
1999 1998

Revenues $ 2,296 $ 1,375
======= =======
Net Loss $(3,021) $(1,673)
======= =======
Net Loss Per Common Share:
Basic and Diluted $ (.19) $ (.20)
======= =======

These pro forma results of operations have been prepared for comparative
purposes only and may not be indicative of the results of operations had the
acquisitions occurred on the date indicated or of future results of operations
of the Company.

<PAGE>

HOMESEEKERS.COM, INCORPORATED
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

NOTE 4 - AGREEMENTS WITH BUYSELLBID.COM
- ----------------------------------------

On September 30, 1999, the Company signed an agreement with BuySellBid.com, Inc.
for the Company to serve as the exclusive provider of residential real estate,
apartments for rent, resort, foreclosure and commercial listings and information
for the BuySellBid.com web sites and web and portal sites covering approximately
470 radio stations owned by Clear Channel Communications Inc. In addition, for a
period of 18 months BuySellBid.com will provide the Company banner advertising
on such web and portal sites. Total consideration paid by the Company consisted
of $1,000,000 in cash and 257,615 common shares valued at approximately
$3,100,000. The Company will be required to deliver additional common shares if
the average closing price of the shares during a specified period preceding the
date they are registered under the Securities Act of 1933 is less than
$3,100,000. The purchase price was substantially allocated to intangible assets,
which are being amortized over periods from 18 month to 3 years.

On September 30, 1999, the Company also purchased 1,200,000 shares, representing
approximately 4%, of BuySellBid.com's common stock. The consideration paid by
the Company consisted of 250,000 shares of its common stock valued at
$3,000,000.

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Results of Operations

Revenues for the quarter ended September 30, 1999 increased 285% to $1,443,000
from $375,000 for the quarter ended September 30, 1998. The increase of
$1,068,000 is attributable to increased sales of web sites and web pages to real
estate agents as the Company significantly expanded its sales efforts, revenues
from Holloway Publications, Inc., which was acquired on May 28, 1999, and
increased prospect revenues from the HomeSeekers.com site and Realty 2000
product.

Costs of revenues increased from $84,000 in the quarter ended September 30, 1998
to $369,000 in the quarter ended September 30, 1999 in support of the higher
sales levels. The gross profit percentage declined from 78% in the quarter ended
September 30, 1998 to 74% in the quarter ended September 30, 1999 primarily due
to the inclusion of the lower margin services of the Holloway Publications
business.

Operating expenses increased 206% from $1,248,000 in the quarter ended September
30, 1998 to $3,825,000 in the comparable quarter in 1999. The Company has
increased its expenditures on sales and marketing activities associated with the
sale of web sites, web pages, and the new Internet-based Multiple Listing
Service software. Brand marketing has been increased through television
advertising and the distribution of free Internet Marketing Kits to real estate
professionals. In addition, administrative costs have increased to support this
increased activity.

Interest income increased to $114,000 for the quarter ended September 30, 1999
through the investment of proceeds from the Company's private placements of
common stock during the first half of calendar year 1999.

The Company's net loss increased from $963,000 in the quarter ended September
30, 1998 to $2,638,000 in the comparable period of 1999 due to the dollar growth
in operating expenses outpacing the dollar revenue growth.

During the quarter ended September 30, 1999, the Company's goodwill and other
intangible assets, net of accumulated amortization, increased by $10,434,000.
The Company reviews its intangibles and other long-lived assets periodically in
accordance with Statement of Financial Accounting Standard ("SFAS") No. 121,
Accounting for the Impairment of Long-Lived Assets to be Disposed of, to
determine potential impairment by comparing the carrying value of the assets
with estimated undiscounted future cash flows expected to result from the use of
the assets, including cash flows from disposition. Based on this analysis, if
the sum of the expected future undiscounted net cash flows is less than its
carrying value, the Company will determine whether an impairment loss should be
recognized.

Liquidity and Capital Resources

At September 30, 1999 the Company's cash balance was $7,426,000, a decrease of
$3,191,000 from June 30, 1999. The decrease results primarily from negative cash
flows from operations and the cash portion of the payments to BuySellBid in
connection with the transactions described in Item 1 above, partially offset by
proceeds from stock warrant and option exercises. The Company currently
anticipates that it will require additional cash to fund its operations and
investment plans during fiscal 2000. In the past the Company has funded its cash
flow deficit through the issuance of equity securities and warrants to purchase
equity securities. The Company plans to fund its upcoming liquidity requirements
in a similar manner.

12
<PAGE>

The Company has experienced negative cash flows from operations since inception.
Operations have been funded through cash provided by operating activities and
sales of equity securities. The ability of the Company to meet its liquidity
requirements is predicated upon the Company's ability to access the public and
private equity markets at acceptable prices and rates. Additional financing may
not be available on terms acceptable to the Company, or at all. If the Company
is unable to raise sufficient capital to fund its liquidity requirements during
fiscal 2000, there would be a material adverse effect on its business, financial
results and results of operations.

New Accounting Standards

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities". The effective date of SFAS 133 has been
delayed to fiscal years beginning after June 15, 2000. Since the Company does
not have any derivative instruments and has not engaged in any hedging
activities, it is not anticipated that this pronouncement will have an impact on
the Company's consolidated financial statements.

Impact of the Year 2000

The Company has assessed the effect of Year 2000 issues on its information
technology, including computer hardware, software and embedded chip technology.
Remediation has been completed where necessary on all systems with the exception
of a legacy sales renewal database whose data is currently being transferred to
an existing more advanced sales system. The Company's Realty 2000 product has
been upgraded to be Year 2000 compliant. The Company has communicated with
suppliers, customers, financial institutions and others with whom it conducts
business transactions to assess whether they are Year 2000 compliant. At this
time, we have not found any material deficiencies in significant vendors' or
customers' computer operations. Additionally, the Company believes that the
multiple listing services real estate listings that the Company aggregates on
its HomeSeekers.com Internet site should not be materially affected by the Year
2000 dating problem.

The Company is not aware of any specific issues which would have a material
effect on its operations, liquidity or financial condition. An interruption of
Internet or telecommunications services for an extended period of time would
prevent the Company from providing service to a substantial portion of its
customers, resulting in a material loss of revenue. A protracted "crash" of its
internal networking and operating software would also result in a material loss
of revenue as well as an interruption of research and development activities.
This scenario could also result in financial systems not operating properly,
which could hinder its ability to collect revenue and comply with financial

13
<PAGE>

reporting requirements. However, at this time, the Company does not anticipate
that the financial impact of the Year 2000 issues will have a material adverse
effect on its business, financial condition or results of operations.

The Company believes that the costs for evaluating and addressing Year 2000
issues relating to its internal and commercial software and hardware will be
less than $40,000. Costs to address Year 2000 issues with third parties have not
been estimated, though it is expected that a substantial portion of such costs
would be borne by the respective third parties.

At present the Company does not have a formal contingency plan related to
internal or third party Year 2000 issues. The Company continues to monitor the
final status of work and third party issues to determine if such a plan is
necessary.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Form 10-QSB regarding matters that are not
historical facts are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve risks and uncertainties, and actual results may differ
materially from those expressed or implied by such forward-looking statements.
All statements that address operating performance, liquidity issues, Year 2000
issues or events or developments that management expects or anticipates to occur
in the future, including statements relating to sales and earnings growth or
statements expressing general optimism about future operating results, are
forward-looking statements. These forward-looking statements are based on
management's current views and assumptions regarding future events and operating
performance. Many factors could cause actual results to differ materially from
estimates contained in management's forward-looking statements. Some of these
factors are adverse economic conditions, competitive pressures, inadequate
capital, changes in interest rates that adversely affect the real estate market,
changes in the market value of the Company's equity securities, the Company's
ability to access the public or private markets for equity securities,
availability of alternative financing sources, difficulties associated with
integrating the operations of acquired companies and businesses with the
Company's operations, unanticipated expenses, seasonal fluctuations and other
volatility in the Company's operating results, inability to carry out marketing
and sales plans and loss of key executives.

<PAGE>

PART II OTHER INFORMATION

Item 1 Legal Proceedings

The Company is not involved in any legal proceedings that it believes
individually or in the aggregate will have a material adverse effect on the
Company's business, financial condition or results of operations. A complaint
has been filed in the United State District Court for the Eastern District of
Washington against the Company by HomeSeekers Magazine, Inc. that alleges
violations of claimed trademark rights in certain real estate markets in
Washington and Idaho. Although the Company believes that it has meritorious
defenses to this claim, the Company has had discussions with HomeSeekers
Magazines regarding possible settlement. A possible settlement may involve the
issuance of shares of the Company's common stock. There can be no assurance that
the Company will be able to settle this claim or that the terms of any
settlement will be favorable to the Company.

Item 2 Changes in Securities and Use of Proceeds

During the quarter ended September 30, 1999, the Company issued 309,280
shares of its common stock upon the exercise of outstanding warrants to purchase
common stock for an aggregate exercise price of $722,560. These shares of common
stock were issued to the warrantholders pursuant to the exemption from the
registration requirements of the Securities Act of 1933 (the "Securities Act")
provided by Section 4(2) thereof.

On July 31, 1999, the Company issued 25,000 shares of its common stock
in satisfaction of $200,000 of accrued liabilities. These shares of common stock
were issued to Terry Pullan pursuant to the exemption from registration
requirements of the Securities Act provided by Section 4(2) thereof.

On July 31, 1999, the Company issued 28,000 shares of its common stock
to Real Estate Technology Institute Inc. (RETI), together with $40,000 in cash,
in exchange for certain customer contracts valued at $262,320. These shares of
common stock were issued to RETI pursuant to the exemption from the registration
requirements of the Securities Act provided by Section 4(2) thereof.

On September 30, 1999, the Company issued 25,000 shares of its common
stock, together with $50,000 in cash, in exchange for certain training programs
valued at $265,625. These shares of common stock were issued to Clifford Baird
pursuant to the exemption from registration requirements of the Securities Act
provided by Section 4(2) thereof.

On September 30, 1999, the Company issued 81,090 shares of its common
stock to the shareholders of Real Estate Information, Inc. (referred to as
"IMCO") in connection with the Company's acquisition of IMCO. The acquisition of
IMCO was valued at $1,000,000. These shares of common stock were issued to the
shareholders of Real Estate Information, Inc., pursuant to the exemption from
registration requirements of the Securities Act provided by Section 4(2)
thereof.

On September 30, 1999, the Company issued 250,000 shares of its common
stock to BuySellBid.com, Inc. ("BuySellBid"), in exchange for 1,200,000 shares
of BuySellBid common stock valued at $3,000,000. These shares of common stock
were issued to BuySellBid pursuant to the exemption from registration
requirements of the Securities Act provided by Section 4(2) thereof.

On September 30, 1999, the Company issued 257,615 shares of its common
stock to BuySellBid, together with $1,000,000 in cash, in exchange for certain
provider rights and prepaid advertising valued at $4,091,380. These shares of
common stock were issued to BuySellBid pursuant to the exemption from
registration requirements of the Securities Act provided by Section 4(2)
thereof.

On September 30, 1999, the Company issued 640,000 shares of its common
stock, and paid $200,000 in cash to the members of Terradatum in connection with
the Company's acquisition of Terradatum for an aggregate purchase price of
$8,160,320. These shares of common stock were issued to the members of
Terradatum pursuant to the exemptions from registration requirements of the
Securities Act provided by Section 4(2) thereof.

Item 3 Defaults upon Senior Securities

None

Item 4 Submission of Matters to a Vote of Security Holders

None

Item 5 Other Information

None

Item 6 Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit No. Description
- ----------- -----------
10.1 Exclusive Provider and Advertising Agreement, dated as
of September 30, 1999, between Homeseekers.com,
Incorporated and BuySellBid.com, Inc.

10.2 Stock Purchase Agreement dated as of September 30,
1999, between Homeseekers.com, Incorporated and
BuySellBid.com, Inc.

(b) Reports on Form 8-K

Current report on Form 8-K/A1 filed on August 6, 1999 reporting Item 2
(Acquisition or Disposition of Assets) and Item 7 (Financial Statements, Pro
Forma Financial Information, and Exhibits): Financial Statements of Holloway
Publications, Inc. for the periods specified in Rule 3-05(b) of Regulation S-X
and Pro Forma Financial Information required pursuant to Article II of
Regulation S-X.

15
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned as duly authorized.

HomeSeekers.com, Incorporated
(Registrant)

/s/ Gregory L. Costley /s/ James A. Dykstra
- ----------------------------- --------------------------
Gregory L. Costley James A. Dykstra
Chairman of the Board Chief Financial Officer
Chief Executive Officer
Secretary/Treasurer

Dated: November 15, 1999

AGREEMENT entered into as of the 30th day of September 1999, by and
between BuySellBid.com, Inc., a Delaware corporation, formerly known as InXsys
Broadcast Networks, Inc. ("BuySellBid") and HomeSeekers.com, Incorporated, a
Nevada corporation ("HomeSeekers").

W I T N E S S E T H:

WHEREAS, HomeSeekers is an Internet-related company, engaged in
providing products and services to the real estate marketplace; and

WHEREAS, BuySellBid provides products and services related to online
classified advertising; and

WHEREAS, HomeSeekers desires to purchase Internet classified
advertising from BuySellBid, and BuySellBid desires to provide classified
advertising to HomeSeekers, all upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual promises and covenants
herein set forth, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:

1. Appointment of Exclusive Provider. For a period of three years from the
Effective Date of this Agreement (as hereinafter defined), BuySellBid hereby
designates HomeSeekers as the exclusive provider to BuySellBid of residential
real estate, apartments for rent, resort, foreclosure and commercial listings
and information (the "Real Estate Listings"). The exclusive designation set
forth in the preceding sentence shall not apply to "For Sale By Owner" listings
or to advertisements. Notwithstanding the foregoing, BuySellBid shall not be
precluded from posting listings for apartments provided by parties other than
HomeSeekers, until such time as HomeSeekers includes apartments in its Real
Estate Listings.

2. Real Estate Listings.

1. For so long as HomeSeekers serves as the exclusive provider of Real
Estate Listings pursuant to this Agreement, BuySellBid hereby agrees to cause
HomeSeekers' Real Estate Listings to be available for viewing on Internet Web
and portal sites owned, controlled and/or maintained by BuySellBid (the
"BuySellBid Sites"), as well as Web and portal sites covering the approximately
470 radio stations owned by Clear Channel Communications Inc. (the "Clear
Channel Sites").

2. BuySellBid hereby represents and warrants to HomeSeekers that (i)
BuySellBid is a party to a written agreement (the "Clear Channel Agreement")
with Clear Channel Communications Inc. ("Clear Channel"), pursuant to which

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BuySellBid has acquired the legally enforceable exclusive right to provide
classified advertisements on all of Clear Channel's Web sites, (ii) BuySellBid
has performed all of its obligations to Clear Channel under the Clear Channel
Agreement, (iii) Clear Channel has performed all of its obligations to
BuySellBid under the Clear Channel Agreement and (iv) the exclusive rights of
BuySellBid under the Clear Channel Agreement terminate on September 23, 2002. A
copy of the Clear Channel Agreement has been provided to HomeSeekers.

3. BuySellBid hereby agrees to use its best efforts to promote
HomeSeekers' Real Estate Listings on all of the BuySellBid Sites and the Clear
Channel Sites (collectively, the "Web Sites").

4. For so long as HomeSeekers serves as the exclusive provider of Real
Estate Listings pursuant to this Agreement, BuySellBid hereby agrees to comply
with the terms and conditions of the Clear Channel Agreement and to take no
action or fail to take action that could result in a violation of the Clear
Channel Agreement.

5. HomeSeekers' Real Estate Listings are and shall remain the sole and
exclusive property of HomeSeekers and BuySellBid may use HomeSeekers' Real
Estate Listings solely for the purposes of this Agreement.

6. In connection with the availability of HomeSeekers' Real Estate
Listings through the Web Sites:

1. HomeSeekers shall program and/or prepare and present to
BuySellBid, a real estate site in a format that complements the
current "ClassiFIND" look and feel used by BuySellBid on the Web
Sites. HomeSeekers' Real Estate Listings shall be presented on
this site only;

2. HomeSeekers shall control all broker/agent "real estate
finder" functions on the Web Sites; and

3. BuySellBid agrees to establish "real estate agent finder
position" on all Web Sites.

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3. Compensation to BuySellBid.

1. For its services hereunder, HomeSeekers shall pay to BuySellBid,
within three business days following the Effective Date of this Agreement, the
sum of $4,091,380.00, as follows:

1. the sum of $1,000,000, by wire transfer or other form of
payment mutually satisfactory to the parties; and

2. the sum of $3,091,380 by delivery to BuySellBid of 257,615
shares of the common stock of HomeSeekers, $.001 par value per
share ("HMSK Common Stock"), registered in the name of BuySellBid
(the "HMSK Shares"). The number of HMSK Shares was determined by
(A) dividing 3,091,380, by (B) $12.

2. On or prior to January 31, 2000, HomeSeekers agrees to file a
registration statement on Form S-3 under the Act, or, in the event Form S-3 is
not available to HomeSeekers, then on another applicable form, for the purpose
of registering the HomeSeekers Shares under the Act, for resale by BuySellBid.
HomeSeekers agrees to use its reasonable best efforts to cause such registration
statement to become effective as soon thereafter as is practicable. The costs of
preparing and filing such registration statement shall be borne by HomeSeekers.
Resale of the HMSK Shares shall be subject to BuySellBid's covenant set forth in
Section 3(5), below.

3. BuySellBid shall furnish such information as may reasonably be
requested by HomeSeekers in order to enable it to register the HMSK Shares as
contemplated by this Agreement. BuySellBid shall comply with all applicable
securities laws in connection with any resale of the HMSK Shares by it.

4. If the value of the shares delivered under Section 3 (1) (2) above
on the date they are first registered and the registration becomes effective is
less than $3,091,380, HomeSeekers will deliver to BuySellBid the amount of
additional shares necessary so that the total value of shares delivered under
Section 3(1)(2) above and this section is $3,091,380. For purposes of valuing
the shares, the applicable number of shares will be multiplied by the average
closing price of the HMSK Common Stock on the NASDAQ on five trading days
preceding the date the registration statement becomes effective.

5. Following registration of the HMSK Shares being issued to BuySellBid
pursuant to this Agreement, BuySellBid hereby covenants and agrees that it will
limit the number of HMSK Shares it sells during any trading day to no more than
25% of the trading volume of shares of HMSK Common Stock for the preceding
trading day. The daily number of shares that may be sold by BuySellBid includes
all other shares of HMSK Common Stock that are publicly sold by BuySellBid on
such day.

<PAGE>

6. BuySellBid understands that HMSK Common Stock is a class of equity
securities registered under Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). BuySellBid hereby covenants and agrees that it
will file with the SEC and other applicable regulatory authorities, all reports
and other information required to be filed by it in connection with its
acquisition and/or disposition of the HMSK Shares.

4. Branded Advertising. For a period of 18 months from the Effective Date
of this Agreement:

1. The parties agree that HomeSeekers' Real Estate Listings for
apartments shall be promoted, with HomeSeekers' apartment branding, directly on
the Clear Channel Sites through advertising on one-third of BuySellBid's 120 X
90 pixel rotating ad banner, with HomeSeekers' apartment Real Estate Listings to
appear not less than 50% of the time on the BuySellBid banner space, with the
BuySellBid banner to be seen on at least 70% of all Web pages on the Clear
Channel Sites. It is understood by the parties that HomeSeekers' Real Estate
Listings does not currently include apartments. Until such time as HomeSeekers
does include apartments in its Real Estate Listings, HomeSeekers will promote
its real estate broker/agent finders directly on the Web pages of the Clear
Channel Sites, using the method described above for apartment listings.

2. HomeSeekers and BuySellBid shall cooperate to create the advertising
described in the preceding paragraph. The parties acknowledge and agree that
banner appearance and content is subject to acceptance by Clear Channel and its
stations, which acceptance will not be unreasonably withheld.

5. Representations and Warranties of BuySellBid Concerning the HMSK Shares.
BuySellBid hereby represents and warrants to HomeSeekers as follows:

1. BuySellBid understands that the HMSK Shares have not been registered
under the Securities Act of 1933, as amended (the "Act") or the securities laws
of any state, in reliance upon exemptions from the registration requirements of
the Act and such state laws. The issuance of the HMSK Shares has not been passed
upon or the merits thereof endorsed or approved by any Federal or state
regulatory authority.

2. BuySellBid is acquiring the HMSK Shares for its own account, for
investment purposes only, and not with a view towards the distribution or resale
of the HMSK Shares except in compliance with applicable Federal and state
securities laws. BuySellBid does not intend to dispose of all or any part of the
HMSK Shares, except in compliance with the provisions of the Act and applicable
state securities laws and understands that the HMSK Shares are being issued
pursuant to specific exemptions under the provisions of the Act, which
exemptions depend, among other things, upon compliance with the provisions of
the Act.

<PAGE>

3. BuySellBid has such knowledge and experience in financial,
investment and business matters that it is capable of evaluating the merits and
risks of its acquisition of the HMSK Shares.

4. BuySellBid (i) has adequate means of providing for its current
financial needs and known contingencies, and has no need for liquidity of its
investment in the HMSK Shares; and (ii) can afford (A) to hold the HMSK Shares
for an indefinite period of time, as may be required until the HMSK Shares may
be sold in compliance with applicable law, and (B) to sustain a complete loss of
the entire amount of its investment in the HMSK Shares.

5. BuySellBid has been afforded the opportunity to ask questions of,
and receive answers from the officers and/or directors of HomeSeekers concerning
the terms and conditions of this transaction and to obtain any additional
information, to the extent that HomeSeekers possesses such information or can
acquire it without unreasonable effort or expense, necessary to verify the
accuracy of the information furnished; and has availed itself of such
opportunity to the extent it considers it appropriate in order to permit it to
evaluate the merits and risks of an investment in the HMSK Shares. It is
understood that all documents, records and books pertaining to BuySellBid's
investment in the HMSK Shares have been made available for inspection, and that
the books and records of HomeSeekers will be available upon reasonable notice
for inspection by representatives of BuySellBid during reasonable business hours
at its principal place of business.

6. BuySellBid hereby agrees that the following or similar legend will
appear on each certificate evidencing the HMSK Shares:

"These securities have not been registered under the Securities Act of
1933, as amended, or under any state securities laws and may not be
sold or otherwise transferred or disposed of except pursuant to an
effective registration statement under the Act and any applicable state
securities laws, or an opinion of counsel satisfactory to counsel to
the issuer that such registration is not required."

6. Advertising Space and Revenue Sharing. For a period of 18 months from the
Effective Date of this Agreement:

1. The parties hereby agree that HomeSeekers will provide Real Estate
Listings to BuySellBid through category sites for BuySellBid and its strategic
partners. On such sites, BuySellBid will have the right to sell 70% of the
banner advertising space and HomeSeekers will have the right to sell 30% of such
banner advertising space. All revenues generated from such advertising shall be
distributed 70% to BuySellBid and 30% to HomeSeekers. To the extent that
advertising space is not sold, each of the parties shall have the right to
include its own banner advertising, in the same relative proportions.

2. HomeSeekers hereby agrees to create a Web site for BuySellBid, which
will contain a vertical navigation bar area. BuySellBid and its media partners

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will have the right to sell 70% of the advertising and HomeSeekers 30% of the
advertising, for viewing on such navigation bar. Any revenues derived from any
such advertising and/or links on these sites, shall be distributed 70% to
BuySellBid and 30% to HomeSeekers.

3. The parties agree and acknowledge that for purposes of this Section
6, banner advertising revenues shall not include banner advertising revenues
derived from sales by Clear Channel or other radio stations.

4. HMSK agrees that it will not promote its Internet site on any radio
station that has contracted with BuySellBid to provide such radio station with
classified advertisements for real estate, including apartments for rent,
listings.

7. Miscellaneous.

1. Survival of Representations and Warranties. All of the
representations and warranties of the parties contained in this Agreement shall
survive the Closing for a period of one year.

2. No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the parties and their respective
successors and permitted assigns.

3. Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the parties and supersedes
any prior understandings, agreements, or representations by or between the
parties, written or oral, to the extent they related in any way to the subject
matter hereof.

4. Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their respective successors
and permitted assigns. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other party.

5. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

6. Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

7. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be addressed to the intended recipient as
set forth below:

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<PAGE>

If to BuySellBid: BuySellBid.com, Inc.
921 14th Avenue
Longview, WA 98632
Facsimile No.: (360) 425-3419
Attention: Jay Shepard and Gene Hill

If to HomeSeekers: HomeSeekers.com, Incorporated
6490 S. McCarran Blvd., Suite D-28
Reno, Nevada 89509
Facsimile No.: (775) 827-8182
Attention: Greg Costley and Jim Dykstra

Any party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using United
States Mail, personal delivery, expedited courier, messenger service or
facsimile, and such notice, request, demand, claim, or other communication shall
be deemed to have been duly given (i) three days following delivery to an
authorized United States Postal Office receptacle, (ii) upon facsimile
transmission, provided that electronic confirmation of receipt is retained by
the transmitting party, or (iii) upon receipt, if by personal delivery, courier
or messenger service. Any party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other party notice in the manner herein set forth.

8. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Nevada without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Nevada or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Nevada. The parties
further: (i) agree that any legal suit, action or proceeding arising out of or
relating to this Agreement shall be instituted exclusively in any court of
competent jurisdiction within the County of Washoe, State of Nevada or in the
United States District Court for the District of Nevada, Northern Division, (ii)
waive any objection that they may have now or hereafter to the venue of any such
suit, action or proceeding, and (iii) irrevocably consent to the in personam
jurisdiction of any court of competent jurisdiction within the County of Washoe,
State of Nevada, and the United States District Court for the District of
Nevada, Northern District in any such suit, action or proceeding. The parties
each further agree to accept and acknowledge service of any and all process
which may be served in any such suit, action or proceeding in a court of
competent jurisdiction within the County of Washoe, State of Nevada or in the
United States District Court for the District of Nevada, Northern Division, and
that service of process upon the parties mailed by certified mail to their
respective addresses shall be deemed in every respect effective service of
process upon the parties, in any action or proceeding.

9. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
parties hereto. No waiver by any party of any default, misrepresentation, or

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<PAGE>

breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.

10. Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

11. Expenses. Each of the parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.

12. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.

13. Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.

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

BuySellBid.com, Inc.

By:_____________________________
Name: Jay Shepard
Its: Chief Executive Officer

HomeSeekers.com, Incorporated

By:_____________________________
Name: Greg Costley
Its: Chief Executive Officer

AGREEMENT entered into as of the 30th day of September 1999, by and
between BuySellBid.com, Inc., a Delaware corporation, formerly known as InXsys
Broadcast Networks, Inc. ("BSB") and HomeSeekers.com, Incorporated, a Nevada
corporation ("HMSK").

W I T N E S S E T H:

WHEREAS, HMSK is authorized to issue 50,000,000 shares of common stock,
$.001 par value per share ("HMSK Common Stock"), of which, 16,030,028 shares are
issued and outstanding as of the date hereof; and

WHEREAS, BSB is authorized to issue 100,000,000 shares of common stock,
$.01 par value per share ("BSB Common Stock"), of which, 28,893,844 shares are
issued and outstanding as of the date hereof; and

WHEREAS, HMSK desires to acquire shares of the authorized but unissued
shares of BSB Common Stock, upon the terms and conditions hereinafter set forth;
and

WHEREAS, BSB desires to acquire shares of the authorized but unissued
shares of HMSK Common Stock, upon the terms and conditions hereinafter set
forth; and

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

1. Subscription; Acceptance; Payment; Issuance of Shares.

1. Subscription. HMSK hereby subscribes to purchase 1,200,000 shares of
BSB Common Stock (the "BSB Shares"), for a purchase price of $3,000,000, or
$2.50 per share, subject to adjustment as hereinafter provided (the "Purchase
Price").

2. Acceptance. BSB hereby accepts the subscription of HMSK to purchase
the BSB Shares.

<PAGE>

3. Payment of Purchase Price. The Purchase Price for the BSB Shares
shall be paid by the issuance of 250,000 shares of HMSK Common Stock (the "HMSK
Shares"). The number of HMSK Shares was determined by (1) dividing 3,000,000, by
(2) $12. Within three business days following the Effective Date of this
Agreement (as hereinafter defined), the Purchase Price shall be paid by HMSK and
the BSB Shares shall be delivered to HMSK.

4. Adjustment to Purchase Price. In the event that BSB reduces the
purchase price for the shares of BSB Common Stock being offered pursuant to its
private placement memorandum dated July 15, 1999 (the "Private Offering"), then
the Purchase Price shall be adjusted to reflect the lowest price at which BSB
accepts subscriptions in connection with such Private Offering. In connection
with any such adjustment, HMSK shall continue to subscribe to purchase shares of
BSB Common Stock for a purchase price of $3,000,000, however, the number of BSB
Shares to be purchased shall be adjusted to reflect the decreased offering
price.

2. Representations and Warranties Concerning the BSB Shares and the HMSK
Shares.

1. Representations and Warranties of HMSK Concerning the BSB Shares.
HMSK hereby represents and warrants to BSB as follows:

1. HMSK understands that the BSB Shares have not been
registered under the Securities Act of 1933, as amended (the "Act") or the
securities laws of any state, in reliance upon exemptions from the registration
requirements of the Act and such state laws. The issuance of the BSB Shares has
not been passed upon or the merits thereof endorsed or approved by any Federal
or state regulatory authority.

2. HMSK is acquiring the BSB Shares for its own account, for
investment purposes only, and not with a view towards the distribution or resale
of the BSB Shares except in compliance with applicable Federal and state
securities laws. HMSK does not intend to dispose of all or any part of the BSB
Shares, except in compliance with the provisions of the Act and applicable state
securities laws and understands that the BSB Shares are being issued pursuant to
specific exemptions under the provisions of the Act, which exemptions depend,
among other things, upon compliance with the provisions of the Act.

3. HMSK meets all applicable requirements under Federal law to
qualify as an "accredited" investor.

4. HMSK (i) has adequate means of providing for its current
financial needs and known contingencies, and has no need for liquidity of its
investment in the BSB shares; and (ii) can afford (a) to hold the BSB Shares for
an indefinite period of time, as required, and (b) to sustain a complete loss of
the entire amount of its investment in the BSB Shares.

5. HMSK has been afforded the opportunity to ask questions of, and
receive answers from, the officers and/or directors of BSB concerning the terms
and conditions of this transaction and to obtain any additional information, to
the extent that BSB possesses such information or can acquire it without
unreasonable effort or expense, necessary to verify the accuracy of the
information furnished; and has availed itself of such opportunity to the extent
it considers it appropriate in order to permit it to evaluate the merits and
risks of an investment in the BSB Shares. It is understood that all documents,
records and books pertaining to HMSK's investment in the BSB Shares have been

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<PAGE>

made available for inspection, and that the books and records of BSB will be
available upon reasonable notice for inspection by representatives of HMSK
during reasonable business hours at its principal place of business.

6. HMSK hereby agrees that the following or similar legend will appear
on each certificate evidencing the BSB Shares:

2. Representations and Warranties of BSB Concerning the HMSK Shares.
BSB hereby represents and warrants to HMSK as follows:

1. BSB understands that the HMSK Shares have not been registered
under the Securities Act of 1933, as amended (the "Act") or the securities laws
of any state, in reliance upon exemptions from the registration requirements of
the Act and such state laws. The issuance of the HMSK Shares has not been passed
upon or the merits thereof endorsed or approved by any Federal or state
regulatory authority.

2. BSB is acquiring the HMSK Shares for its own account, for
investment purposes only, and not with a view towards the distribution or resale
of the HMSK Shares except in compliance with applicable Federal and state
securities laws. BSB does not intend to dispose of all or any part of the HMSK
Shares, except in compliance with the provisions of the Act and applicable state
securities laws and understands that the HMSK Shares are being issued pursuant
to specific exemptions under the provisions of the Act, which exemptions depend,
among other things, upon compliance with the provisions of the Act.

3. BSB has such knowledge and experience in financial, investment
and business matters that it is capable of evaluating the merits and risks of
its investment in the HMSK Shares.

4. BSB (i) has adequate means of providing for its current financial
needs and known contingencies, and has no need for liquidity of its investment
in the HMSK shares; and (ii) can afford (a) to hold the HMSK Shares for an
indefinite period of time, as may be required until the HMSK Shares may be sold
in compliance with applicable law, and (b) to sustain a complete loss of the
entire amount of its investment in the HMSK Shares.

5. BSB has been afforded the opportunity to ask questions of, and
receive answers from the officers and/or directors of HMSK concerning the terms
and conditions of this transaction and to obtain any additional information, to
the extent that HMSK possesses such information or can acquire it without

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<PAGE>

unreasonable effort or expense, necessary to verify the accuracy of the
information furnished; and has availed itself of such opportunity to the extent
it considers it appropriate in order to permit it to evaluate the merits and
risks of an investment in the HMSK Shares. It is understood that all documents,
records and books pertaining to BSB's investment in the HMSK Shares have been
made available for inspection, and that the books and records of HMSK will be
available upon reasonable notice for inspection by representatives of BSB during
reasonable business hours at its principal place of business.

6. BSB hereby agrees that the following or similar legend will
appear on each certificate evidencing the HMSK Shares:

3. Representations and Warranties of BSB. BSB represents and warrants to HMSK
that the statements contained in this Section 3 are correct and complete as of
the date of this Agreement, except as set forth in a disclosure schedule
delivered by the BSB to HMSK on the date hereof and initialed by the parties
(the "BSB Disclosure Schedule"). The BSB Disclosure Schedule, to the extent
required, will be arranged in paragraphs corresponding to the lettered and
numbered paragraphs contained in this Section 3. All references to BSB shall
refer to BSB and each of its consolidated subsidiaries.

1. Organization, Qualification, and Corporate Power. BSB is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation, and is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where such
qualification is required, except where the lack of such qualification would not
have a material adverse effect on the business, financial condition, operations,
results of operations, or future prospects of BSB. BSB has full corporate power
and authority to carry on the businesses in which it is engaged and to own and
use the properties owned and used by it.

2. Capitalization. The entire authorized capital stock of BSB consists
of (i) 100,000,000 shares of BSB Common Stock, of which 28,893,844 shares are
issued and outstanding and (ii) 5,000,000 shares of Preferred Stock, $.01 par
value per share, none of which are issued or outstanding. All of the issued and
outstanding shares of BSB Common Stock, have been duly authorized, are validly
issued, fully paid, and non-assessable, and have not been issued in violation of
the preemptive or other rights of BSB's shareholders. Except as set forth in the
BSB Disclosure, (1) there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require BSB to issue, sell, or
otherwise cause to become outstanding any of its capital stock, (2) there are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to BSB, and (3) there are no

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<PAGE>

voting trusts, proxies, or other agreements or understandings with respect to
the voting of the capital stock of BSB. The BSB Shares have been duly
authorized, and, upon issuance in accordance with the terms and conditions
hereof, will be validly issued, fully paid, and non-assessable, and will not
have not been issued in violation of the preemptive or other rights of BSB's
shareholders.

3. Non-contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(1) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which BSB is subject or any provision of the
charter or bylaws of BSB or (2) conflict with, result in a breach of, constitute
a default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
BSB is a party or by which it is bound or to which any of its assets is subject
(or result in the imposition of any encumbrance or security interest upon any of
its assets), except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to give notice,
or encumbrance or security interest would not have a material adverse effect on
the business, financial condition, operations, results of operations, or future
prospects of BSB or on the ability of the parties to consummate the transactions
contemplated by this Agreement. BSB need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order for the parties to consummate the transactions
contemplated by this Agreement, except where the failure to give notice, to
file, or to obtain any authorization, consent, or approval would not have a
material adverse effect on the business, financial condition, operations,
results of operations, or future prospects of BSB or on the ability of the
parties to consummate the transactions contemplated by this Agreement.

4. Brokers' Fees. BSB has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.

5. Title to Assets. Except as otherwise set forth in the BSB
Disclosure, BSB has good and marketable title to, or a valid leasehold interest
in, the properties and assets used by them, located on their premises, or shown
on the most recent balance sheet ("Most Recent BSB Balance Sheet") included in
the BSB Disclosure (as hereinafter defined) or acquired after the date thereof,
free and clear of all encumbrances and security interests, except for properties
and assets disposed of in the ordinary course of business since the date of the
Most Recent BSB Balance Sheet.

6. Financial Statements. The financial statements of BSB included in
the BSB Disclosure consists of (collectively the "BSB Financial Statements"):
(1) audited consolidated balance sheets and statements of income, changes in
stockholders' equity, and cash flows as of and for the fiscal years ended
December 31, 1998 (the "Most Recent Fiscal Year End") and 1997; and (2)
unaudited consolidated balance sheets and statements of income, changes in
stockholders' equity, and cash flows (the "Most Recent BSB Financial
Statements") as of and for the six months ended June 30, 1999 (the "Most Recent
BSB Fiscal Month End"). The BSB Financial Statements (including the notes

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thereto) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods covered thereby
and present fairly the consolidated financial condition of BSB as of such dates
and the results of operations of BSB for such periods; provided, however, that
the Most Recent BSB Financial Statements are subject to normal year-end
adjustments (which will not be material individually or in the aggregate).

7. Events Subsequent to Most Recent Fiscal Year End. Since the Most
Recent BSB Fiscal Year End, BSB has conducted its operations only in the
ordinary course of business, and there has not been any material adverse change
in the business, financial condition, operations, results of operations, or
future prospects of BSB taken as a whole.

8. Undisclosed Liabilities. BSB has no material liability (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes), except for
(1) liabilities set forth on the face of the Most Recent BSB Balance Sheet and
(2) liabilities which have arisen after the Most Recent BSB Fiscal Month End in
the ordinary course of business.

9. Legal Compliance. BSB has complied with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any failure so to comply, except
where the failure to comply would not have a material adverse effect on the
business, financial condition, operations, results of operations, or future
prospects of BSB.

10. Tax Matters. BSB has filed all income tax returns that it was
required to file. All such income tax returns were correct and complete in all
material respects. All income taxes owed by BSB have been paid. There is no
material dispute or claim concerning any income tax liability of BSB claimed or
raised by any authority in writing. BSB has not waived any statute of
limitations in respect of income taxes or agreed to any extension of time with
respect to an income tax assessment or deficiency. BSB is not obligated to make
any material payments, or is a party to any agreement that under certain
circumstances could obligate it to make any material payments that will not be
deductible under Code Section 280G. BSB is not a party to any tax allocation or
sharing agreement. BSB is not liable for the taxes of any person under Reg.
Section 1.1502-6 (or any similar provision of state, local, or foreign law), as
a transferee or successor, by contract, or otherwise. The unpaid income taxes of
BSB did not, as of the Most Recent BSB Fiscal Month End, exceed by any material
amount the reserve for income tax liability (rather than any reserve for
deferred taxes established to reflect timing differences between book and tax
income) set forth on the face of the Most Recent BSB Balance Sheet.

11. Real Property. BSB owns no real property. With respect to any lease
for real property to which BSB is a party: (1) the lease or sublease is legal,
valid, binding, enforceable, and in full force and effect in all material

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respects; (2) no party to the lease or sublease is in material breach or
default, and no event has occurred which, with notice or lapse of time, would
constitute a material breach or default or permit termination, modification, or
acceleration thereunder; (3) no party to the lease or sublease has repudiated
any material provision thereof; (4) there are no material disputes, oral
agreements, or forbearance programs in effect as to the lease or sublease; (5)
BSB has not assigned, transferred, conveyed, mortgaged, deeded in trust, or
encumbered any interest in the leasehold or subleasehold; and (6) all facilities
leased or subleased thereunder have received all approvals of governmental
authorities (including material licenses and permits) required in connection
with the operation thereof, and have been operated and maintained in accordance
with applicable laws, rules, and regulations in all material respects.

12. Intellectual Property.

1. For purposes hereof, "Intellectual Property" shall mean (i) all
inventions (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents, patent applications, and
patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (ii)
all trademarks, service marks, trade dress, logos, trade names, and corporate
names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (iii) all
copyrightable works, all copyrights, and all applications, registrations, and
renewals in connection therewith, (iv) all mask works and all applications,
registrations, and renewals in connection therewith, (v) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (vi) all computer software (including data and related
documentation), (vii) all other proprietary rights, and (viii) all copies and
tangible embodiments thereof (in whatever form or medium).

2. BSB has not interfered with, infringed upon, misappropriated, or
violated any material Intellectual Property rights of third parties in any
material respect, and none of BSB and the directors and officers of BSB has ever
received any charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including any claim
that BSB must license or refrain from using any Intellectual Property rights of
any third party). To the knowledge of BSB and its directors and officers, no
third party has interfered with, infringed upon, misappropriated, or violated
any material Intellectual Property rights of BSB in any material respect.

3. With respect to Intellectual Property owned by BSB: (i) BSB
possess all right, title, and interest in and to the item, free and clear of any
lien, charge, encumbrance or security interest, license, or other restriction;
(ii) the item is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge; (iii) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or, to the
knowledge of BSB, is threatened which challenges the legality, validity,

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<PAGE>

enforceability, use, or ownership of the item; and (iv) BSB has never agreed to
indemnify any person for or against any interference, infringement,
misappropriation, or other conflict with respect to the item.

4. With respect to any Intellectual Property used by BSB pursuant to
license, sublicense, agreement or permission: (i) the license, sublicense,
agreement, or permission covering the item is legal, valid, binding,
enforceable, and in full force and effect in all material respects; (ii) no
party to the license, sublicense, agreement, or permission is in material breach
or default, and no event has occurred which with notice or lapse of time would
constitute a material breach or default or permit termination, modification, or
acceleration thereunder; (iii) no party to the license, sublicense, agreement,
or permission has repudiated any material provision thereof; and (iv) BSB has
not granted any sublicense or similar right with respect to the license,
sublicense, agreement, or permission.

13. Tangible Assets. The buildings, machinery, equipment, and other
tangible assets that BSB leases are free from material defects (patent and
latent), have been maintained in accordance with normal industry practice, and
are in good operating condition and repair (subject to normal wear and tear).

14. Contracts. Each material agreement, whether written or oral, to
which BSB is a party is identified and described in the BSB Disclosure. With
respect to each such agreement: (1) the agreement is legal, valid, binding,
enforceable, and in full force and effect in all material respects; (2) no party
is in material breach or default, and no event has occurred which with notice or
lapse of time would constitute a material breach or default, or permit
termination, modification, or acceleration, under the agreement; and (3) no
party has repudiated any material provision of the agreement.

15. Notes and Accounts Receivable. All notes and accounts receivable of
BSB are reflected properly on its books and records, are valid receivables
subject to no setoffs or counterclaims, are current and collectible, and will be
collected in accordance with their terms at their recorded amounts, subject only
to the reserve for bad debts set forth on the face of the Most Recent BSB
Balance Sheet.

16. Insurance. The assets and operations of BSB are covered by
insurance policies providing coverage deemed by BSB to be adequate to compensate
it for loss that may be reasonably foreseen. With respect to each policy of
insurance: (1) the policy is legal, valid, binding, enforceable, and in full
force and effect in all material respects; (2) neither BSB nor any other party
to the policy is in material breach or default (including with respect to the
payment of premiums or the giving of notices), and no event has occurred which,
with notice or the lapse of time, would constitute such a material breach or
default, or permit termination, modification, or acceleration, under the policy;
and (3) no party to the policy has repudiated any material provision thereof.

17. Litigation. Except as set forth in the BSB Disclosure, BSB (1) is
not subject to any outstanding injunction, judgment, order, decree, ruling, or

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<PAGE>

charge or (2) is not a party or, to its knowledge, threatened to be made a party
to any action, suit, proceeding, hearing, or investigation of, in, or before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator.

18. Employees. BSB is not a party to or bound by any collective
bargaining agreement, nor has it experienced any strike or material grievance,
claim of unfair labor practices, or other collective bargaining dispute. BSB has
not committed any material unfair labor practice. BSB has no knowledge of any
organizational effort presently being made or threatened by or on behalf of any
labor union with respect to employees of BSB.

19. Employee Benefits. With respect to each employee benefit plan
maintained by BSB: (1) each such plan (and each related trust, insurance
contract, or fund) complies in form and in operation in all material respects
with the applicable requirements of ERISA, the Code, and other applicable laws;
(2) all required reports and descriptions (including Form 5500 Annual Reports,
summary annual reports, PBGC-l's, and summary plan descriptions) have been
timely filed and distributed appropriately with respect to each such Employee
Benefit Plan, and the applicable requirements of COBRA have been met in all
material respects with respect to each such plan which is an Employee Welfare
Benefit Plan; (3) all contributions (including all employer contributions and
employee salary reduction contributions) which are due have been paid; (4) all
premiums or other required payments for all periods ending on or before the date
hereof have been paid.

20. Guaranties. BSB is not a guarantor or otherwise is responsible for
any liability or obligation (including indebtedness) of any other person.

21. Environment, Health, and Safety Matters. BSB has complied and is in
compliance in all material respects, with all environmental, health, and safety
requirements. BSB has obtained, has complied, and is in compliance with, in each
case in all material respects, all material permits, licenses and other
authorizations that are required pursuant to environmental, health, and safety
requirements for the occupation of its facilities and the operation of its
business. BSB has not received any written or oral notice, report or other
information regarding any actual or alleged material violation of environmental,
health, and safety requirements, or any material liabilities or potential
material liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise), including any material investigatory, remedial or corrective
obligations, relating to any of them or its facilities arising under
environmental, health, and safety requirements.

22. Year 2000. None of the computer software, computer firmware,
computer hardware (whether general or special purpose) or other similar or
related items of automated, computerized or software systems that are material
to the businesses of BSB will malfunction, cease to function, generate incorrect
data or produce incorrect results when processing, providing or receiving (1)
date-related data from, into and between the twentieth and twenty-first
centuries or (2) date-related data in connection with any valid date in the
twentieth and twenty-first centuries.

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<PAGE>

23. Certain Business Relationships With BSB. Except as otherwise set
forth in the BSB Disclosure, neither BSB nor any of its affiliates has been
involved in any material business arrangement or relationship with BSB within
the past 12 months, and no affiliates of BSB own any material asset, tangible or
intangible, which is used in the business of any BSB.

24. Disclosure. BSB hereby acknowledges receipt of the following
documents from HMSK:

1. Annual Report on Form 10-KSB for the year ended
June 30, 1998;

2. Quarterly Reports on Form 10-QSB for the quarters
ended September 30, 1998, December 31, 1998 and March
31, 1999;

3. Final Prospectus dated April 30, 1999; and

4. Annual Report on Form - 10KSB for the year ended
June 30, 1999.

The foregoing documents, as well as the representations and warranties of HMSK
set forth in this Agreement, are hereinafter referred to as the "HMSK
Disclosure".

25. No Misrepresentations. The BSB Disclosure does not contain a
misrepresentation of a material fact or omit to state a material fact necessary
in order to make any of the information set forth in the BSB Disclosure not
misleading; provided, however, that to the extent a more currently dated
document contained in the BSB Disclosure modifies disclosure in a later dated
document included in the BSB Disclosure, the disclosure in such later dated
document shall control.

4. Representations and Warranties of HMSK. HMSK represents and warrants to BSB
that the statements contained in this Section 3 are correct and complete as of
the date of this Agreement, except as set forth in a disclosure schedule
delivered by the HMSK to BSB on the date hereof and initialed by the parties
(the "HMSK Disclosure Schedule"). The HMSK Disclosure Schedule, to the extent
required, will be arranged in paragraphs corresponding to the lettered and
numbered paragraphs contained in this Article III. All references to HMSK shall
refer to HMSK and each of its consolidated subsidiaries.

1. Organization, Qualification, and Corporate Power. HMSK is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation, and is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where such
qualification is required, except where the lack of such qualification would not
have a material adverse effect on the business, financial condition, operations,
results of operations, or future prospects of HMSK. HMSK has full corporate
power and authority to carry on the businesses in which it is engaged and to own
and use the properties owned and used by it.

2. Capitalization. The entire authorized capital stock of HMSK consists
of 50,000,000 shares of HMSK Common Stock, 5,000,000 shares of Class A Preferred
Stock, $.001 par value per share, 200,000 shares of Class B Preferred Stock, par

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<PAGE>

value $10 per share and 400,000 shares of Class C Preferred Stock, par value
$.001 per share. There are currently 16,030,028 shares of HMSK Common stock
issued and outstanding and no shares of Class A Preferred Stock, Class B
Preferred Stock or Class C Preferred Stock, issued or outstanding. All of the
issued and outstanding shares of HMSK Common Stock, have been duly authorized,
are validly issued, fully paid, and non-assessable, and have not been issued in
violation of the preemptive or other rights of HMSK's shareholders. Except as
set forth in the HMSK Disclosure, (1) there are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could require HMSK to
issue, sell, or otherwise cause to become outstanding any of its capital stock,
(2) there are no outstanding or authorized stock appreciation, phantom stock,
profit participation, or similar rights with respect to HMSK, and (3) there are
no voting trusts, proxies, or other agreements or understandings with respect to
the voting of the capital stock of HMSK. The HMSK Shares have been duly
authorized, and, upon issuance in accordance with the terms and conditions
hereof, will be validly issued, fully paid, and non-assessable, and will not
have not been issued in violation of the preemptive or other rights of HMSK's
shareholders.

3. Non-contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(1) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which HMSK is subject or any provision of the
charter or bylaws of HMSK or (2) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which HMSK is a party or by which it is bound or to which any of its assets
is subject (or result in the imposition of any encumbrance or security interest
upon any of its assets), except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to give notice,
or encumbrance or security interest would not have a material adverse effect on
the business, financial condition, operations, results of operations, or future
prospects of HMSK or on the ability of the parties to consummate the
transactions contemplated by this Agreement. HMSK need not give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the parties to consummate the
transactions contemplated by this Agreement, except where the failure to give
notice, to file, or to obtain any authorization, consent, or approval would not
have a material adverse effect on the business, financial condition, operations,
results of operations, or future prospects of HMSK or on the ability of the
parties to consummate the transactions contemplated by this Agreement.

4. Brokers' Fees. HMSK has no liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.

5. Title to Assets. Except as otherwise set forth in the HMSK
Disclosure, HMSK has good and marketable title to, or a valid leasehold interest
in, the properties and assets used by them, located on their premises, or shown

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<PAGE>

on the most recent balance sheet ("Most Recent HMSK Balance Sheet") included in
the HMSK Disclosure (as hereinafter defined) or acquired after the date thereof,
free and clear of all encumbrances and security interests, except for properties
and assets disposed of in the ordinary course of business since the date of the
Most Recent HMSK Balance Sheet.

6. Financial Statements. The financial statements of HMSK included in
the HMSK Disclosure includes (collectively the "HMSK Financial Statements"): (1)
audited consolidated balance sheets and statements of income, changes in
stockholders' equity, and cash flows as of and for the fiscal years ended June
30, 1999 (the "Most Recent Fiscal Year End") and 1998. The HMSK Financial
Statements (including the notes thereto) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods covered thereby and present fairly the consolidated
financial condition of HMSK as of such dates and the results of operations of
HMSK for such periods.

7. Events Subsequent to Most Recent Fiscal Year End. Since the Most
Recent Fiscal Year End, HMSK has conducted its operations only in the ordinary
course of business, and there has not been any material adverse change in the
business, financial condition, operations, results of operations, or future
prospects of HMSK taken as a whole.

8. Undisclosed Liabilities. HMSK has no material liability (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes), except for
(1) liabilities set forth on the face of the Most Recent HMSK Balance Sheet and
(2) liabilities which have arisen after the Most Recent HMSK Fiscal Month End in
the ordinary course of business.

9. Legal Compliance. HMSK has complied with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), and no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, demand, or notice has been
filed or commenced against any of them alleging any failure so to comply, except
where the failure to comply would not have a material adverse effect on the
business, financial condition, operations, results of operations, or future
prospects of HMSK.

10. Tax Matters. HMSK has filed all income tax returns that it was
required to file. All such income tax returns were correct and complete in all
material respects. All income taxes owed by HMSK have been paid. There is no
material dispute or claim concerning any income tax liability of HMSK claimed or
raised by any authority in writing. HMSK has not waived any statute of
limitations in respect of income taxes or agreed to any extension of time with
respect to an income tax assessment or deficiency. HMSK is not obligated to make
any material payments, or is a party to any agreement that under certain
circumstances could obligate it to make any material payments that will not be
deductible under Code Section 280G. HMSK is not a party to any tax allocation or
sharing agreement. HMSK is not liable for the taxes of any person under Reg.
Section 1.1502-6 (or any similar provision of state, local, or foreign law), as

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<PAGE>

a transferee or successor, by contract, or otherwise. The unpaid income taxes of
HMSK did not, as of the Most Recent HMSK Fiscal Month End, exceed by any
material amount the reserve for income tax liability (rather than any reserve
for deferred taxes established to reflect timing differences between book and
tax income) set forth on the face of the Most Recent Balance Sheet.

11. Contracts. Each material agreement, whether written or oral, to
which HMSK is a party is identified and described in the HMSK Disclosure. With
respect to each such agreement: (1) the agreement is legal, valid, binding,
enforceable, and in full force and effect in all material respects; (2) no party
is in material breach or default, and no event has occurred which with notice or
lapse of time would constitute a material breach or default, or permit
termination, modification, or acceleration, under the agreement; and (3) no
party has repudiated any material provision of the agreement.

12. Litigation. Except as set forth in the HMSK Disclosure, HMSK (1) is
not subject to any outstanding injunction, judgment, order, decree, ruling, or
charge or (2) is not a party or, to its knowledge, threatened to be made a party
to any action, suit, proceeding, hearing, or investigation of, in, or before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator.

13. Year 2000. None of the computer software, computer firmware,
computer hardware (whether general or special purpose) or other similar or
related items of automated, computerized or software systems that are material
to the businesses of HMSK will malfunction, cease to function, generate
incorrect data or produce incorrect results when processing, providing or
receiving (1) date-related data from, into and between the twentieth and
twenty-first centuries or (2) date-related data in connection with any valid
date in the twentieth and twenty-first centuries.

14. Disclosure. HMSK hereby acknowledges receipt of the following
documents from BSB:

1. Private Placement Memorandum dated July 15, 1999;

2. Supplement to Private Placement Memorandum dated August 17, 1999;

3. Unaudited Financial Statements of BSB as of June 30, 1999; and

4. Articles of Incorporation, as amended, and By-Laws, as amended,
of BSB.

The foregoing documents, as well as the representations and warranties of BSB
set forth in this Agreement, are hereinafter referred to as the "BSB
Disclosure".

15. No Misrepresentations. The HMSK Disclosure does not contain a
misrepresentation of a material fact or omit to state a material fact necessary
in order to make any of the information set forth in the HMSK Disclosure not
misleading; provided, however, that to the extent a more currently dated

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<PAGE>

document contained in the HMSK Disclosure modifies disclosure in a later dated
document included in the HMSK Disclosure, the disclosure in such later dated
document shall control.

5. Covenants.

1. Mutual Covenants. Promptly following the date hereof, the Chief
Executive Officer of BSB, or other designee of BSB reasonably acceptable to
HMSK, shall be appointed to the Board of Directors of HMSK. Thereafter, and for
a period of 18 months from the Effective Date of this Agreement, at each meeting
of shareholders of HMSK at which directors are elected, HMSK shall include the
designee of BSB on management's slate of nominees for election to HMSK's Board
of Directors. Promptly following the date hereof, the Chief Technology Officer
of HMSK, or other designee of HMSK reasonably acceptable to BSB shall be
appointed to the Board of Directors of BSB. Thereafter, and for a period of 18
months from the Effective Date of this Agreement, at each meeting of
shareholders of BSB at which directors are elected, BSB shall include the
designee of HMSK on management's slate of nominees for election to BSB's Board
of Directors.

2. Covenants of BSB.

1. In addition to the rights granted to HMSK pursuant to this
Agreement, HMSK shall be entitled to all of the voting, registration and other
rights afforded to investors in BSB's Private Offering.

2. Following registration of the HMSK Shares being issued to BSB
pursuant to this Agreement, BSB hereby covenants and agrees that it will limit
the number of HMSK Shares it sells during any trading day to no more than 25% of
the trading volume of shares of HMSK Common Stock during the preceding trading
day. The daily number of shares that may be sold by BSB includes all other
shares of HMSK Common Stock that are publicly sold by BSB on such day.

3. BSB shall furnish such information as may reasonably be requested
by HMSK in order to enable it to register the HMSK Shares as contemplated below.
BSB shall comply with all applicable securities laws in connection with any
resale of the HMSK Shares by it.

4. BSB understands that HMSK Common Stock is a class of equity
securities registered under Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). BSB hereby covenants and agrees that it will
file with the SEC and other applicable regulatory authorities, all reports and
other information required to be filed by it in connection with its acquisition
and/or disposition of the HMSK Shares.

5. BSB hereby agrees to fulfill its obligations to register the BSB
Shares in accordance with the Registration Rights Agreement signed on September
23, 1999.

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<PAGE>

6. BSB hereby agrees that it will not vote the HMSK Shares, or any
other shares of HMSK Common Stock the vote of which is controlled by BSB, in
favor of any business combination involving HMSK that has not been endorsed by
the Board of Directors of HMSK.

3. Covenants of HMSK.

1. On or prior to January 31, 2000, HMSK agrees to file a
registration statement on Form S-3 under the Act, or, in the event Form S-3 is
not available to HMSK, then on another applicable form, for the purpose of
registering the HMSK Shares under the Act, for resale by BSB. HMSK agrees to use
its reasonable best efforts to cause such registration statement to become
effective as soon thereafter as is practicable. The costs of preparing and
filing such registration statement shall be borne by HMSK. Resale of the HMSK
Shares shall be subject to BSB's covenant set forth in Section V(B)(2), above.

2. HMSK agrees to be bound by restrictions on resale imposed on all
other shareholders of BSB in connection with any underwritten offering by BSB
covered by the registration statement which includes the BSB Shares; provided,
however, that BSB shall maintain the effectiveness of such registration
statement for a period of at least nine months following the termination of any
such restriction on resale. 1.

3. HMSK hereby agrees that it will not vote the BSB Shares, or any
other shares of BSB Common Stock the vote of which is controlled by HMSK, in
favor of any business combination involving BSB that has not been endorsed by
the Board of Directors of BSB.

6. Indemnification.

1. Indemnification by BSB. Subject to the provisions of subsection 3
hereof, BSB hereby indemnifies and holds harmless HMSK and its officers,
directors, employees, representatives, stockholders, controlling persons, and
affiliates (collectively, the "Indemnified Persons") for, and will pay to the
Indemnified Persons the amount of, any loss, liability, claim, damage, expense
(including costs of investigation and defense and reasonable attorneys' fees) or
diminution of value, whether or not involving a third-party claim (collectively,
"Damages"), arising, directly or indirectly, from or in connection with: (1) any
breach of any representation or warranty made by BSB in this Agreement or any
other agreement, certificate or document delivered by BSB pursuant to this
Agreement; (2) any breach by BSB of any of its covenants or obligations in this
Agreement or in any other agreement, document or certificate delivered by BSB
pursuant to this Agreement; and/or (3) any claim by any person for brokerage or
finder's fees or commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such person with BSB (or any
person acting on its behalf) in connection with any of the transactions
contemplated hereby.

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2. Indemnification by HMSK. HMSK hereby indemnifies and holds harmless
the BSB and its officers, directors, employees, representatives, stockholders,
controlling persons, and affiliates (collectively, the "Indemnified Persons")
for, and will pay to the Indemnified Persons the amount of, any Damages arising,
directly or indirectly, from or in connection with (1) any breach of any
representation or warranty made by HMSK in this Agreement or in any agreement,
certificate or document delivered by HMSK pursuant to this Agreement, (2) any
breach by HMSK of any covenant or obligation of HMSK in this Agreement or in any
other agreement, document or certificate contemplated by this Agreement, or (3)
any claim by any person for brokerage or finder's fees or commissions or similar
payments based upon any agreement or understanding alleged to have been made by
such person with HMSK (or any person acting on its behalf) in connection with
any of the transactions contemplated hereby.

3. Time Limitations. No party to this Agreement shall have any
liability (for indemnification or otherwise) with respect to any representation
or warranty, or covenant or obligation to be performed and complied with prior
to the date hereof, unless notice of any such liability is provided on or before
twelve (12) months from the date hereof.

4. Basket. Notwithstanding any conflicting or inconsistent provisions
hereof, BSB shall not be liable in damages, indemnity or otherwise to HMSK in
respect of the inaccuracy or breach of any representations, warranties,
covenants or agreements herein, until such time as the Damages to HMSK,
singularly or in the aggregate, exceed the sum of $15,000, at which time BSB
shall be liable for the full amount of HMSK's Damages. Notwithstanding any
conflicting or inconsistent provisions hereof, HMSK shall not be liable in
damages, indemnity or otherwise to the BSB in respect to the inaccuracy or
breach of any representations, warranties, covenants or agreements herein, until
such time as the Damages to BSB, singularly or in the aggregate, exceed the sum
of $15,000, at which time HMSK shall be liable for the full amount of BSB's
Damages.

7. Miscellaneous.

1. Survival of Representations and Warranties. All of the
representations and warranties of the Parties contained in this Agreement shall
survive the Closing for a period of one year.

2. No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.

3. Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they related in any way to the subject
matter hereof.

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4. Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. No Party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the other Party.

5. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

6. Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

If to BSB: BuySellBid.com, Inc.
921 14th Avenue
Longview, WA 98632
Facsimile No.: (360) 425-3419
Attention: Jay Shepard and Gene Hill

If to HMSK: HomeSeekers.com, Incorporated
6490 S. McCarran Blvd., Suite D-28
Reno, Nevada 89509
Facsimile No.: (775) 827-8182
Attention: Greg Costley and Jim Dykstra

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the laws of any jurisdiction other than the State of Nevada. The parties
further: (i) agree that any legal suit, action or proceeding arising out of or
relating to this Agreement shall be instituted exclusively in any court of
competent jurisdiction within the County of Washoe, State of Nevada or in the
United States District Court for the District of Nevada, Northern Division, (ii)
waive any objection that they may have now or hereafter to the venue of any such
suit, action or proceeding, and (iii) irrevocably consent to the in personam
jurisdiction of any court of competent jurisdiction within the County of Washoe,
State of Nevada, and the United States District Court for the District of
Nevada, Northern District in any such suit, action or proceeding. The parties
each further agree to accept and acknowledge service of any and all process
which may be served in any such suit, action or proceeding in a court of
competent jurisdiction within the County of Washoe, State of Nevada or in the
United States District Court for the District of Nevada, Northern Division, and
that service of process upon the parties mailed by certified mail to their
respective addresses shall be deemed in every respect effective service of
process upon the parties, in any action or proceeding.

9. Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Buyer and the Seller. No waiver by any Party of any default, misrepresentation,
or breach of warranty or covenant hereunder, whether intentional or not, shall
be deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.

11. Expenses. Each of the Buyer and the Seller will bear its own costs
and expenses (including legal fees and expenses) incurred in connection with
this Agreement and the transactions contemplated hereby.

13. Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.

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

BuySellBid.com, Inc.

By:_______________________________
Name: Jay Shepard
Its: Chief Executive Officer

HomeSeekers.com, Incorporated

By:_______________________________
Name: Greg Costley
Its: Chief Executive Officer